Our journalist talks to MP Ch.Ulaan about his report on the annually rising foreign investment in Mongolia and future prospects.

What are the definite figures of foreign investment?

Foreign direct investment has annually been increasing by about MNT100 billion for the last six years and reached about MNT800 billion so far this year. We have investors from more than 40 countries. Amendments providing protection of investment and stabilizing the business environment has led to this increase. Foreign direct investment now is more than state budget investment.

Does our reliance on loans and aid impair development?

Loans and aid helped us during the period of the economics crisis. Mongolia has annually received between MNT100 billion and MNT180 billion in the last decade but payment has been no problem as loan conditions were easy and the domestic economy also grew. Foreign loans worth MNT1.3 trillion have to be paid back, 82.6% of this is used in state-owned organizations and 17.4% in the private sector.

What about domestic capital?

Last year, 42% of the total investment in Mongolia came from foreign sources and the other 58% from domestic sources. Of the latter, 13.6% was bank loan, more than 40% private capital and 16.4% was from the state budget. We do not have accurate figures on the returns on this investment.

How can state investment be made more profitable?

About 40% of such investment has been in industry in the last years and we should look for diversification. Most of the investment has been in infrastructure, roads, transportation, construction and communication. 70% of the total investment in construction has been spent on new building, 20% to renovation and extension, and 10% to repair and maintenance. This has been the picture in the last two years and is likely to remain the same. State budget investments also are similar. Most new buildings have been for use as offices of ministries and agencies so can be seen as catering to the bureaucratic apparatus.

The number of state invested projects has been on the rise and some people criticize this as a waste of capital. What do you feel?

The number has increased. It is planned to implement about 1,100 projects with state money next year but half of them will need less than MNT100 million each. Another 40% of the money will go to finish the work on buildings started earlier. So we cannot say the money is ill spent. That is the personal opinion of some MPs.