Under the Soviet regime, all land in Mongolia was owned and collectively managed by the state. The 1992 constitution allowed for different forms of private land and immovable property tenure. Apartments were privatized by the thousands, as were industrial centers, farms and livestock. However, partially due to low population densities, the vast majority of land remained public property.
Mongolia faces a daunting task in improving its physical infrastructure, but has an administration with the ability to do it. On the back of stronger economic performance in the last year and pragmatic policy making, Fitch anticipated that the country’s construction industry will grow from MNT1017bn this year to 1589bn MNT in 2020.
For investors investing across international borders, the foreign exchange rate can be incredibly important. If the currency is devaluing fast, any gains on investment into assets valued in that currency can be significantly diminished. Mongolia’s exchange rate (against the US dollar) has not done well in the last few years, due to government policies against foreign investment, but shows signs of stabilizing, as the government has reversed its policies.
After several rough years, Mongolia looks set to return to fiscal health. Supported by higher commodity prices and the initiation of the fiscal consolidation program set out in the IMF bailout package, investor confidence is returning. Fitch’s recent decision to upgrade its outlook for Long-Term Foreign-Currency Issuer Default Rating to ‘B’ indicates that Ulaanbaatar is in an increasingly strong position to meet its obligations to overseas creditors.
Xi Jinping has declared war on pollution, and he means it. Thirty years of heavy industrialisation has made the environment a hugely salient political issue. Despite being chastised as one of the worst environmental offenders, China is quietly undergoing a green revolution.
In Mongolia, change is afoot. Natural resources offer rapid development - but only if the country manages them wisely. This depends heavily on how Ulaanbaatar interacts with its international partners.
Speculation has been rife as to where the reclusive North Korean dictator, Kim Jong Un, and the US President, Donald J Trump will meet. Geneva? Too far. Singapore? Too Western. Beijing? Too sensitive. Ultimately, it’s too early to call, but Ulaanbaatar has been revealed by a South Korean diplomat to have made the short list.
Mongolian Properties is the oldest, largest, and most reputable Mongolian real estate agent. We are a real estate intermedeiary and advisory firm offering agency, representation, property, management, property valuations, interior design, furnishing and financial intermediation services.