AMBASSADOR GALT: Chairman Byambasaikhan, Ambassadors Jaeger, Duppel, and Takaoka, and members of the Business Council of Mongolia, thank you for inviting me to discuss this important topic with fellow supporters of Mongolia’s democracy and free-market economy.
2017 marks the 30th anniversary of the establishment of diplomatic relations between the United States and Mongolia, and I am pleased that our bilateral commercial relationship, like the rest of our partnership, continues to deepen.
Despite challenges in Mongolia’s investment climate, U.S. goods, services, and franchises continue to flow into Mongolia, and U.S. public and private funds continue to support projects like Oyu Tolgoi.
While we still advise potential U.S. investors to do their due diligence, we expect to see a further expansion of our vibrant, growing economic and commercial relationship in the years ahead.
We recently published our 2016 Investment Climate Statement which is available on our Embassy website.
Partnerships with business advocacy groups such as BCM are essential to our efforts and enhance our engagement with the Mongolian government on issues of mutual interest.
Like many of you here today, we believe that Mongolia can improve its economic and fiscal situation by successfully implementing its commitments under the anticipated IMF program and the U.S.-Mongolia Transparency Agreement, which entered into force on March 20.
We encourage BCM and your member companies to back the IMF program, which will comprehensively reform Mongolia’s fiscal, sovereign debt, and banking practices and, we believe, put Mongolia on a path to sustainable economic growth.
Through our participation in multinational institutions, as well as our bilateral technical assistance programs, the United States will continue to fully support Mongolia’s reform endeavors.
We believe the IMF program presents an opportunity for BCM and its members to maximize the reforms it will bring to create a more attractive business environment and support the development of a stronger private sector, which will open up opportunities for enterprising investors and exporters.
To seize this opportunity, BCM will need to collaborate closely with the Mongolian government and urge full implementation of the multi-year program.
We welcomed Parliament’s approval of an amended budget last Friday, paving the way for the IMF Board to grant approval of the IMF program on April 28. However, our enthusiasm is tempered by Parliament’s inclusion of a resolution of potential concern to foreign investors – that foreign invested companies would be required to pass sales revenues through Mongolian commercial banks for the stated purposes of “improving the benefit of investment agreements and increasing foreign exchange reserves.” We strongly encourage BCM to voice opposition to government moves like this that change the rules of the road to the detriment of the investment climate.
Similarly, to ensure the U.S.-Mongolia Transparency Agreement’s benefits are fully realized, we encourage the private sector and organizations like BCM to proactively engage with the Mongolian government and Parliament.
By providing meaningful input during the adoption of new laws, regulations, and rules affecting trade and commerce, this tool of transparency will become part of the fabric of Mongolia’s business environment and serve as the basis for an ever more robust commercial relationship between the U.S. and Mongolia as well as the other countries represented here today.
We look forward to continuing to coordinate outreach and advocacy with BCM on key pieces of legislation affecting mining, labor, intellectual property rights, food safety, and animal health, among other areas.
Our shared goal is to establish the stable, predictable legal environment that businesses need through mutually beneficial, properly vetted changes in statutes and regulations.
As these cooperative efforts bear fruit and Mongolia’s economy returns to long-term growth, we foresee a wealth of opportunities for U.S. companies to increase their commercial activities and to partner with BCM members to help diversify Mongolia’s economy.
We continue to view Mongolia’s agriculture and animal husbandry sector as a prime destination for U.S. products and services.
Mongolia is poised to use U.S. know-how and technology to significantly expand the sector and become a competitive meat exporter.
Among our many activities in this sector, the U.S. government is funding Mercy Corps to implement a new program to build a competitive meat export industry.
In tandem with this new program, the U.S. Department of Agriculture’s Animal and Plant Health Inspection Service is working with the General Agency for Specialized Inspection to increase Mongolia’s animal health capacity, and the U.S. Department of Commerce is leading a certified trade mission this fall for U.S. companies interested in participating in Mongolia’s agricultural sector.
Renewable energy and energy conservation services, logistics, information technology, and education services are also, in our view, sectors that offer increasing opportunities for U.S. businesses.
We are providing information to U.S. companies through regular webinars that will enable them to take advantage of intriguing business prospects in these sectors.
Another area of focus and a key component of a vibrant economy is to create an environment that promotes entrepreneurship and innovation.
The U.S. Embassy’s most recent initiative in this area, our March 31 Entrepreneurship Expo, provided a venue for Mongolian start-ups to pitch their ideas to potential investors and share them with a public eager to embrace the power of innovation.
We would welcome the opportunity to work with BCM to inspire and empower Mongolia’s innovative entrepreneurs.
BCM, with its experienced team and intimate knowledge of the Mongolian commercial and economic landscape, is an outstanding partner to promote a prosperous and stable business climate.
I look forward to an active conversation with my fellow ambassadors on these vital subjects.