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Mongolia Sets Goal to Double GDP per Capita, Seeks Investment in Mining Sector www.bnnbreaking.com
In a bold bid to boost its economic strength, Mongolia plans to double its Gross Domestic Product (GDP) per capita to $10,000 by the end of this decade. The ambitious target hinges on substantial investment in the country’s dominant mining and metals sector, as announced by Finance Minister Javkhalan Bold. Rich in mineral resources, Mongolia depends heavily on its mining industry, which contributes to a quarter of its GDP and accounts for 90% of its export revenue.
Untapped Potential of a Mineral-Rich Nation
The vast Oyu Tolgoi copper and gold deposits in the Gobi desert are a testament to Mongolia’s mineral wealth. The country, now open to partnerships with foreign investors for exploration, exploitation, and processing within the mining sector, sees this as a pivotal step to achieve its economic goal. However, the government has not yet revealed specific project details.
From a GDP per capita of $5,000 last year, Mongolia is projecting an increase to $6,000 this year. To reach the ambitious $10,000 target, the nation would need to develop two or three projects on the scale of Oyu Tolgoi, signifying a substantial investment. In the past, the government has invested around $10 billion in Oyu Tolgoi, which it partially owns alongside Australian mining giant Rio Tinto.
Overcoming Past Challenges
Mongolia’s journey has not been devoid of obstacles. The country has grappled with issues such as poor management of state-owned mining entities and debt problems. However, the recent settlement of tax disputes with Rio Tinto over Oyu Tolgoi signifies progress and a move towards a more stable economic environment.
The country maintains a cautious approach towards external finances. With a high policy rate of 13% due to inflation concerns, Mongolia has no immediate plans to issue on international markets following recent bond buybacks. The government is also contemplating supporting corporate and municipal bond issuances, with the capital Ulaanbaatar potentially launching its first bond soon.
Hope for a Brighter Economic Future
Mongolia looks forward to improving its sovereign credit rating. The hope was bolstered after Fitch reaffirmed its rating at B in 2023. As the country moves towards its goal, the focus remains on leveraging its rich mineral resources and securing strategic investments in the mining sector, paving the way for a prosperous economic future.
Published Date:2024-01-10
