AS PREPARED FOR DELIVERY
AMBASSADOR GALT: MP Tsogtbaatar, my fellow Ambassadors, business representatives, ladies and gentlemen, good afternoon.
It’s a pleasure to be part of this distinguished Ambassadors Panel at this year’s Invest Mongolia conference.
I would like to thank the organizers for bringing together all the important stakeholders in Mongolia’s economic future.
Open dialogue among governments, businesses, and international experts is essential to keep Mongolia moving in the right direction.
For my part, I always appreciate the insights of my fellow Ambassadors and look forward to hearing the questions from the audience as well.
At the outset, I’d like to highlight the robust U.S.-Mongolian bilateral partnership that spans multiple areas, from human rights to global peacekeeping.
We have been celebrating this partnership throughout the year, as 2017 marks the 30th anniversary of the establishment of diplomatic relations between our two countries.
As Ambassador, my highest priority is to deepen our economic relationship, particularly our bilateral commercial ties.
Our efforts in this regard are multi-faceted – from implementing the U.S.-Mongolia Transparency Agreement; to supporting Mongolia’s development of a competitive agricultural export industry; to providing technical assistance to the Bank of Mongolia to enhance its ability to monitor and deter money-laundering and illicit financial transactions.
Supporting the IMF program for Mongolia is a key element of our economic strategy and, we believe, an essential ingredient in enhancing our commercial relationship.
The IMF program provides a great opportunity for Mongolia.
The technical assistance the IMF brings, along with other assistance from such donors as the Asian Development Bank and the World Bank, can yield significant, positive, long-term change in Mongolia’s economic trajectory if – but only if – Mongolia uses the opportunity to make the right policy decisions.
The IMF is poised to help Mongolia address many problems of long standing, from creating a responsible budget process to improving oversight of its financial system, to supporting a sustainable development bank.
Attaining these results will bring immeasurable benefits to Mongolia and to Mongolians, and it is for that reason that we will continue to urge Mongolia to meet its IMF commitments.
We recognize that certain IMF requirements may not always be popular or easy to implement, but we believe strongly that it will be worth it in the end – in this instance, the end really does justify the means.
Fulfilling the IMF commitments will, among other positive outcomes, make Mongolia more attractive as an investment destination, leading to more foreign and domestic investment down the road.
It is no secret that when deciding where to invest, companies look for low-risk commercial environments where respect for the rule of law provides the stability, consistency and transparency they seek.
Strict adherence to the IMF program will help create just such an environment in Mongolia.
The United States endeavors to help Mongolia become a place where investors from across the world want to invest, but success attracting investment is ultimately up to Mongolia.
I have consistently urged the Mongolian government to fully implement the U.S.-Mongolia Transparency Agreement.
Once implemented, it will give Mongolia the framework to develop a high degree of transparent, democratic interaction in the law and rulemaking processes in line with international best practices.
Such a framework will help all companies – American, Mongolian, and others – compete on a fair and equal basis under the law.
I would urge companies to avail themselves of the tools of transparency that our Transparency Agreement makes available to them.
We are also supporting the government’s efforts to develop the Investment Protection Council, a measure that could help resolve commercial grievances before they become full-blown, public disputes or, worse yet, are treated as criminal cases.
This council could help make Mongolia a more investor-friendly destination.
Last week, I joined Minister Munkhbat as he introduced the IPC to AmCham businesses and listened to investor concerns.
We understand that enhancing the investment climate is a comprehensive process that takes time.
It is not enough, however, to address some symptoms of the problem, such as exit bans or certificates of origin; rather, the government must demonstrate a deep and abiding commitment to improving the rule of law, and to providing stability and transparency.
The government must also commit to the long-term process of adapting Mongolian laws and bringing Mongolian standards in line with international standards to which U.S. and other foreign companies adhere – and without which they will be reluctant to invest.
We, of course, look for ways to get more U.S. companies into Mongolia.
Through our annual Investment Climate Statement and Country Commercial Guide, we encapsulate investor sentiment toward Mongolia and identify areas of potential interest to U.S. commercial entities.
We point out that investors think Mongolia has yet to attain a low-risk commercial environment based on rule of law, stability, and transparency conducive to investment; and we have seen that U.S. companies take these elements into account in their investment decisions, often choosing to wait for improvements before investing.
I have spoken previously about Mongolia’s vast agricultural endowments and how U.S. companies possess the know-how and technology to help turn potential into real profits.
U.S. companies acknowledge Mongolia’s great potential, but note that the legal and business environment in Mongolia make any investment risky.
From my perspective, this is the primary challenge for Mongolia in reaching out to the world.
Mongolia is reliant on foreign direct investment to drive its economy, but because Mongolia competes with the rest of the world for investment, it will need to up its game in order to be an investment destination of choice.
The challenge is not making the world aware of Mongolia’s commercial opportunities – the world already knows what Mongolia has to offer.
Rather, it is continuing to make Mongolia more competitive for that international investment, moving Mongolia from just having potential to being replete with profitable business opportunities.
If the government takes the necessary steps to effect real, sustained change, I’m hopeful Mongolia could be on the right path to become a destination of choice for investors.
Thank you. I look forward to hearing from my colleagues and to the question and answer session.
