I recently returned to Ulaanbaatar after attending the Second Annual Mongolian Investment Summit in Hong Kong on October 30 and 31. By all accounts, the mood there this year was far less ebullient than the year before.
Mongolia’s enactment of the Foreign Investment Law this past summer, coupled with post-election concerns about the status of the Oyu Tolgoi Investment Agreement have markedly dampened enthusiasm for Mongolia among foreigners here. Suddenly, Myanmar is the destination on everyone’s mind.
That said, it is not as though the Mongolian government and business community are not still actively seeking engagement with foreign businesses. Mongolia has billions of dollars of infrastructure projects in the pipeline. And, one representative of a prominent broker/dealer is (not surprisingly) upbeat, telling me that now is the time to be buy stock shares in Mongolia’s publicly traded companies.
Though unabated enthusiasm for Mongolia is unwarranted, doom and gloom about foreign investment in Mongolia also does not make sense. There is already much talk here of liberalizing Mongolia’s Foreign Investment Law and the Oyu Tolgoi project recently cleared a major hurdle with the announcement that the electricity supply agreement has been
Mongolia’s Parliament is scheduled to debate the Oya Tolgoi investment agreement live on television next week and it will be interesting to see how this shapes the tenor of public discussion.
I expect the mood of foreign companies seeking to do business in Mongolia will soon improve. Mongolia is a country still working out its approach to large-scale foreign investment. For this reason alone, there will be many ups and downs for foreign investors. I have been here long enough to realize the best strategy for foreign investors is to ride them out.