THE choice of Mongolia as an export market for Northern Ireland companies isn't one that may obviously spring to mind.
Yet this dynamic Central Asian state, situated between Russia and China and with a population of almost three million, has consistently been ranked as one of the world’s fastest growing economies in recent years.
Mongolia has undergone a truly remarkable transformation since the fall of communism in the early 1990s, and coupled with the subsequent transition to a stable multi party democracy, Mongolian economic growth is now projected to exceed 8 per cent in 2015.
This upward trend in economic activity that has witnessed even double digit growth in recent years, is projected to continue into the foreseeable future, leading to a wealth of opportunities both for exporters as well as those seeking foreign direct investment (FDI) opportunities in this rapidly emerging Asian market.
Many will therefore ask, with a world recently mired in recession, rising unemployment and other negative growth factors, what has led to the meteoric rise of Mongolia to become the star performer not only in the Asian economic sphere but amongst all other global economies, outshining the US, UK and even the previously stellar Chinese markets?
The key to the Mongolian economic miracle lies underground. Mongolia is a treasure trove of natural resources in the metals and minerals sector, with the resultant wealth arising from substantial new mining projects now generating an ever increasing demand not only for industrial and commercial products but also for consumer goods and services amongst a population that becomes wealthier with every passing year.
Exploitation of copper and gold resources in one particularly significant mining project, Oyu Tolgoi, has been identified as the key driver for Mongolian economic growth in the years ahead.
Located in vast expanses of the arid South Gobi region and close to the main market in China, Oyu Tolgoi will, when fully operational, become one of the world’s largest copper mines. With major UK mining companies including Rio Tinto already key investors in the Mongolian market, opportunities also exist for others involved either as exporters or foreign investors in this particular industrial sector.
Agriculture is the other mainstay of the Mongolian economy with animal husbandry, rather than crop production, being the main focus of agricultural output. More than one third of the population still follow a traditional nomadic lifestyle moving with their herds of sheep, goats, camels, cattle and yak across the vast steppes that make Mongolia in overall terms, a country seven times larger in land area than the British Isles.
It is the humble goat in Mongolia, however, that produces the most valuable product, with fine quality Mongolian cashmere being in significant demand worldwide both as a raw material for the garment industry and in the form of finished articles from Mongolian luxury brands such as Gobi Cashmere.
Tourism, too is an expanding industry with the unique heritage and culture of this Buddhist nation making Mongolia a popular destination for travellers, especially those stopping over on the epic train journey from Moscow to Beijing.
In recent years more than 7,000 British tourists have visited Mongolia annually, a figure that is likely to grow further given the expanding opportunities for eco tourism within the country in the years ahead.
Unlike larger export markets such as China, which can involve visits to multiple locations, doing business in Mongolia is logistically much more straightforward with virtually all commercial activity centred in the capital city Ulaanbaatar.
What was once a byword for the very essence of a remote city, Ulaanbaatar or 'UB' as it is commonly known, has been totally transformed by the ongoing economic boom. With construction cranes filling the skyline, chic boutiques and foreign restaurants now cater to an increasingly expanding Mongolian middle class and visiting foreign investors alike.
With a stream of other mining projects due to come on stream in the near future including the Tavan Tolgoi coal deposit, some commentators contend that Mongolia could evolve into the next Qatar or Brunei, a country with a relatively small population supported by substantial wealth based on natural resources. With this mind, a newly formed economic development agency, Invest Mongolia has been formed to facilitate inward investment and improve the ease of doing business in Mongolia.
Driven by the current economic boom, UK exports to Mongolia have therefore been steadily increasing each year and the inclusion of Mongolia as the next target market for Northern Ireland exporters is worthy of consideration particularly amongst those companies already experienced in supplying other Asian markets including China.
Although not a destination currently offered by Invest NI, a number of other UK regions already run a dedicated trade mission to Mongolia. Alternatively a joint mission visiting Mongolia combined with another market, most logically China, is certain to be a proposition worthy of consideration by Invest NI in the near future.
And given that Mongolia’s GDP per capita is forecast to quadruple by 2020, UK Trade & Investment have also identified Mongolia as one of the world’s fastest growing economies in the years ahead.
With the 50th anniversary of diplomatic relations having recently been celebrated between the governments of Mongolia and the United Kingdom, Mongolia looks set to confirm its place as a key emerging market for the UK business sector and its attractiveness as a potential export market for Northern Ireland businesses should not be overlooked.
:: Further information on Mongolia can be obtained in the first instance by contacting Richard Holmes, Honorary Consul of Mongolia in Northern Ireland, at mongolia_ni@yahoo.co.uk.
