FX rate named as one of Top 3 risks of 2019 www.zgm.mn
With an aim to identify potential risks of public, private and sectoral, as well as their countermeasures, Mongolia's Risk Forum 2018 took place yesterday and touched upon Top 3 risks for businesses in 2019. The forum considered foreign exchange (FX), cyber security and commodity prices as Top 3 risks for next year. Regarding the FX risks, Ganzorig Ulziibayar, CEO of Golomt Bank, addressed, “Weakening MNT rate is related to Mongolia’s fiscal policy, populist promises of political parties and wasted expenditures that follows them. The Government does not implement stability or export-driven policies. The economy still remains vastly dependent on coal and iron ore exports. FX rate will always be a risk without creating an export-driven economy. This has to include intellectual export.” Organizers addressed that the fast advancement of technology is creating a massive risk, which is cyber security. Battsengel Oidov, Cyber Security Expert, remarked, “Global cybersecurity index studies national cyber security of countries. Mongolia was ranked 104th along with Palestine from 164 countries. This proves that Mongolia’s cyber security remains weak.
Mongolia ranked 104th out of 164 countries on Global Cybersecurity Index
Although banks and telecommunication companies pay close attention to cyber security, others are unable to do so. Many organizations do adapt to high-cost technologies and transfer to digitalization; however, they commonly ignore cyber security. Most of them have wrong understanding about the concept. Cyber security is investing in technology and improving the IT knowledge of their employees. It is important to implement this process coordinating these two as a whole.” As for commodity price risk, Mr. Ganzorig highlighted that the slump in China’s economic growth may affect the prices of coal, iron ore and copper. “We often say that our economy is too dependent on China; however, we are still lacking diversification actions. It is necessary that we establish a research institution that studies China’s economy and estimate potential measures for a potential downturn in China’s economy.
NECESSITY FOR DEVELOPMENT OF MANAGEMENT
The forum further suggested development of managers as a potential measure for entities to avert risks. A spokesperson of Golomt Bank addressed, “Organizations mostly focus on executive employees when it comes to human resource development. However, managers are more commonly lacking skills and requires more focus. Specifically, psychology-based development is required in management. Developing managers’ ability to identify workers’ skills and mutual understanding will help reduce human resource risks.”