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Visitor arrivals have jumped substantially in recent years, topping 475,000 in 2012, up 3.4% from the previous year and from less than 150,000 in 2000. As of mid-2013 the government has been working with the private sector to overhaul the country’s tourism regulatory regime and development strategy. In March 2013 the minister of culture, sports and tourism announced that the government had allocated $600,000 for tourism marketing in 2013, including $300,000 for promotional activities, $120,000 for international tours and expositions, and $180,000 for advertising. As of 2012 the industry’s direct economic contribution was 194m, or 2.3% of GDP. This figure was projected to rise by 7.2% in 2013 and by around 7% annually through to 2023. While major challenges remain – including how to attract visitors during the long, cold winter months – many local operators are broadly optimistic about the sector’s long-term potential. This chapter contains an interview with Ts. Oyungerel, Minister of Culture, Sports, and Tourism.

In 2012 the ICT sector as a whole posted total revenues of MNT650bn ($390m), up more than 17% from the previous years, according to the Information Technology, Post and Telecoms Authority. In the telecoms segment, the country’s four mobile operators are making plans for a considerable amount of capital expenditure in order to meet the needs of Mongolia’s rural population and to develop new higher-speed networks in Ulaanbaatar and a small number of other population centres. The country’s new foreign investment law has been widely praised and is expected to result in new interest from foreign investors. Mongolia’s reputation as a centre for ICT in Central Asia has risen considerably in recent years. On the World Economic Forum’s 2013 Networked Readiness Index, for example, the country was ranked 59th place out of 142 nations, up from 63rd place the prior year. With planned developments in mind, many local players expect to see increased levels of competition, potentially from international players. This chapter contains interviews with David Holliday, CEO, MobiCom; and N. Battulga, Executive Director, ITZone.

Agriculture, which accounts for 16% of GDP and 40% of employment, benefitted from good climatic conditions in the first half of 2013, allowing the industry to grow 20.6% year-on-year. The government has concentrated its efforts on developing the sector in a sustainable fashion with a series of programmes such as the Mongolian National Livestock Programme and the State Policy on Food and Agriculture, which are expected to run until 2021 and 2020, respectively. While Mongolian producers have historically been able to meet the domestic demand for meat, consumption has been on the rise and, since 2009, meat prices have increased while exports have fallen. Mongolia is estimated to be 60% self-sufficient in vegetables and 100% self-sufficient in potatoes. The government and the private sector alike are working to transform Mongolia into a producer of high-end luxury agricultural products, which will likely be initially marketed in the West. Achieving this goal will require a series of investments in local processing, technology, transport networks and training. So long as these issues are addressed, the sector could potentially become a major and sustainable source of export revenues. This chapter contains an interview with U. Boldsaikhan, President, Ensada Holding.

Mongolia faces significant challenges in manufacturing, as neighbouring China has a prominent edge in production of many goods. The northern country can also be an expensive country for manufacturers, with high transportation and labour costs. In May 2013, the minimum wage was raised from $87.75 per month to $120 per month. Government investment in textiles manufacturing in 2012 saw $68.8m directed to cashmere production, $45m to wool goods output and $13.5m to sewing operations. Still the potential for industry in Mongolia is under-appreciated. The prospects for the sector are positive, but the country must be careful. Mongolia has the right mix of wealth and income growth that will promote strong consumer demand in the medium and long term. Despite concerns about the future of high-end retail, Mongolia remains one of the most promising retail markets globally. This chapter contains an interview with S. Demberel, President, Mongolian National Chamber of Commerce and Industry.

Although the construction sector faces a number of challenges, such as the lack of a well-trained local workforce and low levels of domestic materials production, the sector is expected to benefit from increasing government investment in housing and infrastructure. Mongolia has a severe lack of affordable housing, and addressing this shortage is expected to be a major driver of construction activity in the foreseeable future. In addition to housing projects, modernizing and expanding Mongolia’s transport links and utilities networks is a key area of focus at present. Only Mongolian citizens are currently allowed to own land; however, foreigners can obtain usage rights to land and own buildings and other structures. While a number of challenges remain, most local players expect Mongolia’s real estate sector to continue to grow for the foreseeable future. New activity bodes well for the country’s long-term development prospects. This chapter contains interviews with E. Bat-Üül, Governor of Capital City and Mayor of Ulaanbaatar; and E. Jargalan, CEO, Erel Group.

As roads are being built, and as related infrastructure is developed, Mongolia’s connectivity and logistics are greatly improving. Significant investments in transportation have been made in recent years, especially in 2013, and more are expected. The government is spending $200m to revamp 33 intersections in Ulaanbaatar, and it has set the goal of connecting all of Mongolia’s 21 provinces to the capital. Furthermore, given that the city’s current logistics facilities are regarded as inadequate, an integrated logistics centre being planned. This will be established as a public-private partnership and involve project financing from outside sources such as international organisations, development banks and private investors. The country is home to a number of local airlines; however, it has been suggested that the market is getting overcrowded and consolidation could be on the way in the future. Mongolia’s connections are likely to continue improving over the next few years as more roads are finished and after the new airport is operational. This chapter contains an interview with G. Jargalsaikhan, President & CEO, MIAT Mongolian Airlines.