Canada is a perfect example of countries that succeeded in converting its natural resources into wealth, developing all sectors of economy and providing its people with highest quality of life.
If we manage to learn from Canada’s experience, its achievements and mistakes, and implement our learning it in social and economic development, we will be able to achieve their success for the last 200 years in a shorter amount of time of 20 years in the current era of information and communication revolution.
The two countries are similar in many ways such as a large territory, population density, big neighbor and cold climate. Canada is currently one of the leading developed countries and its GDP per capita was CAD 47,600 in 2010 while ours was CAD 2,300, which was 20 times less. What has to be done to reduce this huge gap and bring Mongolia closer to Canada’s level?
Mongolians have to overcome two big obstacles in order to have more efficient governance and develop other sectors of economy. First of all, corruption has to be stopped by making public governance (in Mongolia it is called “state administration”, but actually is called “public governance” in a democratic country because the people who governs are elected officials by ordinary public and they serve the people) more transparent, productivity of public servants (in Mongolia it is called “state officer”) has to be improved and public services must be made easy to access, e.g., allowing people to get public services online, so that people will not have to deal with endless procedures.
Furthermore, a long-term policy that is directed at developing sectors of economy other than mining has to be implemented. It is time to diversify Mongolian economy by developing such clusters as mining services, tourism, and meat production, wool, and cashmere and information and communication technology. Mongolia must become competitive and introduce own products other than minerals to the international market.
Many Mongolians representing our public and private sector have attended the Prospectors&Developers Association of Canada’s (PDAC) annual International Convention hold in Toronto in early March and discussed about what could be done in developing mining services cluster in Mongolia.This is the world mineral industry’s largest convention and is being held in Toronto for the 80th time. Over 1000 exhibitors, 30,000 attendees from 120 countries are participating in the convention, which is a record-high number. During the convention, thousands of attendees have spending over USD 70 million in Toronto’s economy.
Experts brought up good news for Mongolia when they said that mining industry would keep expanding and mineral prices would increase for the next 10 years. A mining super cycle like this one was last seen during 1960-1980. The current cycle started in 2000 is to continue for another 10 years because of market needs of those countriesexperiencing rapid development and in particularChinesemassive economic growth.
Some experts also say that mining companies’ stock price is relatively low on the Toronto Stock Exchange because they are working in farer remote places and their operational cost keeps rising. According to the Minerals Economics Group, 440 tons of gold was mined from new mines in the last 10 years while gold mining from old mines was decreased by 600 tons.
Mr.Coxe, Strategy Advisor, BMOFinancialGroup, said that, when gold prices go up, stock prices of gold mining companies do not increase and their market value grows at a low rate, it gives investors a great opportunity. He also noted that, even though there would be minor rises and falls in the mining market, over all the market would be growing in general well.
About 60% or 1646 in total of all public mining companies of the worldare listed on the Toronto Stock Exchange (TSX). Market capitalizationof these mining companies listed here has reached USD 2 trillion, which has already exceeded Canada’s GDP. The secret behind why foreign mining companies choose the Toronto Stock Exchange to raise capital is that Canadians know a lot about mining sector and they can provide every service associated with mineral exploration, development, production and processing. Also, they have clear laws and rules, easy-to-get public services and there is no corruption. Therefore, investors have confidence when buying stocks listed.
Mongolia has great opportunities and needs to learn from Canada and cooperate in public and private sectors in order to improve the quality of governance and develop our mining operations standards. There are a lot of things that the Maple Leaf is telling us.
Translated by B.AMAR