The Minister of Foreign Affairs of Mongolia, Luvsanvandan Bold, speaks to Untied World about the rapid development of the economy, branding Mongolia and it products abroad, and Mongolia’s foreign relations with the US and China
In the past few years Mongolia has been living its golden period due to its booming mining sector and the credibility of a consolidate democracy. As Minister of Foreign Affairs of this rising economy, can you please tell us about Mongolia’s comparative advantages and what is the government action plan to address the major challenges that Mongolia currently faces?
Our advantage, as you have already noticed, is that we are a consolidated and vibrant democracy. In the past we were in disadvantage compared with any free market economy, as we didn’t have the economic and social freedom for our personal and professional development. Today Mongolia is a democracy with guarantees of an open society, the rule of law and direct representation of the citizens by a responsible government with the impetrative of serving its people and bringing Mongolia to the international arena, for the benefits both of public and private institutions. I do believe that democracy in this continent is a very good advantage. We live in an open society now where any foreigner can find the needed certitude to be engaged.
As any other country we have our shortcomings but generally we approach a new stage year-by-year, learning from the mistakes of the past while building the foundations of a promising future in accordance with the international commitments and global economy overture.
Ten years ago Mongolia was small and our goal was not to attract anyone's attention. But in ten years our economy grew tenfold and became an attractive middle-income country. Now our problem is to find a common language and common interests so we have the opportunity to create the best future for the Mongolian people.
Naturally we need expertise and consensuses to decide on any far reaching decisions. This is a continuous process of learning, in a society of three million members it is a welcome challenge, but as our economy needs foreign investors we need to drive excellence in every decision that we take, portrait credibility and learn from the view of both foreign and national private companies that are contributing to the welfare of Mongolia and to the sustainable economic growth of our nation.
You have stated in different conferences and international visits the importance of adding value to raw materials, facilitating the business environment for SMEs, boosting the national manufactures and showing to the entire world the attractiveness of Mongolia in terms of tourism. What are the measures that your are taking to achieve this? How is the government going to promote sectors such tourism or brand Mongolian cashmere?
From the moment we got into power we made changes in the government and we decided to create two new ministries. The first one was the Ministry of Economic Development to direct rightly the economic path of development that will take advantage of the untapped potential of the country. There wasn’t any proper pacification before. Without the right short, medium and long-term policies, without a clear view Mongolia will walk blind, that’s why we need economic development in a way that everyone can see the guidance. Now, this is the direction where Mongolia is headed, so people can decide on investments and cooperation with Mongolia.
The second Ministry we created was for boosting the green development of Mongolia. We see the importance of green development on the same line as the ministry of finance and the ministry of foreign affairs. This means that any choices made in Mongolia should be made with green eyes. We should really preserve the beauty of Mongolia, its nature, the balance of the environment, the nomadic culture and sustainable development and I believe that has been a very important decision. Apart from that, there are a few more decisions and government organizations that are carrying out the development of tourism, sports, the cashmere and other industries while supporting SMEs so everyone can realize their ideas.
You are the main voice of Mongolia in the most important international forums, investment summits and organizations. Do you perceive that the general public knows what Mongolia is about?
Ten years ago and the period before that Mongolia was perceived as a country with wild horses and nomadic people. There was no industry; there was no economic future. Our achievements have been noticed and people are interested now. Mongolia is now seen as an economic power for the future, as a very important connection point in North East Asia economic prosperity. Now everybody recognizes this. Everyone is talking about real economic contact and that is very good news for us. In the past, whenever we went to Japan we used to talk about sumo wrestling 60% of the time. Nowadays sumo doesn’t even get mentioned anymore and Mongolians have been dominating sumo for more than 15 years now.
There are two things that investors always look before setting any kind of business in a country: infrastructures development and transparency. The United States has been assisting Mongolia through Millennium Challenges Corporation to improve the infrastructure in the critical north-south economic corridor. What is your strategy to increase the foreign trade and relations with United States?
That is a good point. Up until now the USA has been the greatest supporter of Mongolia and our new system. With the many problems we have, and you mentioned all of them. This is why the Mongolian people will always be grateful. But now it is time to start working as partners. We can really do a lot of lucrative work and projects here. Now the US has to look at Mongolia as a potential country for job creation. We can invest and create investment. We have the ability to influence the economic environment of the entire region of Asia. We can influence the world prices on energy and commodities, which is a life standard for many people around the world. So I think we can have a very good cooperation and of course the USA is the champion in many areas such as technology, agriculture, infrastructure, modern IT, so we could cooperate very well in the future.
In 2013 you signed in New York the agreement on transparency in matters related to International Trade and Investment. What does it mean for Mongolia this agreement on investment transparency?
The agreement with the US is still in its initial stage. Naturally it will bring many changes and allows US companies to be opened in Mongolia. It is however not only an issue between Mongolia and the USA. Transporting is about English. English is a business language. This means that it benefits the US but not only the US, also international companies and businesses. Of course the US is a leader and will naturally be at the forefront of starting businesses and doing other activities here. We are really welcoming.
The United States has been the major ally of Mongolia in terms of developing its defense forces. Apart from that, United States and its pivotal strategy towards Asia bring new opportunities for both countries in terms of security, economic relations or strong presence in organizations such ASEAN. How can Mongolia take full advantage of Obama’s new strategy towards Asia, especially taking into account the economic slowdown of its first partner Europe?
Mr. Bold: We are very supportive of this vision. This doesn’t mean that the USA is diminishing all other ideas. It is important because Asia has finally matured itself enough to be a very important part of the global trade. We understand the feedback we as Mongolians. Now Mongolia has become what it is today. And now we can and are playing a certain role and we will continue to support and encourage. We will prove ourselves to be real good partners.
What is your strategy to enhance foreign relations?
Now in our case, we know that diplomatic relations is important. Diplomatic ties are key to increasing the countries role and position internationally and that has always been an important guideline for us. But the thing which is more important than that is the economic impact with foreign relations. We should support companies, our citizens, our partners, those who are interested in Mongolia and those who want to visit Mongolia. Therefore every day, we take new steps to support them, to inform them and to enable easier visa processes. In the past we only had no visa agreements with the US and now we have those agreements with Canada and Germany which continued with Japan and we encouraged more movement more interactions and all these actions should really improve the lives of businesses and the economic situations here as well as on the opposite side. I think these activities are also welcomed in our partner countries.
Surrounded by two of the most powerful nations in the world Mongolia has its own third neighbor policy. On one hand Mongolia’s biggest consumer market is at the other side of the border (China) but on the other hand the entire country is tremendously expose to Chinese demands and interests. Can you elaborate in Mongolia’s third neighbor policy and how are you decreasing dependency on China?
Sure, the two neighbors we have are god given gifts. One is the biggest country in the world and the other is the most populated one. At the same time any other friend is like a neighbor. In Mongolian terms being like a neighbor is like having a close friend or partner. You might say aren’t two neighbors enough? But we can always have more neighbors. Anyone we can trust and who has good intentions and a clean heart and wants to cooperate with us will always be welcomed by us as friends. They are not our neighbors because of their priority to develop because there will be a common policy economy cooperation. So this does not mean that because we already have 2 neighbors we will tell the other people they can’t be. That way everybody loses.
We recently heard that you want to host the World Economic Forum of Asia in 2016. Do you think that Mongolia is ready to host these kind of forums in Ulaanbaatar?
Sure I don’t think that it is a problem, because nowadays there are many new projects for modernization of hotels and international hotels. Our government just decided to establish a new international center near the new airport as well and rural cities itself are changing rapidly and I think that in the next two years Mongolia will be dramatically different. So I think it is also good for the WEF to see how a landlocked country and its population can change, can emerge as a new economic power. I think it is also good. We are ensuring a new concept of world economic development in the future. It is good stage.
Regarding some key sector of Mongolia’s economy and major sources of employment. We have been with the Cashmere Association and they are now in United States branding cashmere, we have been also with the Builders Association that organizes a trip every year to United States looking for partners and high technology. All these initiatives are done without help from the government. How is the Ministry of Foreign Affairs promoting these sectors abroad? What kind of measures have you taken so far regarding this matter?
Last year we had a conference call with all the ambassadors, the prime minister, everybody was around. We got a presentation of all these sections of cashmere and light industry. And every embassy got directives to promote, to help those producers and those businesses. I think that is going on there now. Now they are more successful. They know that there is some Mongolian embassy to help them, to support them more and those embassies are also welcoming and also for them it’s a very good experience to support Mongolian entrepreneurs and business exporters I think there is a very good collaboration going on now.
You have been spreading out this message in different official visits to China, to South Korea or in the last World Economic Forum in Davos: Mongolia needs investment. This report will be on the desk of the political court in Washington, in the beat of Wall Street and in California, the world hub of technology and innovation. What meessage would you like to send to that audience through our upcoming publication: The return of the Mongolian Empire?
There is not much to say additionally. North American mentality is really close to Mongolians. They have this ability to think big and to live in a big space and compete with nature and be effective and productive. I think for them Mongolia would be a very natural place, so we just want to invite them to be with us and to invest. They would love Mongolia.