Mongolia is in the plan to reshape its economic landscape by tackling trade challenges, as outlined in a groundbreaking World Bank report.
Despite its relatively open trade policies, Mongolia grapples with unique hurdles owing to its landlocked and remote geography. Infrastructure bottlenecks and logistic challenges compound these issues, making adherence to international standards a significant challenge.
The ‘Mongolia Trade Competitiveness Diagnostic’ advocates for counter-cyclical policies to ensure economic stability and competitiveness. Reducing tariff rates on intermediate goods is suggested to enhance domestic productivity, alongside addressing logistical issues to cut delivery costs and expand markets.
Agribusiness emerges as a promising sector for Mongolia, with improved compliance potentially opening up new export opportunities. The report underscores the need for a conducive environment for tradable sectors to foster economic diversification.
Taehyun Lee, World Bank Country Manager for Mongolia, stresses the importance of ongoing trade policy reforms, viewing them as instrumental in unlocking Mongolia’s economic potential.
A unique proposition in the report centers on Mongolia’s digital services sector. Given the nation’s geographical constraints, the report sees potential in expanding digital services as a means of diversifying the export mix. However, this shift demands significant investment in information technology infrastructure and aligning talent with the digital sector’s needs.
The report further recommends enhancing cross-border cooperation in the digital realm to promote trade and assist digital services firms in meeting international regulatory requirements.
The World Bank report signals a call to action for Mongolia to tackle trade constraints and usher in a new era of economic growth.
By implementing strategic reforms, reducing tariffs, and venturing into the digital services sector, Mongolia has the potential to position itself as a key player in the global economic landscape. The onus now falls on policymakers to translate these recommendations into impactful actions, paving the way for Mongolia’s economic resurgence.
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