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Mongolia is a landlocked country in East Central Asia. It is bordered by Russia to the north and China to the south, east and west. The population of Mongolia was recorded as 2.7 million in 2011 and 45% of the population lives at Ulaanbaatar, the capital of Mongolia.
Mongolian economy based mainly on the Soviet economic model between the years 1948-1990. At this period, the economy was led by agriculture and livestock. From the beginning of 1990s, market oriented economic policies started to be implemented and the share of agriculture from the GDP diminished. Industrial sector constituted 40.4% of the GDP in 2006 and 38% in 2011.
Mongolia’s important export products are copper, gold and gold products, cashmere and cashmere products.
In order to establish the legal framework of bilateral commercial and economic relations, Turkey and Mongolia have signed a number of agreements, including Trade, Economic and Technical Cooperation Agreement (1993), Prevention of Double Taxation Agreement (1996) and Reciprocal Promotion and Protection of Investments Agreement (2004).
Within the framework of Trade, Economic and Technical Cooperation Agreement entered in force in 1993, Turkey-Mongolia Joint Economic Committee (JEC) Mechanism was established. The mechanism aimed at holding regular meetings with the participation of public institutions from both Turkey and Mongolia alternately in Ankara and Ulaanbaatar to evaluate all aspects of the bilateral economic and commercial relations. The last meeting of the JEC was held on October 2010 in Ulaanbaatar.
In order to strengthen the relations between the private sectors of the two countries, and to encourage establishing new business contacts, Turkey-Mongolia Business Council was founded in 2001 and its first meeting was held in the same year in Istanbul. Furthermore, in 2010, a meeting on “Investment Environment and Business Opportunities in Mongolia” was held in Istanbul by Turkey-Mongolia Business Council.
Mongolia was Turkey’s 117th largest export partner 2011.
Turkey’s exports to Mongolia were 43 million USD in 2011 with an increase of 289% (11 million USD) from 2010. Since 2005, in which Turkey’s “Asia-Pacific Commercial and Economic Relations Development Strategy” was initiated, Turkey’s exports to Mongolia have raised by 1,051% (4 million USD).
The top export categories (2-digit SITC) for 2011 were: manufactures of metal (33%); machinery for particular industries (16.7%), coffee, tea, cocoa, spices, manufactures thereof (5.5%), electrical machines, apparatus and appliances (5.3%), and miscellaneous manufactured articles (5%).
Mongolia was Turkey’s 137th largest import partner in 2011.
Turkey’s imports from Mongolia realized as 3 million USD in 2011, with an increase of 236% (895 thousand USD) compared to 2010. Our imports from Mongolia have increased by 1,170% since 2005 (237 thousand USD).
The top 5 imports categories (2-digit SITC) for 2011 were: other transport equipment (58%), textile fibres (25%); leather, leather manufactures, dressed fur skins (8.1%), vegetables and fruit (6.4%), and hides, skins and fur skins, raw (2.1%).
The trade balance between Turkey and Mongolia has been in favor of Turkey. Turkey had a trade surplus of 415 thousand USD in 2011 which is less than the trade surplus of 2010 by 95% (10 million USD).
Contracting and Consultancy Services
There are several opportunities in the contracting sector of Mongolia ranging from housing to constructing and repairing hospitals, schools and social buildings.
Turkish contracting companies undertook 4 projects with a value of 22 million USD in Mongolia until 2011.
There were 5 Mongolian companies that operate in Turkey in the fields of construction; real estate, renting and business activities; wholesale and retail; health and social services.
On the other hand, between the years 1990-2011, 46 Turkish companies have made foreign direct investments in Mongolia with a total capital of 3.3 million USD.