Investment cooperation of Mongolia with foreign countries.
Investment cooperation of Mongolia with foreign countries.
N. M.Konogorov.
In 90th years economic development of Mongolia is provided in
The core at the expense of the help of the countries-donors and the international organisations
(In 1991 Mongolia has entered in members of the International currency
Fund, the World bank, the Asian bank of development).
On the beginning of 1997 the sum of the co-ordinated credits and gratuitous
The help has made 1486,6 mln. dollars, including soft loans
- 906,6 mln. dollars (61 %), free aid - 580 mln. dollars
(39 %). From them 973,2 mln. dollars (65 % of the co-ordinated are used
The sums), including credits - 504 mln. dollars (51,8 %),
Free aid - 469,2 mln. dollars (48,2 %).
The foreign help of Mongolia.
Donors of All it is promised It is used
1991 1992 1993 1994 1995г. 1996 Total
(Mln. dollars)
In total 1486,6 75,9 156,3 192,9 177,6 190,2 180,3 973,2
The preferential
Credits 906,7 50,0 92,5 83,3 87,2 79,1 111,9 504,0
The world
Bank 132,5 - 26,6 3,4 17,7 15,7 11,0 74,4
The Asian bank
Developments 310,8 10,0 24,3 5,2 21,6 29,6 55,3 146,0
The international currency
Fund 88,6 16,1 3,4 26,0 22,0 - - 67,7
Japan 220,0 23,9 12,4 22,0 2,4 22,2 29,6 112,5
Germany 40,0 - 8,8 5,6 6,6 2,4 6,1 29,5
China 23,1 - - 2,2 - 3,6 5,1 10,9
Russia 38,8 - 9,5 16,0 11,2 2,1 - 38,8
Finland 8,9 - 7,3 1,6 - - - 8,9
Resp. Korea 12,2 - - - 1,8 3,4 - 5,2
India 2,9 - 0,1 1,1 1,7 - - 2,9
The other countries 27,8 - 0,1 - 2,2 0,1 4,8 7,2
The gratuitous
The help 580,0 25,9 63,8 109,6 90,4 111,1 68,4 469,2
Japan 235,8 15,0 31,3 35,2 42,2 40,8 45,5 210,0
THE USA 93,7 7,1 20,8 35,4 11,7 4,0 1,0 80,0
Germany 58,2 - 1,3 11,1 9,0 18,8 1,9 42,1
China 0,6 - - 0,3 0,2 - - 0,5
Denmark 35,5 - 0,5 6,6 3,4 9,2 0,4 20,1
Czechia 0,1 - - - - - 0,4 0,4
France 3,7 - 0,1 1,8 1,8 - - 3,7
Resp. Korea 6,0 - 2,9 0,6 0,9 1,4 0,2 6,0
The Great Britain 5,7 - 1,2 2,2 0,9 1,6 0,2 6,1
Italy 5,4 - 1,5 2,4 1,6 - - 5,5
The Netherlands 21,0 1,4 1,5 - 4,3 5,1 1,1 13,4
The European union 21,3 - 0,6 3,2 - 5,6 6,3 15,7
The organisations of the United Nations 13,7 - - 1,1 0,8 2,9 4,1 8,9
Other 79,3 2,4 2,1 9,7 13,6 21,7 7,3 56,8
P r and m e ch and n and e. Some discrepancies of results - for the bill
Roundings off.
Leading place in granting of Mongolia of credits occupy AzBR,
Japan, IMF; free aid - Japan, the USA, Germany. Russia
From the end 80 - the beginnings of 90th years has sharply reduced the preferential
Crediting of Mongolia (in 70 - 80th years the Soviet credits and
The help was exceeded by 90 % of the total sum allocated to this country
The foreign states, also provided to 75 % of capital investments
In its economy). In 1991 - 1996 the Russian credits have made
Only 4,3 % of all credit aid of Mongolia.
Foreign donors give to this country credits for the preferential
Conditions: as a rule, for the term of 10 - 15 years from calculation 1,0 - 1,5 %
Annual with repayment through 5 - 7 years from the date of their use.
The volume of direct foreign investments does not exceed 25 % of a total sum
Credits and free aid.
On the end of April, 1997 it is used about 70 % of means,
Given to Mongolia the countries and the organisations-donors.
The structure of branch use of foreign means varies.
If at the initial stage of transition of Mongolia to market model
Economy they went basically to sphere of trade,
Public catering, consumer services, in the last
Time becomes more active and activity of the foreign extends
Investors in such branches, as working out of deposits
Minerals (including gold, silver), building
The industry, electro-and power system, coal, textile
The industry, processing of agricultural raw materials,
Business consulting, education sphere, etc. 30 % of all sum of the help
10,8 % - in social are directed on infrastructure development,
Sphere, 7,9 % - in agriculture, 7,8 % - in the industry, 6,2 %
- On public health services development. On account of the foreign help
117 projects, including in infrastructure development are realised -
53 (162,5 mln. dollars); 30 more projects (547,7 million are carried out
Dollars).
In I half-year of last year in Mongolia it is registered 114
The enterprises with 100 %-s' foreign capital. The general number
The enterprises with participation of the foreign capital has made 618 (without
Joint venture "Ð?Ñ Ð?Ñ Ð?Ñ Ñ " account, "Mongolrostsvetmet" and joint-stock company "УРРР") with the authorised
The capital 154,1 mln. dollars the Geography of firms-investors is enough
It is wide. In creation in territory of Mongolia foreign and
Joint ventures investors from 48 countries participate. On
To quantity of the joint venture investors from China - 175 enterprises are in the lead,
Further Japan (46), Republic Korea (42), the USA follow the Russian Federation (137),
(26), Singapore (18).
From 137 enterprises with participation of the Russian capital 24 operate in
Areas of building and manufacture of building materials, 18
- In working out of minerals, 16 - in transport, 13 - in
The food-processing industry, 8 - in power, 8 - in trade and
Public catering. The general capital investments of the Russian
Investors are estimated in 22,1 mln. dollars (without taking into account
Mountain-concentrating combine "Ð?Ñ Ð?Ñ Ð?Ñ Ñ ", joint venture "Ð Ð Ð?Ð ", "UBZHD").
The enterprises largest in Mongolia with the Russian participation
Are joint mountain-concentrating combine "Ð?Ñ Ð?Ñ Ð?Ñ Ñ " on
To release copper and molibdenovogo concentrates, joint
Economic association "Mongolrostsvetmet" ("MRTSM"),
Making plavikovoshpatovyj a concentrate, and also conducting
Working out of some gold-bearing deposits. These joint
The enterprises are created according to the intergovernmental
Agreements 1973 the Specified large objects of the mining
The industries work stably, with excess of the design
Capacities, are provided by a sufficient raw-material base.
Capacity of GOK "Ð?Ñ Ð?Ñ Ð?Ñ Ñ " on extraction and ore processing is increased with
16 million to 21 million t in a year. In 1997 the combine has processed 21,9
Million t ores also has made 454,2 thousand t copper and 4,1 thousand t
molibdenovogo concentrates. Association "MRTSM" last year
Has extracted 567 thousand t fluor-spar, has let out 135 thousand t
plavikovoshpatovogo a concentrate, the gold mining has made 2,3 t.
The oldest Soviet-Mongolian (nowadays - Russian-Mongolian) the joint venture
The joint-stock company "the Uhlan-Batorskaja the railway" is
("UBZHD"), based in 1949 This Transmongolian highway
In the extent over 1 thousand in km connects Naushki (Russian Federation) with
Ulan Bator and Dzamyn-Ude on the mongolo-Chinese border. On it
Share 87 % of all turnover of goods of the country, an overwhelming part are necessary
Export and import goods traffics, including transit.
In Mongolia the building organisations with 100 %-s' successfully work
The Russian capital: Open Society "Firm Zarubezheksport", KOO
"Mongoleksportstroj", company "Ð Ñ Ñ Ð Ð?Ð?Ñ Ñ Ñ Ð?Ð ", joint
Building organisations "Ð Ð?Ð Ð?Ð?" (Ulan Bator), the companies
"Erdenetstroj" (Erdenet). In 1997 the volume executed by them
Construction and repair work has made 25,3 mln. dollars
A number of projects carried out by them is financed at the expense of credits and
The help of the third countries and the international financial organisations.
The decision of questions of normalisation of position in a national economy,
Accelerations of economic development the Mongolian management in
Considerable degree connects with attraction of foreign investments.
The government of Mongolia has founded Department of the foreign
Investments, into which functions realisation of measures enters on
To stimulation of inflow to a national economy of the foreign capital.
The basic act in sphere of investments is the Law
Mongolia about the foreign capital investments, accepted in May, 1993
And come into force since July, 1st, 1993 the law Purpose is
Encouragement of investments of foreign capitals to Mongolia, protection of the rights
And imushchestv investors, and also settlement of relations,
Connected with activity of an economic unit with the foreign
The capital. An economic unit, not less than 20 % of the authorised capital
Which consists of the capital of the foreign investor, it is considered
Economic unit with the foreign capital, and on it
Action of the specified law extends. According to
The last the foreign capital can be enclosed in any sphere
Manufacture and services. The foreign investor can carry out
Capital investments in any form. The process equipment,
Brought in ustavnyj the fund, is not subject to taxation of the customs
The duty and the trading tax. Raw materials, materials, spare parts to
To the process equipment, imported into the country in
The industrial purposes an economic unit with the foreign
The capital, in all branches, except trade and public
A food, are not assessed within 5 years with the duty.
Besides to economic units with the foreign capital in
Dependences on an activity kind are given privileges at
Taxation by surtax. So, those from them which operate in
Areas electro-and heat supplies, transport, engineering
Communications, telecommunications, are completely released from the tax
Within the first 10 years also receive 50 %-s' discount for the subsequent
5 years; operating in the field of extraction and processing of the mineral
Raw materials (except for precious metals), oil, firm
Fuel, and also in metallurgy, the heavy industry and
To electronics are completely released from the tax during the first 5
Years also receive 50 %-s' discount for the next 5 years. In a case,
If an economic unit working in other branches,
Exports more than 50 % of production, it completely
It is released from surtax for three years and to it
50 %-s' discount from the tax to the next three years is given.
With a view of encouragement reinvestitsy reduction of the tax is provided
Bases for the sum reinvestirovannogo the capital.
To economic unit with the foreign capital the earth for
Uses it is given only in rent on contractual
To basis. Thus originally contract term should not exceed
60 years, it can be prolonged only once for 40 years on
Conditions of the first contract.
The economic unit with the foreign capital spends the
The activity connected with the finance, credits and currency
Operations, according to the legislation of Mongolia. In a case
Its liquidations the foreign investor can free
To translate profit and the incomes received from realisation of property,
Abroad.
Since June, 1st, 1997 the new liberalised Law has taken effect
Mongolia about the minerals, providing the wide
Possibilities for attraction of the foreign capital in economy
Mongolia. The purpose of the present law is regulation
The relations connected with conducting of investigation and working out of all kinds
Minerals, except for oil, natural gas and
Water resources. The licence order is thus established
Carrying out of search, investigation and mining operations.
The licence for carrying out of search and investigations have the right to own as
Physical, and legal bodies, and on working out of the useful
Minerals - only the legal bodies who are created and carrying out
The activity according to the legislation of Mongolia. In
The given law the documents necessary for are accurately defined
Receptions of the licence, condition of its prolongation and cases, when the licence
Can be cancelled or its action can be
It is suspended.
The licence for investigation stands out for a period of three years with the right
Two-single prolongation on two years, and the licence for extraction stands out
Within 60 years with the right of disposable prolongation to 40 years.
The owner of the licence is obliged to bring annually a licence payment for
Each hectare of the taken away site.
As a guarantee of preservation of stable conditions for
Realisation of industrial activity for long term
The law provides possibility of the conclusion corresponding
Contracts the owner of the licence with the Government of Mongolia at
Condition if capital investments it is direct in territory
The countries for first five years of realisation of the project make not
Less than 2 mln. dollars Depending on volume of capital investments
"The contract on stability" can be concluded for the term of 10 or 15
Years.
The sample "contracts on stability" contains positions about
Maintenance of invariable conditions of the taxation on an extent
The certain period, the right to export of extracted production,
The rights to dispose of the received income in HARD CURRENCY, and also positions about
The purposes, the sizes and terms of realisation of capital investments.
The government of Mongolia encourages foreign investments on
To following directions: production for export,
importozameshchajushchie manufactures, the high technology manufactures, release
Products with high degree of processing, development of an infrastructure,
Including power, transport, communication, development
The international tourism. In a branch cut the priority
Investigation and oil recovery, coal, gold, rare-earth are defined
Metals and other minerals, manufacture of meat and
Meat products, processing of intestinal raw materials, release
High-quality products from a skin, the goat down and camel
Wool, building of hotels, development of a network of communications,
Electric power industry, etc.
Realisation of measures on the further softening of a mode for the foreign
Investments will create more favorable conditions for their attraction
In a national economy. In 1997 - 2002 inflow is expected in
The Mongolian economy of the foreign help in the sum 556 mln. dollars
As to investment cooperation of Russia with Mongolia,
That within the limits of the Russian-Mongolian commission on
To trade and economic and scientific and technical cooperation
Priority branches of bilateral cooperation are defined:
The mining industry, investigation, extraction, oil refining,
Geological prospecting, the building industry, manufacture
Building materials, agriculture,
Housing and communal services, public health services and medicine.
However, unlike the Soviet period, these branches become
Objects of cooperation of Mongolia with other countries and
The international organisations; the Russian Federation faces their competition
For presence in the investment market of Mongolia. Among the cores
Directions of cooperation of the party have defined first of all
Participation of the Russian organisations in reconstruction and upgrade
Before the constructed objects and performance of new projects with the account
Economic interests as Russia, and Mongolia.
//* an information Source: BIKI, 24.09.98
//* Reg. Nom. - 1080900334.11-------------------------------------------
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