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With a focus on curbing political risk to encourage new investment, Mongolian authorities are striving to build a competitive industry to develop the country’s abundant natural resources. Copper regained its place as Mongolia’s top export in 2014, and is the primary focus of new exploration alongside gold and niche minerals such as fluorspar and rare earth metals. While the coalition government has toned down its rhetoric of resource nationalisation, the challenge will be in implementing regulations and the treatment of existing disputes. Achieving a delicate balance between participating in projects and enabling private investment will be integral to commercialising strategic deposits, as well as building much-needed infrastructure. Despite recent delays, the government has made concerted efforts to rebuild investor confidence and expedite development of large projects, to the benefit of both the sector and the wider economy. This chapter contains interviews with G. Batsukh, Chairman, Oyu Tolgoi; and George Lloyd, Managing Director, Xanadu Mines.

Recording steady expansion, the Mongolian insurance sector’s prospects are good despite the difficulties faced more generally in the economy. Sector indicators, such as premiums per person, premiums per capita, total capital and total compensation, also suggest that the country’s insurance companies are in relatively good shape and growing fast. As in many developing countries, awareness and penetration are low, so increases come easily. On its own, this has allowed the sector to show resilience in the face of challenges elsewhere in the economy, but growth is also the result of effective strategies, the implementation of best practices and good regulation. This chapter contains an interview with D. Bolormaa, Former CEO, Bodi Insurance.

The capital markets in Mongolia have recently benefitted from a series of positive reforms, key hirings and the introduction of new legislation. Together, these measures promise to help breathe life back into the country’s stocks and bonds. After almost four years of declining equity prices, more than half a decade with virtually no initial public offerings (IPOs) and weaker demand for Mongolia’s foreign currency bonds, serious efforts are underway to attract investors. Given Mongolia’s open markets and abundant natural resources, its fundamental value is clear. The sense is that, once key problems are tackled, the country’s capital markets will boom. This chapter contains an interview with D. Angar, CEO, Mongolian Stock Exchange.

While early 2014 was a time of considerable uncertainty for the banking sector in Mongolia, the year turned out to be much better than expected. No banks failed or faced runs, and the institution that generated the greatest concern – Golomt Bank – fared well in the end. Questions about asset quality persist, and corporate governance may not yet be where it should be. However, with Golomt Bank looking increasing sound, sentiment has turned hopeful. Despite challenges, the sector continues to have good long-term potential as Mongolia’s considerable natural resources and stability promise to continue attracting international investor interest as soon as commodity prices recover. This chapter contains an interview with N. Zoljargal, Governor, Bank of Mongolia; and a roundtable with G. Ganbold, Former CEO, Golomt Bank; Norihiko Kato, CEO, Khan Bank; D. Batsaikhan, CEO, State Bank; Randolph Koppa, President, Trade and Development Bank; and M. Bold, CEO, XacBank and President, Mongolia Bankers Association.

Given its small, open economy with abundant resources including coal, copper, gold, zinc and fluorspar, Mongolia faces the same boom-and-bust cycles of any resource-dependent nation. The country has the natural endowments to provide opportunities for its 3m citizens; however, managing fluctuating growth rates, ranging from -1.3% in 2009 to 17.3% in 2011, as well as investment, trade and fiscal revenues, remains a challenge. Drawing on support from its two neighbours in the short term, the government is trying to ensure a soft landing for the economy following a significant reduction in foreign investment. That said, a rebound in investment is expected for 2015 due to a raft of new legislation taking effect. As the government consolidates its expansionary policies, it will need to accept slower growth in the interests of economic stability. This chapter contains interviews with Jim Dwyer, Executive Director, Business Council of Mongolia; Graeme Knowd, Associate Managing Director Asia, Corporate & Financial Institutions, Moody’s Investors Service; and L. Boldkhuyag, Chairman, Bodi Group.

Wedged between two of the world’s largest economies, Mongolia’s trade and investment policies are something of a balancing act. Reliant on its neighbours for both trade and transit infrastructure, Mongolia’s small, open economy has integrated with the global one by developing relationships with “third neighbours” to improve terms of trade. As surging mineral exports in the past half-decade have exposed Mongolia to the volatilities of the global commodity markets, the government aims to leverage the nation’s abundant natural resources to develop value-added production and diversify away from exports of raw materials. This chapter contains a viewpoint from Vladimir Putin, President of Russia; and interviews with L. Purevsuren, Minister for Foreign Affairs; and S. Javkhlanbaatar, Director-General, Invest Mongolia Agency.