Short overview of developmetns

1. Mongolia’s Business Landscape
Developments and impact
Seminar ‘Doing Business in Mongolia’:
The Hague, February 26, 2013
Larive International
Wouter van Vliet
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2. Larive International
Your partner in emerging markets
Our history
• Established in 1975
• 30+ years of experience
Our presence
• 30 local offices
• Asia, Central & Eastern Europe,
Turkey, Eastern Africa
Our clients
• Western companies
• International focus
Our areas of service
• Business intelligence
• Market entry support
• Local support & implementation
• Operational assistance
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3. Economic developments 2008-2012
The economy grew by 17.3 percent
in 2011, GDP is expected to grow at
a double digit rate over the period
from 2013 to 2017.
Poverty has been on a downward
trend over the past decade.
Source: WorldBank, The Economist
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4. Mongolia
The country
The economy of Mongolia depends upon mineral mining, livestock & animal
products and textiles.
The currency of Mongolia is the tugrik.
Mongolia has a harsh continental climate
The first democratic elections for the Great Hural held in 1990, first presidential
election in 1993.
Mongolia covers a total area of 1,564,116 sq km
Population density 1.76/km2 (NL = 405.5/km2)
Strategic location between Russia & China
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5. Changing landscape
Rural Urban
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6. Past vs. Present
Number of cars on the road in Mongolia (1990): 450
Number of cars on the road in Mongolia (2008): 110.000
Number of cars on the road in Mongolia (2013): 563.887
Cars added every month: 3.000 in UB alone
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7. If Mongolia were 100 people then there were…
43 57
50 men, 50 women Living in
rural
Living
urban
conditions conditions
27 64 9
0-14 years’ 15-54 years’ 55+ years’
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8. Facts and figures: Macro economic
Mongolia
Macro-economic health matrix Foreign trade balance, mln USD
Source: Mandal Asset Management, Mongolia
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9. Facts and figures: easy of doing business
Mongolia
Doing Business topics
Starting a business (39)
Resolving Insolvency (127) Dealing with Construction Permits (121)
Enforcing Contracts (29) Getting Electricity (169)
Trading Across Borders (175) Registering Property (22)
Paying Taxes (70) Getting credit (53)
Protecting Investors (25)
Source: Doing Business database
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10. Facts and figures: mining the mother lode
Mongolia
Source: Economist
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11. Main sectors in Economy (% of GDP)
Agriculture: 15.1%
Industry: 33.8%
Services: 51.2% (2012 est.)
Industrial production growth rate: 23%
Source: CIA World Factbook
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12. Strengths & Weaknesses
Strengths:
• Richly supplied mineral resources
• Improving macroeconomic index
• The people
Weaknesses:
• Small internal market
• Landlocked country
• Importing country
• High cost for transit & transport
• Dependence of agricultural sector on
weather conditions
Source: National Development Strategy,
http://www.ukessays.com/essays/education/economy-of-mongolia-
mining-and-agriculture.php
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13. Opportunities for Western Companies
Take the flight
• Agribusiness
• Infrastructure
• Mining equipment
• Transport & Logistics
• Water sector (irrigation)
Source: http://www.vno-
ncw.nl/publicaties/Forum/Pages/Groeikansen_voor_Ned
erlandse_export_buiten_eurozone_16887.aspx#.USuG9x
0z3To
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14. Some example companies
Monos
• Established in 1990
• Pharmacy supplier
• Monos Group unites 10
branch companies
• More than 1.000 employees
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15. Some example companies
Nomin Supermarket
• Established in 1992
• One of the top 8
enterprises in Mongolia
• Leading the trading sector,
especially retail
• Growth of total turnover
was 43.7% (2010)
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16. Much debated
Oyu Tolgoi Project (1)
• Joint venture between Turquoise
Hill Resources, Rio Tinto and the
Government of Mongolia
• Main project: Oyu Tolgoi Project in
Southern Mongolia
• Mongolian government has a 34%
stake in the Oyu Tolgoi project
• Under construction since 2010,
scheduled to begin production in
2013, reach full capacity in 2018
• Over 45 years Oyu Tolgoi is
scheduled to produce 450,000
tonnes of copper per year, and
330,000 ounces of gold annually.
• More than 15,000 workers on site
currently
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17. Much debated
Oyu Tolgoi Project (2)
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18. Downside of fast growth
The other side of the coin
• ‘Minegolia’
• Locals don’t
benefit from the
big mining
projects directly
• Gap between
have & have-not
increasing
• Lagging
infrastructure,
traffic, pollution
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19. Mongolian management association
• Established in March 1991
• Develop modern
management thinking
• Active in the fields of
development, training and
research, public and
business administration
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20. Means of entry
Into the land of the blue sky
• Export *PSI
• Distributor / Agent • Project budget: Max 1.5
• Sales office million
• Joint Venture • Subsidy: 50% (max EUR
750,000)
Lowering barriers • Project duration:
• Subsidy programs (e.g. PSI) maximum 2 ½ or 3 years
• Focus sectors: agro-food,
water, manufacturing
• Successfully conducted
over 70 projects
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21. Ease of starting a business and trading across borders
In Mongolia
Ease of starting a business Ease of trading across borders
Source: Doing Business database
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22. Do not get stuck in the mud..
Source: Doing Business database
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23. Larive International BV
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3708 JE Zeist
P.O. Box 870
3700 AW Zeist
The Netherlands
Tel.: +31 30 6933221
Fax: +31 30 6932908
Website: http://www.larive.com
Email: Wouter.van.vliet@larive.nl
www.larive.com
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