Friday, July 23, 2010

Development Policy

UB Post

July 23, 2010

Economic development policies of the countries is considered as the inward policy if their encouragement supporting the investment, production and foreign trade is oriented towards domestic market rather than exports and if it is intended to limit or prohibit imports or the outward policy if there almost no difference between dedicating the production for domestic market, or exporting, purchasing domestic, imported goods, making investment to abroad and domestically.

Almost most of the countries with high economic development and higher living standards than their neighbors despite their relatively small domestic market and their location surrounded by big states have succeeded based on outward economic policy and strategy. Clear examples are Switzerland, Belgium, Singapore, the Holland, Luxembourg and Israel etc.

Like Mongolia, they are all located surrounded by big states and are all politically neutral nations and they never poke their nose in. Because their neighbors are totally confident that they are true neutrals, they are in deep belief and confidence that business and citizens of such small country would never pose any threat to them. It is a sagacious and well-disciplined political philosophy to guarantee the outward economic policy by a political policy.

These small but high-rated countries have managed to turn their neighbors’ big markets into their great advantage. Citizens of such small countries speak fluently not only in languages of their big neighbors but also in internationally recognized English language and it is thoroughly estimated in all educational levels what should be a priority. The children have deep understanding and consciousness that they must learn from history and culture of their big neighbors, compare with own ones and have advantage by education and knowledge. They use dexterity and intelligence rather than strength and emotion in social relations.

Business in small country sees the difference between big states first and is able to react quickly. They introduce all achievements in technology quicker than others and are able to keep leadership for a long period.

Because they can get into business, first they yield benefits first and by the time when big states overtake them, small countries would already have started a next business. Because they have outward economic policy, banking and financial services in small countries is relatively more developed than in big countries.

Because they have service employees who can speak in all languages of their big neighbors, it is quicker and reliable for big neighbors to pass their trades through these small countries. Besides, with respect to transit trades, outstanding payment is paid out as soon as the products pass the other border. Because the money in such countries is convertible, they have relatively stable economies and low inflation.

As their economies are well circulated and are politically stable, big international banks and financial institutions, regional international organizations and transcontinental corporations race with each other to establish their offices in such small countries. Because infrastructure is developed rapidly linking standards of neighboring countries, such small countries turn into an economic hub for all fields followed by increased visitors and long and short term residents leading to the expansion of tourism, air and autoroad network, hotel, culinary services and citizens from big countries come in the morning to work for these services, and goes back in the evening or after a week.

As the country becomes wealthy, social care for population gets well and quality and because it gets more expensive for temporary visitors from abroad, foreigners have to spend a lot to live in such small countries for a long period. I believe we should develop our country in this way.

What obstacles do we have? We are the obstacles. We should spend the money earned from exploration of unrecoverable mineral resources, based on outward economic policy.

It is time for Mongolia to invest to our two neighbors, establish factories by acquiring their capital assets and lands and act on their big markets by means of their own capital.

Because Mongolia’s domestic market is small and there are less long-term economic benefits for Mongolia, it is time for us to play on neighbors’ markets and further on world market. Why we cannot be like the Jewish people.


Translated by P.Shinebayar

1 comment:

  1. Dear Jargal. I fully support your view on that issue. I have not heard such strategy-oriented ideas from current policy makers yet. I think that we have to think about how to build our countrys' competitive advantage on global market. Just would like to ask you some related questions. Are we gonna have a Sovereign wealth fund soon? How to encourage private businesses to invest in oversees?