Mongolia’s foreign economic relations at the current stage of development

Abstract

The article discusses the current foreign economic relations of Mongolia. The importance of foreign trade, foreign investment and foreign borrowing as key factors of Mongolia’s growth is revealed. It is shown that involvement of western companies in the development of the largest mineral deposits has become the basis of two-digit indicators of the country’s economic growth.
However, the flip side of resource-oriented development was the critical level of Mongolia’s dependence on exports of raw materials to China.
The government of Mongolia limiting foreign companies’ role in the economy resulted in FDI plunge, which with lower raw material prices has become one of the main causes of the 2015 economic crisis. Moreover, the lack of foreign investment had to be replenished by external borrowing leading to soaring external debt.

All these events have confirmed the urgent need for Mongolia to adhere to a multi-vector cooperation policy providing for rich world companies priority investment role, and China as the key market for raw materials exports. Despite the fact that Mongolia seeks to eliminate dependence on Russian energy resources, expansion of trade and investment cooperation with it also remains important to maintain a balance between the major foreign economic partners and ensure the economic security.