The highest mountain in Hong Kong Island is elevated at 554 metres above sea level and is named after Queen Victoria of the United Kingdom of Great Britain and Ireland. The peak of this beautiful mountain – a great creation of nature – allows you a better view of the thousands of skyscrapers sitting next to each other on the island, as well as along the coast of the Kowloon peninsula.
Among the skyscrapers, there is one man-made peak high enough to compete with Victoria Peak. It is the recently completed International Commerce Centre. The building is 484 metres high and has 118 levels. This is how Victoria Peak allows one to see the proud look of the unduplicated rapid development of Hong Kong, which has a population of 7.2 million and an economy of 300 billion USD.
From here you could also zoom into the complex opportunities of investment and development in the Asia-Pacific regional economy. It includes the overview of Mongolia’s economy and foreign investment climate. The 7th Annual Mongolia Projects and Investment Summit Hong Kong was successfully held in the Peninsula Hotel on November 17-18.
HAVING A CAREFUL LOOK
The summit saw an attendance of more than 180 people, 125 of which were foreign investors. It is a relatively low number of foreign investors compared to the years Mongolia experienced a mining boom. Following the tradition, the summit started with a discussion that looked at Mongolia’s economy and business environment from many angles.
Representatives from Mongolia’s government, the office of Ulaanbaatar, major banking and financial institutions, private sector, analysts, and foreign investors presented on various topics and exchanged feedback.
N.Zoljargal, President of Mongolbank, said “Mongolia’s economy is in a very good shape today. A new balance has been set. It is a mistake that our credit ratings have been lowered.”
He also emphasized the importance of keeping economic growth sustainable and uninterrupted, in contrast to rapid fluctuations, despite the fact that the commodities super-cycle has already ended. However, the expatriate executives of Mongolia’s two largest commercial banks (Trade and Development Bank, and Khanbank) did not seem to share the excitement of Mongolbank.
A representative from a British investment bank named Melbury Capital said “Mongolia and Antarctica are exactly the same. Everything is frozen in Mongolia. It is disappointing and discouraging.” He called on Mongolia to stop overestimating its natural resource reserves, and start a new investment chapter by being as realistic and pragmatic as possible.
Travis Hamilton, Chief Executive of Khan Investment, said “Mongolia currently boasts very few things that would make investors happy” whereas an SGC representative encouraged Mongolia to follow a ‘wait and see’ policy and called on others to observe the situation until the political and commodities cycles come to an end.
It was also noted that there is an opportunity to attract a large amount of foreign investment if Mongolia follows Georgia’s example, by removing corruption and strengthening good governance.
Bat-Uul, Mayor of Ulaanbaatar, attended the summit for the first time this year. He questioned why there was an absence of representatives from the office of Ulaanbaatar, which speaks for 45 percent of total population and accounts for 60 percent of GDP, in the previous summits. Bat-Uul went on to name large projects that the investors might be interested in.
It has been estimated that 1.5 billion USD is required to build a subway system in Ulaanbaatar, 365 million USD for a new waste water and sanitation facility, 280 million USD to have faster public transportation, and 147 million USD in the first stage to build a new logistics base.
A representative from the International Finance Corporation noted that the biggest challenge in implementing a project cooperated by the public and private sectors is that Mongolia’s tariffs for water, electricity, and heating are considerably lower than the average rates, and have too many subsidization from the government. He expanded that it is impossible to attract investment without increasing those rates.
The mayor envisioned turning Ulaanbaatar into the business and finance centre of South East Asia, which was reiterated by M.Zorigt, Minister of Road and Transportation. The minister drafted a layout on a map of the city and explained about building five corridors (natural gas, oil, electric power, road, and railway) to be considered as regional infrastructure upon agreeing with our two large neighbors. The attendees of the summit paid great attention to his presentation.
The big news of the summit, was that Mongolia has already reached an agreement with the relevant parties of Russia and China to commence a railway project in the north of Mongolia in the near future. The railway will connect Erdenet with Kyzyl of Tuva, and is intended to be used for transportation of Elegest coal from Tuva to China.
At the end of his speech, Minister Zorigt officially announced that a regional project named Chinggis Land Development was stopped due to a decision made by the court. It was observed again that it is hard to trust in the capability of Mongolian government when big projects tend to end up in a court or in a quarrel.
The summit discussed very little about the mining industry except for the Oyu Tolgoi underground development.
Most of the discussions revolved around the opportunities and challenges in large infrastructure projects, urbanization, banking and finance, capital investment, agricultural production, exports, education, and research and development.
DRAWING A CONCLUSION
Hong Kong is the largest regional center for business, commerce, and investment. It is where the regional offices of the biggest corporations in the world are located. Hong Kong is highly developed, boasts a great financial capacity, and has a functioning legal and administration system. It is the reason why Mongolia has been attracting a lot of investment from Hong Kong.
More work needs to be done to ensure we continue attending this summit, have our consular office in Hong Kong work together more actively with the organizers, prepare well, increase its effectiveness, use it as a mechanism to attract investment in not only mining but also other industries, and involve the private sector more.
It is motivating to hear that our consular office has started organizing a monthly activities in cooperation with the Mongolian Chamber of Commerce in Hong Kong, which was established three years ago.
Mongolia’s ambassadors and representative offices in foreign countries need to start sending weekly press releases or newsletters to their respective audiences, to inform them in their own language of the most notable political and economic developments in Mongolia. Their websites should be updated regularly with similar content.
The authorities are always taking expensive business trips abroad, however this does not really benefit the private sector. Only a small number of companies may be aware of what gets discussed on these trips, and what it means for them. It should not be this way.
Government officials who are going abroad to attend various conferences and training are putting their interests first, rather than the interests of the public, who are paying for their visits. It is negatively impacting the trust of the Mongolian people.
Two Mongolian members of parliament traveled to Hong Kong to attend the conference, however they did not participate in the conference outside of their own sessions, and left immediately after speaking. Having contributed to the economic decline, they do not even bother listening to the important discussions that took place amongst their stakeholders.
Such actions make others think that Mongolian people are irresponsible. In addition, Mongolian citizens connected to crimes are also impacting the reputation of our country. Our consul said that 70 percent of Mongolians who were connected to crimes in Hong Kong are people who were previously convicted in Mongolia.
Everyone should be wary of how their actions might impact Mongolia’s reputation and think about the development of our country. If every person fulfills his duties in a responsible manner, Mongolia’s economy, politics, and business environment will become stable, which will restore investor confidence.
Victoria Peak never saw a country that managed to develop without attracting foreign investment.
2015.11.25