Achieving Sustainable Growth in Mongolia through an Improved Business Environment
AMBASSADOR GALT: Good morning, everyone.
It is my pleasure to participate in this business roundtable.
I appreciate the opportunity totalk about the extraordinary U.S.-Mongolia partnership and what the improving Mongolian business environment means for everyone here.
I would like to start by thanking Foreign Minister Munkh-Orgil for accepting AmCham’s invitation to participate in its Fourth Annual Trade Mission to Washington, DC.
I also want to recognize GE for hosting this roundtable, the U.S. Chamber of Commerce for co-organizing this event, the delegates for participating in this discussion, and finally, AmCham Mongolia for organizing this trade mission.
As many of you know, 2017 marks the 30th anniversary of the establishment of diplomatic relations between the United States and Mongolia.
Thanks to the partnership between the U.S. Embassy in Ulaanbaatar and the Mongolian Ministry of Foreign Affairs, we have commemorated 30 years of positive, friendly relations in a series of public events, including a visit to Mongolia by members of the Philadelphia Orchestra earlier this month.
This trade mission is a highlight of our anniversary celebrations this year and an opportunity to expand our bilateral economic and commercial relationship, which is my highest priority as Ambassador.
Over the last 30 years, the United States and Mongolia have developed a robust bilateral partnership, jointly advancing democratic ideals and human rights, deepening our defense cooperation in support of global peace and security, and building new people-to people ties through the Peace Corps and educational and cultural exchange programs.
We have also worked diligently to expand our economic and trade ties.
Despite recent economic challenges, I am bullish on the medium to long-term potential of the Mongolian economy, and I am confident that our bilateral commercial relationship will continue to grow.
What are the reasons for my optimism, you might ask.
U.S. goods, services, and franchises are flowing into Mongolia.
U.S. public and private funds supporting projects like Oyu Tolgoi continue to see Mongolia as an attractive destination for investment.
Many more opportunities await U.S. companies and investors.
In our annual Investment Climate Statement, we note the challenges that businesses and investors face in Mongolia.
The 2017 edition, which we will publish on our Embassy website later this month, also identifies several important improvements in the Mongolian investment climate, highlighting positive steps taken by the Mongolian government.
In particular, we believe Mongolia’s economic and fiscal situation will improve as it successfully implements its commitments under the IMF program and the U.S.-Mongolia Transparency Agreement, which entered into force on March 20.
We believe the IMF program does much more than just send a signal to the international community that Mongolia is addressing its economic challenges.
First and foremost, it enables Mongolia to diversify its sources of fiscal support and project finance.
The IMF program, and the banking sector assessment in particular, also present an opportunity to maximize anticipated reforms to create a more attractive business environment and to support the development of a stronger private sector, which will open up opportunities for enterprising U.S. investors and exporters.
Moreover, the IMF-led reforms, along with the full implementation of the Transparency Agreement, will put Mongolia on the path to establishing the stable, predictable legal environment that businesses need.
The United States will continue to support fully Mongolia’s reforms through our participation in multinational financial institutions, as well as our bilateral technical assistance programs.
AmCham has been an invaluable partner in our efforts to bring together U.S. companies, Mongolian businesses, and the Mongolian government to improve the business environment.
Our partnership has yielded many successful outcomes, many with the direct support of the Foreign Minister.
For example, last August we joined AmCham in asking the Mongolian government to prevent the introduction of customs requirements that were inconsistent with WTO trade principles.
The Foreign Minister and his team at the Ministry studied the issue, recognized the problem, and worked with his counterparts in the government and parliament to identify and implement a permanent solution.
We have worked with AmCham on countless other initiatives: promoting the protection of intellectual property rights; improving transparency; creating the American Days Expo, which last September brought together approximately 90 businesses and organizations selling U.S. products and services in Mongolia; and developing a diversified Mongolian economy, especially in the agriculture sector.
While we acknowledge that investment challenges remain and advise U.S. businesses and potential investors to do their due diligence, we expect our vibrant and growing economic and commercial relationship to expand substantially in the years ahead.
As Mongolia’s economy returns to sustainable long-term growth, we foresee a broad range of opportunities for U.S. companies to increase their commercial activities and help diversify Mongolia’s economy.
Of course, mining will remain important, and the U.S. remains fully committed to supporting the continued development of Oyu Tolgoi.
But the opportunities don’t stop there.
Since I arrived in Mongolia nearly two years ago, I have seen a wealth of additional opportunities for U.S. technology and know-how to make meaningful and profitable contributions.
In our annual Country Commercial Guide, the latest edition of which will soon be on our Embassy website, we identify several sectors we think are worthy of attention from the U.S. private sector.
First and foremost, we continue to view Mongolia’s agriculture and animal husbandry sector as a prime destination for U.S. products and services.
To this end, we have organized a task force with the UN Food and Agriculture Organization to bring together stakeholders interested in expanding the agriculture sector and developing competitive Mongolian meat exporters.
We have also connected U.S. know-how and technology to Mongolian companies to partner and work towards this goal.
In addition, the U.S. government launched a new program in April with Mercy Corps, a U.S.-based NGO, which will use U.S. government funds to build the capacity of the Mongolian private sector to competitively export meat.
Complementing these efforts, the U.S. Department of Agriculture’s Animal and Plant Health Inspection Service is working with the Mongolian Ministry of Food, Agriculture, and Light Industry and the General Agency for Specialized Inspection to enhance Mongolia’s animal health capacity.
The U.S. Department of Commerce is also looking to follow up on its 2016 agriculture trade mission to Mongolia by bringing more U.S. companies to Mongolia this fall to explore additional opportunities.
Renewable energy and energy conservation services, logistics, information technology, franchising, and education services are also, in our view, sectors that offer increasing prospects for U.S. businesses.
I have partnered with experts from AmCham, the Mongolian private sector, the Ministry of Energy, and other organizations in Mongolia to offer Direct Line webinars on opportunities in several of these sectors, and I plan to offer additional webinars in the future.
We hope these sessions – and the robust AmCham presence here today – will help U.S. companies learn about the business potential of the Mongolian market.
I encourage everyone here today to take advantage of this roundtable to engage in a lively discussion about business opportunities in Mongolia.
I would like to once again thank Foreign Minister Munkh-Orgil for joining me to participate in AmCham’s trade mission.
I have appreciated the opportunity our joint visit has afforded to highlight for our U.S. government and business interlocutors the unique opportunities that the strong partnership between our two countries presents to advance our shared objectives of economic prosperity, respect for human rights, and global peace and security.
The long term potential of Mongolia’s future economic growth far outweighs the burden of the current economic challenges.
I am confident that, working with partners like AmCham, together we can achieve the long-term sustained economic growth that is in the interests of both Mongolia and the United States.