8:00-9:30am . What next for Mongolia? The economy has been battered this year by closely related fiscal, currency and debt crises. The critically important economic relationship with China, which buys 90% of Mongolia's exports and is a likely source of development financing, has now entered a deep chill triggered by the recent visit to the Mongolia of the Dalai Lama.
As recently as three years ago, there were a series of articles in the Western business press calling Mongolia possibly the next Dubai, with vast mineral riches and a small population. From 2011-4 Mongolia had the fastest growing economy in the world, and for the decade through 2015 growth averaged over 9% per year. Much of that growth was fueled by inflows of FDI, which were strong even after the global financial crisis. However, in 2012, as FDI began slowing down due primarily to delays on the government's side in moving ahead with big mining projects, the government turned to global capital markets as a source for financing. Between 2012 and 2016 the government issued or guaranteed US$3.6 billion in bond issuances.
As growth continued to slow, and the budget deficit and need for financing grew steadily, the global perception of Mongolia's economy underwent a 180-degree reversal.
Mongolian Mining Corporation, a private Ulaanbaatar-based company, defaulted in May on a $500 million bond. By August one Bloomberg headline stated 'The Land of Genghis Khan is Having an Epic Economic Meltdown." The Mongolian national currency, the togrog, has fallen 20% this year, and has continued to fall in recent weeks.
It was in the midst of this that a new government was elected with a sweeping Parliamentary majority. They face zero or slightly negative GDP growth, large new sovereign debt payments in 2017 and 2018 and the falling currency and soaring budget deficit already mentioned. How are their efforts to turn this situation around progressing? What sources of financing will they tap as large bond payments fall due? Can they rekindle FDI and economic growth? These questions will be addressed based on findings from Mr. Bikales upcoming consultations in Mongolia, his second trip there this Fall.
Mr. Bikales will also discuss the impact of the new chill in Mongolian-Chinese relations and possible 'Trump effects" on Mongolia's growth prospects.
Group bookings available online for AmCham Members - bring up to 5 guests with one convenient registration!
First 15-20 minutes is for networking
Light breakfast included
Hosted by the Trade & Investment Committee