Mongolia

Extensive oil shale reserves could reduce Mongolia’s dependence on imported energy, but there is some uncertainty over whether its deposits are commercially viable.

Lawmakers in Mongolia have approved a budget for 2014 that emphasises investment in the economy and seeks to build the infrastructure needed to sustain a commodities boom and maximise growth. While this likely means higher debt levels in the short run, the expectation is that earnings will improve in the medium-to-long term.

In a move aimed at reviving flagging FDI levels, Mongolia’s national parliament has approved legislation it hopes will remove uncertainty over investor rights and facilitate the flow of overseas capital into key sectors of the economy.

Strong demand from both the public and private sectors will keep Mongolia’s construction industry busy for the foreseeable future, though the heavy calls on the building trade is stretching resources and pushing up costs.

Looking to diversify its energy sources, Mongolia is stepping up efforts to expand the value-added content of its coal industry through developing a coal-to-liquids capacity, a move that could reduce energy import costs and provide cleaner fuel.

After decades of economic dominance by neighbours China and Russia, Mongolia is breaking out by forging new trade ties with East Asian countries. While Korean firms are eyeing construction contracts, Japan is set to enter the field of energy and mining investment.