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Recent and important work on Trade and Human Development

Recent and important work on Trade and Human Development. G.Ganjargal – Officer, Trade and Economic Cooperation Department Ministry of Foreign Affairs and Trade of Mongolia. Background . Transition to a market economy -stabilizing the economy -strengthening the private sector

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Recent and important work on Trade and Human Development

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  1. Recent and important work on Trade and Human Development G.Ganjargal – Officer, Trade and Economic Cooperation Department Ministry of Foreign Affairs and Trade of Mongolia

  2. Background • Transition to a market economy -stabilizing the economy -strengthening the private sector -improving the environment for investment -privatizing of state firms -establishing fundamental market institutions

  3. Recent Economic Developments • Economy has been growing fast - GDP: • 8.6% in 2006 • 9.9% in 2007 • 10.2% first half of 2008 • 11.3% second half of 2008

  4. Recent Economic Developments • Mining contribution is substantial - Mineral products account for 84% of total exports earnings, contributes 40% of 2008 planned budget, 51.6% of FDI flow into mining - Foreign investment is scaling up: 2005-2007 amounting $ 1.2 billion. In 2007 reached $500 million, of which 67 percent went to mining while trade and food was the second largest receiver of FDI (22 percent)

  5. Recent Economic Developments • Current performance of the foreign trade : When compared to 2006, the total trade turnover increased in 2007 by 32.3 percent, exports by 22.5 percent and imports by 42.5 percent respectively. • The growth of the mining sector in 2007: • more than 70 percent of export were mineral products • copper concentrate and gold, molybdenum concentrate, fluorspar, coal, zinc and tungsten. • exports observed in 2006-2007 is not due to an expansion of the production, most of it is explained by the soaring prices of minerals.

  6. Recent Economic Developments • Inflation is very high

  7. Strengths and Weaknesses • Disadvantages (as stated in National Development Strategy): - Landlocked country - Importing country • High transport and transit cost • Direct dependence of the agricultural sector on weather conditions • Small domestic market • Advantages: - Abundant mineral resources - Improving macroeconomic indicators - Proper age structure of the population - Proximity to such huge markets as Russia and China

  8. Foreign trade • Mongolia – member of the WTO since 1997 • Trade with 109 countries • Main trading partners China - 47.9%, Russia - 19.6%, EU- 8%, USA - 5.4%, Japan- 3.5%

  9. Current Trade Regime • The multilateral trading system – tariff is the only instrument of trade policy • Generalized system of preference (USA, EU, Canada and Japan) • RTA and FTAs • Bilateral Agreement • The National trade supporting institutions - former Ministry of Industry and Trade (currently a separate department of Ministry of Foreign Affairs and Trade) - Foreign Investment and Foreign Trade Agency (FIFTA) - Mongolian National Chamber of Commerce and Industry (MNCCI)

  10. Foreign Trade

  11. What has been done • UNDP support (Trade and Human Development Project) - Global Event of Landlocked Developing Countriesand Transit Countries on Trade and Trade Facilitation28-31 August 2007 in Ulaanbaatar, MONGOLIA -Ulaanbaatar Declaration • Support to ongoing negotiation of “Transit Transport Agreement between Mongolia, Russia and China” (jointly with USAID) • “Millennium Development Goals-based Comprehensive National Development Strategy” was approved in January, 2008 by the Parliament.

  12. The Mid-term Trade Strategy • “Millennium Development Goals-based Comprehensive National Development Strategy” has identified that • the strategic objective of the foreign trade policy will be to “create a favorable environment for the implementation of economic development strategy with predominant export-oriented production and services”.

  13. The Mid-term Trade Strategy • General objective: Trade mainstreaming into development • Strategic objective 1: Diversify and increase the volume of export products • Strategic objective 2: Diversify and increase the volume of import products in line with economic development trend • Strategic objective 3: Develop and open new possibilities for domestic trade

  14. The Mid-term Trade Strategy • Priority products and services for export products • Minerals (copper, gold, coal…) • Cashmere (raw and de-haired) and garnment • Meat and specialty niches • Skin and hides • Leather vest and shoes • Health and foods supplements • Pet food • Services • Services for the mining industries • Tourism • Business Processes Outsourcing • Software development • Transport services (facilitating trade between the two neighbors) • Migrant workers

  15. The Mid-term Trade Strategy • Cross cutting issues for products and services selected • High transport cost • Trade Facilitation • Technical Trade Barriers • Sanitary and Phyto-Sanitary measures. • Intellectual Property Rights • Implementation and financing of the programme • Management of the programme • Financing sources and modalities • Monitoring and Evaluation

  16. Further development • Draft of the Mid-term Trade Strategy has been distributed to all Ministries, relevant agencies, NGOs and Associations of private sectors for comments • However, as a result of the formation of a new Government, this draft needs to be elaborated and reviewed on the basis of : • comments received from aforementioned organizations • Government action programme that is under Parliament - ongnoing discussion

  17. Thank you for your attention!

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