GOVERNMENT PROMISES STRUCTURED DIALOGUE WITH INVESTORS TO PREVENT UNEXPECTED "SURPRISE

By A. Khaliun

The Mongolian Economic Forum 2025 was held on July 8-9, just ahead of the National Naadam Festival. As one of the country's premier platforms, the forum brings together the Government of Mongolia, business leaders, and international investors to present promising projects, share development programs, and address key economic issues.

The 16th edition, held under the slogan "Together for Tomorrow," drew around 3,000 participants. Attendees included Prime Minister G. Zandanshatar, Chief Cabinet Secretary and Minister S. Byambatsogt, sector ministers, and representatives from government, the private sector, NGOs, and international organizations.

Among the 500 international delegates were decision-makers, investors, sponsors, and ambassadors representing major organizations such as CNN, J.P. Morgan, Meta, Tik Tok, The Asia Group, the Swiss luxury brand Breitling, the World Bank, the European Bank for Reconstruction and Development, the Asian Development Bank, the UN Convention to Combat Desertification (UNCCD), the UK Department for Transport, the UK Export Credit Agency, and the Korea Migration Research and Training Center. They were briefed on the new government's development strategies and flagship projects and programs. 

G. ZANDANSHATAR: LAYING THE FOUNDATION FOR "MONGOLIAN MODERNIZATION"

The Mongolian Economic Forum 2025 was held less than a month after the formation of Prime Minister G. Zandanshatar's government. In his opening remarks, the newly appointed Prime Minister declared, "Recently, I have sensed the awakening of Mongolia's powerful spirit," referencing the historical concept of Pax Mongolica the Great Mongolian Peace and pledging to create a similarly peaceful, welcoming environment for both domestic and international investors.

Zandanshatar outlined the government's core policy direction under a bold reform agenda titled "Mongolian Modernization," with human development as its top priority. Other key pillars include government reform, mining sector advancement, structural economic transformation, digital development, and a shift to green energy. He emphasized the government's intention to attract both domestic and foreign investment through sound, investor- friendly policies and institutional reforms.

"We aim to build a system that favors both local and international investors we 'invite and then bite,' or 'welcome and then not one where strangle," he said.

We will implement these goals within the framework of what we call the 'ABCD Predictable Framework.' Specifically: 'A' stands for Accountability-driven responsible government; 'B' is Business-focused a transparent and ensuring a stable business environment: 'C' is Competitiveness-enhanced - fostering innovation and competitiveness; and 'D' is Digital-based-developing a digitally driven government and services. Ultimately, all of this will be grounded in being 'Predictable' a system that does not present investors with unexpected 'surprises' but operates in a foreseeable, stable manner. This is the foundation of the bold reform we call 'Mongolian Modernization.

Zandanshatar also highlighted Mongolia's vast renewable energy potential. Scientists estimate the country could generate up to 2,600 gigawatts of electricity through solar and wind power. Both domestic and international investors have already begun entering the sector. A major project to manufacture solar battery storage systems and potentially export solar energy is set to launch in August. Two additional power plants are ready for commissioning, and construction of the Eg River Hydropower Plant is scheduled to begin soon.

These efforts fall under the government's "Energetic Mongolia" initiative (Erchist Mongolia), which aims to transform Mongolia into an energy-exporting country with a restructured national economy.

In another key announcement, the Prime Minister launched a project to redevelop the historic city of Kharkhorin and invited investors to take part freely and transparently. He reiterated the government's commitment to creating a responsible investment environment, enhancing competitiveness, and offering favorable tax conditions. "We will not deliver unexpected surprises to businesses and investors," he said. "Instead, we will build a system based on open dialogue and negotiation."

He also introduced the "5D Strategy," a 10- year development vision that aims to double the size of the economy and green spaces, expand renewable energy output, strengthen economic independence, and accelerate digital transformation.

"It's not enough for us to claim that Mongolia is investor-friendly only when investors themselves say so can we truly consider our business environment to be healthy," he added.

Zandanshatar then gave a brief update on the progress of 14 mega-projects launched under the previous coalition government led by former Prime Minister L. Oyun-Erdene. By doing so, he aimed to reassure investors that the country's policies remain stable and consistent, regardless of changes in leadership.

The Prime Minister concluded by reaffirming Mongolia's commitment to diversifying its economy. While mining and rare earth elements remain the leading sectors, the government will now also prioritize agriculture and renewable energy. In response to questions from participants, he emphasized that Mongolia ranked among the top ten countries in the world for natural resource wealth is committed to supporting mutually beneficial investment partnerships.

Finance Minister B. Javkhlan participated as a panelist in the forum's breakout session titled "Navigating Global Uncertainties and Macroeconomic Factors," which addressed key influences on the macroeconomy. He stated, "We will implement three reform measures to ensure macroeconomic stability and boost economic competitiveness. Additionally, we will pursue policies aimed at diversifying the economy and exports, enhancing resilience to risks. To achieve this, we will improve financial and budgetary management, uphold fiscal discipline, transparency, and accountability, and promote economic growth by supporting investment and the private sector through tax reforms." 

On the second day of the Mongolian Economic Forum 2025 international conference (July 9, 2025), a session titled "Strategic Resources and Global Supply Chain" was held. Panelists included Minister of Industry and Mineral Resources G. Damdinnyam, Deputy Speaker of Parliament B. Purevdorj, CEO of Erdenes Mongol Group S. Narantsogt, Chairman of the Mongolian National Mining Association G. Battsengel, and Olivier Thoumyre, representative of the French company Orano Mining in Mongolia. They discussed government policies on the use of strategic reserves, the regulatory and legal environment, and international best practices.

G. DAMDINNYAM: TAILORED MINING POLICIES NEEDED

Minister of Industry and Mineral Resources G. Damdinnyam emphasized that it is misconception to think Mongolia is unique solely because of its natural resource wealth, noting that over 80 countries share similar characteristics. He stressed the need for distinctive policies that set Mongolia apart.

"First, we must have understanding of where and what resources comprehensive exist," he said. "The major mines currently driving Mongolia's economy were established based on exploration and research conducted before 1990. Since exploration typically occurs about ten years prior to extraction, it opens opportunities to develop new mines and bolster the economy."

However, he cautioned that Mongolia's restrictions on exploration have significantly increased socio-economic risks. Therefore, alongside ensuring transparency in the sector, distinct policies tailored to the characteristics of each mining product are essential.

N. UCHRAL: MNCCI TO GRANT SIMPLE PERMITS

Minister of Economy and Development N. Uchral participated in the “Business-Friendly Mongolia" session, highlighting that 93% of Mongolia's economy depends on mining, with coal accounting for 50% of that share. He noted that a 30-40% drop in coal prices forces budget revisions, cuts, and new fiscal planning.

Uchral emphasized that merely cutting costs is insufficient; policies must support business freedom by allowing the free market to function alongside cost-saving measures to navigate the challenging period and safeguard private sector jobs.

He identified bureaucracy in frontline for businesses. As Minister of Economy and Development, he pledged to reduce government regulation, promote deregulation, and expand space for independent business operations.

To achieve this, he plans to collaborate with the Mongolian National Chamber of Commerce and Industry (MNCCI) to transfer the authority for granting simple permits-defined under the Law on Permits to the MNCCI and its affiliated professional associations. This regulatory reform proposal, aimed at cutting bureaucracy, is scheduled to be submitted to Parliament during the upcoming autumn session.

An interesting guest panelist in this discussion was Georges Kern, CEO of the Swiss luxury watchmaker Breitling, which recently opened its first store in Ulaanbaatar.

Kern expressed his pleasure at visiting Mongolia for the first time and attending the Economic Forum. He observed that Mongolia has a population of 3.5 million compared to Switzerland's 8 million, but in terms of land area, Mongolia is 31 times larger. He posed the question: what makes Switzerland successful? Unlike Mongolia, Switzerland has almost no natural resources, yet it thrives economically.

Kern highlighted Switzerland's consensus- based government, which has maintained stability for 25 years. The government submits proposals to Parliament, and policies are implemented through democratic processes, including holding 3 to 5 referendums annually on fundamental development issues. Citizens are actively engaged in governance rather than isolated from it, allowing them to contribute directly to national development. This mechanism operates consistently and effectively.

On the business side, Kern noted that producing mass-market goods is not feasible in Switzerland. Despite relatively low corporate taxes (around 15%), wages and incentives are high. As a result, Swiss businesses focus on producing high value- added products.

B. Zorigt, Executive Director of the Center for Economic Development, stated, "The state continues to dominate our country's economy, just as it did 30 years ago. According to 2023 statistics from the International Labour Organization (ILO), over 770,000 people work in government institutions or state-related organizations, while more than 550,000 are employed in the private sector. This clearly shows the state's predominant role in the economy. To change this, we must prioritize privatizing state-owned enterprises and improving governance. It is essential that the state does not burden entrepreneurs but instead grants them the freedom to operate freely in the market."

During this year's Economic Forum, a joint session on "Mining and Strategic Resources" was held alongside 12 sectoral sessions and roundtable discussions covering topics such as urban planning, sustainability, responsible extraction, and creating a favorable business environment.

Over the two days, government officials- from the head of the executive branch to sector ministers-emphasized their commitment to fostering an investor-friendly environment where businesses can operate with minimal pressure and greater freedom. They actively encouraged investment in line with this vision.