Mongolia Economic Forum highlights scenarios for Mongolia through 2040
Mongolia’s biggest event on economic issues, the Mongolia Economic Forum, launched on Monday for the fifth time at the State Palace.
The two-day event was opened by Prime Minister N.Altankhuyag, who remarked, “Last year, the forum discussed the creation of unique Mongolian brands, but this year, it will emphasize production in Mongolia with the slogan, ‘Let’s create in Mongolia’.”
During his speech, he outlined projects planned by the government to increase production and diversify the economy. He noted that the government has planned to spend one trillion MNT on industrialization programs, to produce building materials, leather and woven clothes, and on the food industry and mining.
“Today, the nation is rarely manufacturing final products. Mongolia imports 88 percent of its commodities, and over 90 percent of exports are raw minerals. Unless we change this, Mongolia will continue to face economic hardship and resource tension will rise,” he said.
“The Reform Government has declared this year as the year of production, and the government will work to implement consistent policies to eliminate bureaucracy and burdens that get in the way of doing business,” N.Altankhuyag added.
While last year’s forum focused heavily on the mining sector, especially coal, along with the agricultural sector to create brands to represent Mongolia, this year’s conference focused on industrialization and production to replace imported products, as well as other aspects of the economy, such as employment, education and training, and green development.
The Mongolia Economic Forum is the largest platform for the government, private businesses and experts to discuss and reach solutions to major economic issues, but some participants felt that due to the time constraints of the events, their proposals and criticisms were not heard.
“Every year the issue of time constraints is talked about and participants are given limited time to voice their thoughts, which hinders the productivity of the forum. We waste time talking about how little time we have instead of focusing on the statements made by the attendees,” said one participant at the event.
There were some criticisms of the state and how little progress had been made since last year. A number of business operators in Mongolia voiced their concern that the panelists’ explanations for economic hardships such as depreciating currency value were not true.
“Business operators don’t believe the state’s explanation for depreciating exchange rates. We suspect behind-the-scene dealings and corruption. Small and medium enterprises will grow this nation, but while some have received subsidies and state support for decades, other sectors don’t receive anything from the state,” said an agricultural business operator.
Scenarios for Mongolia
At the World Economic Forum, scenarios for Mongolia were outlined and touched on at the Mongolia Economic Forum.
In the scenarios, it was highlighted that China’s policies and development will have a major impact on Mongolia’s economic growth, as it is Mongolia’s main trade partner.
By 2040, it is expected that China will lead the way regionally in introducing green policies, pioneering new technologies, and cleaner production processes. To introduce greener policies, China will have to accept more modest economic growth as a trade-off for more sustainable development that includes social stability and improved environmental quality.
As this transition unfolds, Mongolia will experience a hard time selling its main minerals, as environmental and social costs will rise and demand will fall.
“China’s electricity prices are beginning to undergo very slow reform. However, it seems that the government is feeling its way in trying to reform what is a sensitive issue. In order to achieve a more sustainable development path, however, this is a crucial area in need of reform. Coal needs to pay its way, and renewables should receive increased support to help them compete in the energy market,” said Huw Slater, researcher at Australian National University, with a focus on Chinese climate change policy.
“Recently, coal prices have been falling due to oversupply. China’s electricity prices are centrally mandated by Beijing, and instead of allowing the prices that are already-subsidized, coal-fired power generators are allowed to sell their electricity to fall proportionately. They have allowed coal power to become relatively more expensive in comparison to the renewable alternatives.”
Slater also emphasized that although the leaders of China are bent on sustainable development, the vested interests in state-owned energy companies continue to have a huge influence behind the scenes.
“The central government has begun to try and de-emphasize the importance of local GDP growth as the traditional marker of local government success, and instead identify other objectives, including environmental ones. However many of these new priorities are not easily quantified or realizable in the short period of time which local leaders hold their posts before moving on. This means that GDP remains a high priority in most areas, with serious consequences for air, water and soil pollution.”
He added, “The current central leadership, and Premier Li Keqiang in particular, have placed a high priority on sustainable development. The test of their success, however, will be how effective they are at breaking down the influence of vested interests which benefit from the existing carbon-intensive and polluting development path.”
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