A snow-capped, gallant blue mountain stands approximately 100 kilometres to the southwest of Tokyo. This is the 3,775 metre high, beautiful Mount Fuji – a unique symbol of Japan and the highly respected and beloved mountain of the Japanese people.
A view from the peak of Mount Fuji lets you see the Land of the Rising Sun and its five islands stretching hundreds of miles in the blue waters of the vast Pacific.
Similarly to the way Japanese people address each other with respect, they also call the mountain ‘Fuji-san’. It is said that every Japanese person dreams of visiting the mountain at least once in their lifetime, to pay their respect, express gratitude, and refresh their souls.
The Japanese have a tradition of sending a letter of gratitude to each other, to their parents, friends, colleagues, and business partners on New Year’s Day. It is significantly valued, especially if the postcard comes from the post office elevated highest in the country and has a picture of Fuji-san.
Through this letter I would like to tell you about an event that relates to Mongolia, and is taking place in the capital city of the second richest country in the world, atop Mount Fuji.
TOKYO INVESTMENT CONFERENCE
A Japanese advisory firm named Frontier organises the “Invest Mongolia” conference every year. This year, it took place in Japan.
The third annual conference saw an attendance of almost 400 participants, 80 percent of which were Japanese. At the beginning of the conference, only four or five people raised their hand when asked whether they had visited Mongolia before.
If not the largest companies, Japan’s smaller businesses have already invested in Mongolia and started their operations. Therefore, they pay close attention to what is happening in Mongolia.
Many people noted that Japan-Mongolia political relations are going very well. Under the comprehensive partnership, Mongolia and Japan have been working together effectively and organising state visits with each other.
Mongolia is one of the few countries that has established an Economic Partnership Agreement with Japan. The maturities of democracy, organisation of elections, and change of government have become common phenomenon for Mongolia. Even though there are issues and problems, we are a country that is solving them as we face difficulties.
There is a lot of progress in Mongolia. First of all, the second phase of the Oyu Tolgoi project has commenced. In a few days, more than ten international banks will sign a $4.4 billion dollar project financing package with Oyu Tolgoi (it was signed December 15-16). A large Canadian bank is also investing in Xacbank.
In two years’ time, Ulaanbaatar’s new airport will be commissioned and is going to be managed by the Japanese. The airport will also be used by Japanese aviation companies and be turned into a large regional hub where flights are always on time.
Furthermore, the Japanese are building a hospital in Ulaanbaatar to be used by the Mongolian National University of Medical Sciences. Japanese standards of industry and services are impacting many areas in our country, which is likely to bring quality improvement and enhance competitiveness.
In addition, the cultural and educational relations of the two nations have been developing rapidly resulting in thousands of Mongolian students studying in Japan and an increased exchange of visitors. During the conference, it was also emphasised that some of the construction workforce for the Tokyo 2020 Olympic Games would be sourced from Mongolia.
However, there is a lot of room for improvement. In Mongolia’s banking sector, 14.7 percent of total loans are bad loans due to the fact that approximately 7 percent are unprofitable loans and 7.4 percent are expired loans.
A representative from Moody’s, which has recently downgraded Mongolia’s credit ratings, said that, if the Oyu Tolgoi project finance was to be delayed for any reason, the credit ratings would be lowered further.
Sales overall have slowed down, whilst the capital market has become idle. However, things are unlikely to be shaken since Mongolian banks have learned to better manage their collateral capital.
Even though industry and services have centralised in Ulaanbaatar, we are lacking a free economic zone. Commodity prices are falling, public expenditures are shrinking, and its deficit is rising. Also, the granting of loans has decreased.
A representative from the International Monetary Fund noted that, instead of accumulating, Mongolia acquired foreign loans and increased its foreign debt, whilst the economy was growing rapidly. He also said that Mongolia now needs to separate the commercial and non-commercial operations of the Development Bank, and continue the tight monetary policy.
There are some works that have commenced in Mongolia to develop industries other than mining, and to increase the number of products that are being exported.
Several participants noted that, unless we produce supreme quality, highly priced products and services, it will be impossible for Mongolia to compete with China in terms of economy of scale.
SHIZUOKA AND DORNOGOVI
Shizuoka prefecture populated by 3.8 million people is located to the west of Mount Fuji and is ranked in the top ten economies out of Japan’s 47 prefectures. The famous firms Suzuki, Honda, and Yamaha are located in Hamamatsu, which leads the prefecture in terms of industrialisation.
This prefecture has been working together with our Dornogovi province for five years now. Approximately 20 senior students from Dornogovi high school visit Japan every year to meet Japanese students, live there, and promote Mongolian traditional arts.
Also, high school no.5 in Sainshand started teaching Japanese to the public for free. People with disabilities in Mongolia established a Frisbee association and participate in the annual international competition held in Shizuoka.
Kitigawa, head of the Shizuoka-Mongolia society of friendship and owner of Kitagawa industries, coordinates this partnership and sees a bright future in the relations of the people of our two countries.
Heita Kawakatshu, the governor of Shizuoka prefecture, visited Mongolia three times and arranged for our judo, free wrestling, and cycling contestants in the Tokyo Olympic and Paralympic Games to train in Japan.
Only two cities located near Mount Fuji have been highlighted here, but there are many important events taking place in Japan-Mongolia relations and cultural exchanges such as sumo. Japan, Mongolia’s essential partner and neighbour, is growing closer and closer.
2015.12.16