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Business / Mongolia News / March 6, 2015

In Berlin: Mongolia promises a bright future

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By B.Enkhtsetseg in Berlin.

Last year, five German-Mongolian companies were established in tourism and food sectors. Since 1990, entrepreneurs have established 261 German companies in Mongolia.  German investment accounts for 0.8 percent of total foreign investment coming into Mongolia, totaling USD 61 million. Organisers of this week’s Germany-Mongolia Business Forum hoped the event increases cooperation with German enterprises and attracts investments from them for Mongolia.

Thirty Mongolian companies and 45 German companies took part in yesterday’s forum. One hundred delegates headed by President Ts.Elbegdorj, Deputy Minister of Construction and Urban Development G.Baigalmaa, Governing Mayor of Berlin Michael Muller and CEO of Deutsche Bank Juergen Fitschen attended the forum.

President Elbegdorj noted Germany’s and Mongolia’s long-standing friendly relationship, saying the right business environment is already in place for the two sides to cooperate. Long distances and infrastructure shortages are the biggest challenges to further successful cooperation. The President remarked that the two sides are on the same page regarding the importance of air transport and transit in importing and exporting goods. Mongolia’s situation is even improved, now that the country has an agreement with China to ship goods on railway linkages through China to the rest of the world. The solutions will provide a significant boost to our economic relations with Germany.

The business forum and ITB tourism exhibition are taking place at the same time. Mongolia is participating in the ITB exhibition as an official partner for the first time. The mayor of Berlin said that the Government of Germany, especially the city council of Berlin greatly encouraged Mongolia as the official partner of the exhibition. He also emphasized that German enterprises are very interested in cooperating with Mongolian enterprises.

German people know well that their main competing attributes on the global market are their high standards and quality products. Mongolia has a chance to learn and inherit their advanced technological knowledge from them. Head of promotion and consulting services of Invest Mongolia Agency D.Irmuun said: “German entrepreneurs are mostly interested in health insurance and banking sectors. Recently they started to get interested in the infrastructure sector too.” In general, German investors’ main interest is in mining, bank and finance, infrastructure and tourism. D.Irmuun added: “Germans are trying to make their business more tactful with their Chinese companions. They’re using the same principle with us too.”

During the forum, a representative of German railway company Deutsche Bahn said: “This forum is a good opportunity to find out the general business environment, changes in regulations, and legislation of Mongolia. The sudden changes of regulations and legislation by the Mongolian government is quite difficult for us, because must change our operations according to those. It would be relatively easier to conduct business if Mongolia could resolve this issue.”

The government amended the investment law in 2013. Invest Mongolia Agency reported that laws and legislation issues are stabilizing in Mongolia, and began promoting their work to international investors. However, the new law still has some issues that contradict with other laws. But generally speaking, participants in the forum emphasized that the new law has a satisfactory step forward. The new investment law has intensified the process to diversify the economy. Now the focus is on getting results.

Mongolia’s biggest ongoing projects or unfunded projects in the development stage were presented during the Mongolian-German Forum. Deputy Minister of Construction and Urban Development said that the infrastructure sector has a big chance to get investments. Head of Strategic Planning of the Ministry of Industry D.Battogtokh said that there are certain projects which might find funding and emphasized projects in coking and clean energy during the forum. The Maidar eco-city project has attracted the most attention, with the project design already on hand; it’s planned to be given to the commission in 2040. Planning team leader Stefan Schmitz led the presentation. With a total capacity of 300,000 people, the ‘city of the future’ will be built around a towering statue of the Buddha Maitreya; the statue of Maitreya will be bigger than New York’s Statue of Liberty. There is an expectation that Maidar city will take pressure off over-populated and under-serviced Ulaanbaatar.

Germany is not considered a big player in the mining sector—likely why they’re trying to help diversify the economy of Mongolia. In this regard, most of the proposed projects were related to infrastructure. The Mongolian government is interested in cooperating with the private sector. During the Forum, entrepreneurs were interested to know about the competitiveness of German products on Mongolian market in comparison to other countries goods. Our side explained that German products promise high quality, so and so have the potential for a high competitiveness capacity.

During the Mongolian-German Forum, as Mongolian guests presented the ongoing and planned projects to German entrepreneurs, they additionally explained that their country’s legal issues are stabilizing. Although the economic situation in Mongolia is difficult today, they said, Mongolia has the full potential to overcome it. Mongolia promised a bright future not only to German investors but to all investors around the world.

SOURCE: Mongolian Economy

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