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IS MONGOLIA THE NEXT FRONTIER?

Daniel Inman

Finance Asia, October 28, 2009

Recent developments in Mongolia indicate that the remote country is finally about to live up to its incredible potential.

With one major mining deal in the bag, and more expected to follow, Mongolia is about to enter a phase of astronomic growth. In fact, people are starting to compare the sparsely populated, resource-rich country to places like Brunei and the United Arab Emirates (UAE).

"Over the next decade, Mongolia will have the fastest growing economy in the world in terms of GDP growth, succeeding Qatar, which in percentage terms, although not absolute terms, surpassed that of China in the past decade," said John Finigan, chief executive officer of Golomt Bank, one of Mongolia's three largest banks.

The country's gross domestic product growth has averaged out at 8.6% during the past six years. By 2020, Finigan said Mongolia's GDP could be $67 billion, 14 times what it was in 2008, and that is based on conservative estimates.

This might seem like an incredible prediction, but Finigan has seen it all before. In the early seventies, he worked in the UAE, just as the fledgling state started to profit from its oil.

When the oil money started flowing in, the economy started to snowball in size; in 2008, the GDP of the UAE was $262 billion, nearly a hundred times its 1973 GDP of $2.8 billion. "The only thing that I was wrong about was that I underestimated just how much growth would be generated in the Qatari economy," he said. And it is happening all over again in Mongolia.

(...) [artículo aquí]