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Speaking at the Discover Mongolia Forum in Ulaanbaatar on Thursday August 30, Zoljargal L said a sustainable growth with a strong middle class is the top priority for the new government.
Mongolia is a significant emerging source of iron ore, coking coal and metals including copper, almost all of which are exported to neighbouring China.
“Yes, mining is fantastic. It’s a very productive sector, even more productive than the banking sector. [But] it’s not going to use that much labour force, it’s not going to employ many people,” Zoljargal, deputy governor of Mongol Bank, said.
The cyclical nature of the mining industry will impact all aspects of Mongolia’s economy and the country needs to “do something about it”.
“If the wealth is not transferred to the middle class and the lower class, it’s not sustainable,” he said.
Zoljargal said Mongolia’s parliament has approved a public investment policy programme for 2013-2017 totalling 67.2 trillion tugriks ($49.1 billion). The capital will primarily be used in the manufacturing, transportation and mining sectors.
It will also invest in human capital, agriculture research and development, and bio-technology.
“An economy dependent on mining is not sustainable, so we’re slowly shifting to sectors that can create a strong middle class,” Zoljargal said.
“The shift at the end of the day benefits all of us, not just Mongolians but also foreign investors,” he added.
China imported 10.95 million tonnes of coking coal and 3.23 million tonnes of iron ore from Mongolia in the first seven months of 2012, up 36.02% and 24.74% respectively, according to Chinese customs data.