Committee chief details strategy for economic diversification and sustainability

The Mongolian economy blooms or withers depending on global commodity prices, particularly of copper and gold. Indeed, half of the state budget has for many years come from the Erdenet Mining Corporation alone. The present crisis has jolted us into a very late awareness of the need for economic diversification. How can this be achieved?

There are three main strategies. The first of these is to develop new sectors like biotechnology and nano technology that would create high value addition. A number of concrete projects are coming up in these areas. With proper Government support Mongolia can certainly reach a high level of technological advancement in the near future. This will be a step towards economic diversification.
Second, our dependence on the world market will be less when we process mineral ores and export finished products. This needs capital and technology.  

The third calls for developing a number of areas with enormous potential which are even now almost in their infancy in Mongolia. Three easy examples are food, agriculture and tourism. They have tremendous scope but the global competition is also intense in these areas. We must develop an industrial culture, a national mindset that will give the economy an opportunity to compete globally in many sectors and in many product lines. This diversification is what we need most, so that copper is no longer our only bet.  

How will the major mining projects benefit Mongolia?

Mongolia has natural resources so abundant that they can be mined for 30, 40 years, maybe even for 120 years. Once infrastructure is improved in the next 10-20 years, many major projects, besides Oyu Tolgoi and Tavan Tolgoi, can come up, and almost all aimags should benefit economically. The public is not fully aware of these possible projects because there is no debate about them. There are also many private sector projects already in various stages of implementation. They will all contribute to the economy in various measures, but it will be essential to ensure that the revenue they generate is directed to nurturing new sectors and support the intellectually oriented sectors I earlier talked about.

Income from the natural resources will at some point begin to taper off and then be exhausted. Before that happens, we must have other active and vibrant sectors to run the economy. New products have to be identified and the appropriate technology to produce them with the maximum efficiency installed.

All this will not happen overnight but with foresight and proper planning our economy should be supported by them after 30-40 years from now. Gradually, the Mongolian economy has to veer away from being minerals-dominated to one that uses advanced technology to deploy its natural resources in diverse ways and efficiently to produce ecologically sustainable and highly intellectual products.

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