Trends in international investment flows: Foreign direct investment in Mongolia

Despite the worldwide stagnation in FDI, interest in Mongolia on the part of foreign investors, especially those from East Asia, North America, has grown over the last few years, mainly in the mining, trade and service sectors. The increase of FDI into Mongolia can be linked with the Mongolian government’s efforts to establish a more favorable external and internal legal environment in order to provide a free and open regime for business, the shifting tendency of world market center from traditional Europe, America to Asia, namely to China, resolving the “big debt” issue between Mongolia and Russian Federation which open new favorable opportunities for intensification of foreign investment inflows, increased domestic private savings and lastly Mongolia’s GDP steady growth rate during last years. The purpose of this paper is to review FDI inflows into Mongolia, detailing the sectors benefiting from this investment and the countries where it originates, based on information gathered in the period up to 2005.