Distinguished economic leaders,
Dear organizers of this important event,
Let me, first of all, extend to you my warm greetings and express my sincere thanks for the opportunity to say a few words from the rostrum of this prestigious gathering.
Ladies and gentlemen,
Economic issues, especially the topic of supporting and adequately collaborating with the wealth generators, remain to be the most acute and significant problems these days. If we place blue markers on the map to note the business sectors and territories where the pressing economic problems wait speedy solutions, then we will see overwhelming blue areas in our world. This is the time we live today.
Therefore, it is very important that this Summit presents a single platform for top economic managers, political and public figures and international and interested stakeholders to discuss topics of our common interest and aims to inject an impetus to intensifying our cooperation. This gathering is of a special importance because today is the time when more and more economic and financial problems emerge and a heating of crisis cycle is evident.
Ladies and gentlemen,
Mongolia has experienced a slow-down of economic growth and a contraction of various investments during the last two years. Even our banking and financial sector is facing difficult challenges.
Nevertheless, the substantial growth of the Mongolian economy during the last 10 years, produced directly by the mining sector investments and the favorable conditions of the minerals’ market, has created opportunities for other economic sectors to develop as diversified and for a rapid expansion of the country’s infrastructure. Today’s Mongolia has managed to become a very attractive destination country in terms of economic development and investment. Not only mining, but also banking and finance, construction and roads, and energy have turned out as sectors waiting for partners, investment and its right time for a number of mega projects.
Such an economic diversification and diverse opportunities have been made possible by the Mongolian companies and businessmen. They, in their opportunity creating adventures, make mistakes; sometimes inadvertently violate laws; and such violations prompt them to turn underground. There is no chance or time to timely rectify their mistakes 100%. Such unlawful actions pushing business people to go underground take a snowball effect. Such a situation is called to be a shadow economy. In such circumstances, it will be a very clever economic stimulus if the state and society exercise their wisdom and courage to protect and pardon the nation’s wealth creators and taxpayers. Such a step must be made by politicians.
Ladies and gentlemen,
Mongolia, during the 25 years of its simultaneous political and economic transition and its democratic development, applied the state pardoning six times. For example, such law on pardon was adopted in 1991, 1996, 2000, 2006 and 2010. The latest pardon was legislated on 11 August 2015. At the almost same time with this law on pardon, the Parliament of Mongolia passed another law on economic transparency. These two laws as compared to the previous similar laws have a wider coverage in terms of application, content and time period. The adoption of these laws presents a solution to provide an enormous support to our worsening economy and to substantially stimulate the long-term economic progress when the pulse of the Mongolian economy and finances is slowing, the scaling back is observed everywhere, and the current international financial market is experiencing unfavorable conditions.
There are numerous cases when individuals are prosecuted for a wealth creation; for their efforts to produce wealth. The business legal environment is never perfect. Maybe, one in his risk-taking business projects may have inadvertently violated law. The state, taking into account such an innocence of actions, could provide a positive impact on business environment through a pardon; through one-time acquittals. Though there might be a suspicion for a cover-up of offenders or for a conspiracy, the pardon will become of invaluable importance in saving many small and medium enterprises, in recovering potentially hidden income and capital, and in establishing a new level-playing field.
The Mongolian politicians and political parties pursue the policy of improving the nation’s economic environment and supporting other sectors out of income accumulated from the peak of mining development. The latest decision on pardon was taken by the politicians with a view that the state should pardon once the people who stayed behind the risks taken in the process of fundamental economic reforms. The state wanted, by the pardon and one-time acquittal, to remind the society of the lack of generosity in today’s harsh fight for income generation.
Ladies and gentlemen,
Mongolia has long been an active participant in the Northeast Asian cooperation. Northeast Asia is an unparalleled region in the world in terms of its natural resources and development potentials. Though the region is rich in untouched nature and resources and minerals, they remain unused and not commercialized due to inadequate local infrastructure. Every country’s efforts and participation are especially important in developing this beautiful region.
Mongolia as a scarcely-populated and vast country should define its role to participate in the regional integration. Mongolia has a 3-million population and $3,300 GDP per capita. Its GDP is estimated at $10 billion.
It is, therefore, natural that large, mega-projects, referred to above, require an investment that is beyond our own national capacity. Only foreign investment can finance these projects. On our part, we should provide stability of governance, enforcement of rule of law, constructive and efficient government mechanism, profitability and freedom of private sector. We are taking many reform measures in consolidating the supremacy of law.
Another advantage of Mongolia is its geographical location transcending not only Northeast Asia, but also Central Asia. Flights from China, India, Russia, Japan and Korea to Ulaanbaatar are short. Such an advantage can be turned into a superior opportunity to make Mongolia a central regional hub for banking and finances, negotiations and meetings. Our region needs to establish a mechanism that unites the regional banks and financial institutions and that can justify our mutual confidence.
Therefore, we propose to create a regional financial hub in Mongolia. Such a Northeast Asian financial and business hub can be coupled with a project to establish a free economic zone near Ulaanbaatar with an advanced infrastructure and a preferential tax regime. I invite you all to join our initiative to turn Ulaanbaatar into a Central Asian Hong Kong.
Thank you for your attention.