As part of the annual “Investor Nation” Conference, Tenger TV hosted a discussion on this year's key topics. The panel included Hannes Takacs, Resident Representative of the European Bank for Reconstruction and Development (EBRD) in Mongolia; B. Anar, Head of the Foreign Investment Department at the Ministry of Economy and Development; B. Zolboo, Executive Director of Ard Financial Group; and D. Gan-Ochir, Chief Economist of the Mongol Bank.

Moderator A. Undral:
What are the most advanced provisions in the Government’s 2024–2028 action program related to Foreign Direct Investment (FDI)? How do they compare to the previous program?

B. Anar:
From 2020 to 2024, the government focused on economic recovery post-COVID-19, maintaining stability, and improving macroeconomic indicators. By the end of last year, the economy had improved significantly, with foreign exchange reserves reaching approximately USD 5 billion, and economic growth exceeding targets.

The new 2024–2028 action program emphasizes stable economic growth over the next four years. This involves reducing risks, boosting energy sector efficiency, and increasing foreign exchange inflows through export-driven infrastructure projects. Key initiatives include large cross-border railways and road networks to support exports.

FDI remains critical. While Mongolia's mining exports (e.g., coal, copper, iron ore) are significant, they face limits. Sustainable growth depends on trade, exports, and direct investments. Of the 149 projects outlined in the action plan, only 30% can be state-funded, while 65–70% require private-sector involvement or public-private partnerships. Projects like the Mongolian-French uranium enrichment plant exemplify this collaborative approach. The government's strategy prioritizes infrastructure development to attract FDI and bolster competitiveness.

Moderator A. Undral:
How does the Mongol Bank view the government's optimism? Is this the right time to implement such large-scale projects, and what are the macroeconomic implications?

D. Gan-Ochir:
The economy is in a recovery phase, with projected growth of 6% this year and inflation at 7–8%, aligning with our goals. Foreign exchange reserves stand at USD 4.7 billion, and the Tugrug has been stable for two years.

This stability provides a foundation for pursuing ambitious projects. However, sequencing and prioritizing these investments are crucial to avoid destabilizing the macroeconomic environment. Of the 130 trillion MNT needed for the projects, 40 trillion will come from the budget, and the rest through private-sector partnerships and FDI.

Mongolia’s focus on green energy, renewable energy, and mining aligns with global trends. However, challenges like low energy prices, tender inefficiencies, and macroeconomic risks need addressing. Stable policies, long-term loans, and strategic scheduling are essential to mitigate risks. Maintaining the balance between growth, stability, and development is the Central Bank's primary goal.

Moderator A. Undral:
Mongolia plans to implement over 140 projects in the next four years. What is the EBRD’s perspective on Mongolia's economic prospects and its capacity to attract FDI?

Hannes Takacs:
At EBRD, we are optimistic about Mongolia’s economy. Economic growth has consistently surpassed forecasts—for instance, last year’s 7.3% growth exceeded expectations. The recent Mongolian Investment Forum in Singapore showcased heightened investor interest, reflecting Mongolia’s growing appeal on the global stage.

To implement mega projects, private-sector involvement is crucial. A stable legal framework is necessary to build investor confidence, addressing issues like protection of investor rights and dispute resolution mechanisms. Beyond infrastructure, sectors like renewable energy, agriculture, and domestic production hold significant potential. For example, renewable energy could attract substantial investments, as seen in Uzbekistan.

Mongolia’s strategic location offers opportunities to integrate with Central Asia’s market. Strengthening industries, improving labor force skills, and diversifying the economy away from mining are key. The EBRD will continue supporting these initiatives to position Mongolia as a leading investment hub.

Moderator A. Undral:
What challenges must the private sector address to attract FDI? What role does the government play?

B. Zolboo:
Political instability and extreme nationalism are major risks that deter FDI. Countries like Chile and Zimbabwe, once attractive to investors, lost their appeal due to such issues.

The government must create stable, transparent, and long-term policies. Incentives like tax advantages and special economic zones for export-driven sectors are effective. Investments in export-oriented industries can boost the economy and workforce.

The private sector must also demonstrate social and economic benefits to the community. Public transparency about projects’ positive impacts is vital. Lastly, avoiding extreme nationalism and fostering a balanced approach is critical to maintaining investor interest.

Conclusion:
The 60-minute discussion provided insights from government, private sector, and policy representatives, presenting a holistic view of Mongolia’s FDI landscape and future prospects.