President Battulga: Pragmatic economy requires political commitment

ZGM DAILY

2018-05-25 18:32 GMT+8

President of Mongolia Battulga Khaltmaa addressed the General Session of the second day of Mongolia Economic Forum 2018. The President remarked:

"Economies of our two eternal neighbors are estimated to expend to a total worth of USD 30 trillion within the next three years, a study suggests. What will our involvement in the Belt and Road Initiative look like? 28 years of being thrown here and there by the current have brought us to a dead-end, in the absence of adequate policies that coordinate with the neighboring powers and harmonious actions with our “third neighbors” in order to balance influence.

It is not necessary to look for solutions from afar. Actualizing the National Security Concept approved by the Parliament in 2010 will open multiple opportunities.

Second part of the President Battulga Khaltmaa's speech at Mongolia Economic Forum 2018

National Security Concept states: 3.1.1.4. Good neighbor friendly relations and wide-ranging cooperation with the Russian Federation and the People’s Republic of China (PRC) shall be developed. More specifically, national interests and the history of bilateral relationships shall be taken into account while regional peace and stability, as well as a general balance of relations with neighbors shall be sought.

3.1.1.5. Pursuant to the “third neighbor” strategy, bilateral and multilateral cooperation with highly developed democracies in political, economic, cultural and humanitarian affairs shall be undertaken. Pragmatizing these two will solve many issues.

Therefore, Mongolia must immediately enter into a Free Trade Agreement with the Eurasian Customs Union, which includes five nations, namely, Armenia, Belarus, Kazakhstan, Kyrgyzstan and the Russian Federation. With the agreement, I view that a trade opportunity with customs duty exemption will open with these five countries. Also, it is necessary to advance and activate cooperation with the Shanghai Cooperation Organization (SCO) within this year.

Not only will this allow for a favorable environment in the relations with the eight members of the SCO, it will also help accomplish something we were unable to actualize for many years, which is to join regional networks. Needless to say the population and economic capability of the SCO member states.

Only when creating favorable environment for foreign trade with this pragmatic approach, will we be able to attract tangible investment into Mongolia. Investors may even be able to export to European Union, Eurasian Economic Union and the SCO member states under favorable conditions, as well as non-tariff trade to Japan.

I impart that it is the convenient time to invest in Mongolia’s processing industry. Furthermore, I must mention that the country is holding a policy to retract raw materials export. The investors must note that over 7 thousand products manufactured in Mongolia will enjoy exemption of tax and quantity limit of European Union by joining the Eurasian integration.

Although the Cabinet is taking an initiative to focus on domestic issues by reforming the tax system, they are not utilizing the opportunities at hand that could raise tax revenue. We also need to estimate other possibilities of elevating tax revenue.

Only 10 products account for 96 percent of Mongolia’s exports. We have conducted a research, confirming that only semi-processed products which include value-added tax could build up USD 30 billion economy and create savings enough to fund the next phase investment.

Implementation of the already approved trilateral infrastructure network and economic corridor initiatives will provide enough profit that could equal Oyu Tolgoi project. We are now ready to sign transit transport agreement with the Russian Federation. Only when we develop the transit that connects the PRC and the Russian Federation and extends towards Europe from Eurasia, we will be able to eradicate the economic downfall that follows commodity cycle. Mongolia is able to exploit our status as one of the 57 founders of the Asian Infrastructure Investment Bank. We have no choice but to make Mongolia’s involvement active and clear in the land-based infrastructure development – Belt and Road initiative. Our geoeconomic opportunity lies here only.

If we manage to increase the revenue from Mongolia’s core sectors that fostered the country for centuries – agriculture and animal husbandry – in both environmentally- friendly and sustainable manners, we will create numerous workplaces and make substantial profit.

However, we lack political commitment and courage more than we lack necessary finance and capability. Looking back at South Korea amid the brinks of warfare and Singapore stranded at sea, they did not have wealth, chance or skills at the start of their road to become the Asia’s leading economy. It was their aspiration, sincerity and bravery that earned them today’s status.

A medieval thinker Niccolo Machiavelli described the three factors of a successful state as:

  • Virtu – the courage and determination of the leaders
  • Necessita – the willingness of leaders to implement what they consider necessary
  • Fortuna – luck.

I believe that Machiavelli meant a resolute and valiant politician capable of administering what they deem necessary will be lucky enough to lead the nation towards success. This is the only thing Mongolia and its economy are lacking. The ruling Cabinet has only a year and a half left until the end of its term. We have to think twice about whether we have the time to decide and establish.

Trilateral infrastructure network and economic corridor will provide profit equal to Oyu Tolgoi 

Mongolia Economic Forum has been carried out for eight consecutive years. People has to stop gathering here just to quibble and pretend to be smarter than others. I hope that they discuss more about actual projects, pressing issues and find effective solutions.

I would like to point out once again that pragmatic economy, instead of theories and wise judgements, requires political courage, commitment and decisiveness. Today, pedantry has taken over Mongolia, while decisiveness became a rarity.

I hope the participants of the forum realize that their voters will not support or bear the current situation if we do not lower our head and take actions for our people from this point on. Taking this opportunity, I wish success in the organization of the Economic Forum. May the future be bright. May the Eternal Sky watch over us.”

The first part of the speech was published on previous issue of ZGM Daily. Scan the QR code to get linked to the first part.  

Tugsbilig.B

GoGo Facebook Page
 
 

Go to top