Some Facts About Mongolia Economy

Economy of Mongolia

First Published Date: September 19, 2013

Mongolia is the world’s most sparsely populated country with an area of approximately 604,000 square miles – making it the 19th largest country on earth. Mongolia’s emerging economy is mainly based on herding, agriculture, and its over US$1.3 trillion resource sector.

Before the 1990s, Mongolia’s economy was mainly dependant on aids from the USSR. Following the dismantlement of the USSR, Mongolia suffered deep recession and political and natural disasters leading to economic reforms, and eventually opening up its boundaries for free-market economies and privatization of the government-run economy.

Mongolia opened its first stock exchange in 1991 and joined the World Trade Organization in 1997. Economic growth was slightly less than 10% from 2004-2008, 6.5% in 2010, 18% in 2011, and 12% in 2012. Mongolia saw its economy contract 1.5% in 2009 right after the global financial crisis.

Mongolia’s 2012 GDP was $15.22 billion – making it 140 on the country rank comparison to the world. However, GDP growth was an astounding 333% from 1981-212 – making it 5th on the list comparison list for 2012. Mongolia is forecasted to be one of the top five fastest growing economies on earth over the next decade. GDP per capita for 2012 was $5,400, or 149 on the world comparison list.

Mongolia is rich in agriculture and mining. Mongolia exports meat, wool, and cashmere. In natural resources, Mongolia holds and exports copper, molybdenum, fluorspar, tin, tungsten, coal, uranium, precious and semiprecious stones, and gold. Mongolia is the world’s number one cashmere producer and is home to one of the world’s largest copper mines.

As Mongolia is rich in natural resources and perfectly positioned to meet China’s insatiable demand, foreign investments are pouring in. As the years go by, things are looking brighter for this amazing country.

China Currency Gets More Freedom start

China Doubles Currency Trading Band

First Published Date: April 19, 2012 ADawnJournal.com

China took another step towards the future to make its currency globally compatible on Saturday, April 14, 2012. The Chinese government announced that it will increase the trading band or range in which the renminbi (or the yuan) can trade against the dollar from 0.5 percent to 1 percent.

The fluctuation will still be done against a fixed benchmark, and this benchmark is set by the central bank. However, allowing it to fluctuate from 0.5 percent to 1 percent will increase China’s currency role in the global financial markets.

Although the U.S. has been demanding more currency freedom from China to ease its unfair advantage to exporters in China, this doubling the size of the renminbi’s trading band against the dollar may not work the same way as the U. S. is expecting.

The yuan increased about 4 percent in 2010 and about 5 percent in 2011. Many Chinese leaders believe that the yuan is close to an equilibrium. The yuan’s outlook among investors in the offshore non-deliverable forward market is not rosy and it is believed that there is room for the currency to depreciate. Also, as China is going through the slowest economy in a decade, Beijing is willing to concentrate more on its domestic economic growth than foreign export. A more flexible currency may give Chinese exporters more room to maneuver, making the currency lower than going higher.

As China wants to see the yuan as a global reserve currency and Shanghai as global financial and banking centre, the Chinese government is gradually allowing its currency to trade more freely and expect more moves from the Chinese government to achieve its dreams.  

Economy of Burma (Myanmar)

Some Facts About Burma’s Economy

First Published Date: June 2, 2012 ADawnJournal.com

The history of Burma has long been known for human rights abuses, corruption, poverty, inefficient economic policies and administrative mismanagement, and an iron-grip control over all aspects of life by the military regime. However, some recent small steps taken by the military ruler shows the willingness to open up Burma to the rest of the world and signal a military to civilian rule, and the results are already visible like a chain reaction. Major developed countries like Canada, USA, the EU, etc. have already eased some sanctions and are willing to do more to help the people of Burma work towards a better future. Today, we will look at some basics of Burma’s economy.

Burma is a resource-rich country and has one of the largest natural gas reserves in the world. Burma is also the home of vast timber, fishery reserves, precious stones, and agricultural products. However, having vast natural resources does not help the average population due to corruption and inefficiency. 50 percent of Burma’s GDP is derived from agriculture, fishery, and forestry. State manufacturing industry makes 15 percent and the trade and service industry make up the remaining 35 percent of its GDP. Although the country has huge potential in the tourism industry, due to lack of infrastructure and bad international image, it has never realised its full potential and it will take long to reach that level.

Investment in Burma from abroad has declined steadily due to an unfriendly business environment, corruption, political unrest, and sanctions. However, it is estimated that China has bumped up investments in Burma in recent years. It is hard to impossible to figure out any numbers due to the government’s unreliable and restricted economic statistics made available.

Although the Burmese government claims its GDP growth rate to be 10 percent annually, GDP growth rates for 2010 and 2011 are estimated to be 5.5 percent for each year. Its GDP per capita is estimated to be $1,300, its population below the poverty line is 32.5 percent, and its unemployment rate is 5.5 percent. Burma ranks 149th of 156 in economic freedom and ranks 130th of 178 in Human Development Index. Burma’s 2011 inflation rate is 8.9 percent. It has had very high and unpredictable inflation in the past, but for the past few years it has seemed to stabilize.

The Burmese government’s recent steps to reforming and opening up Burma and its economy toward international communities have been seen as a good gesture and a positive move and already started attracting interests and gathering momentum in abroad. However, the road ahead to start capitalizing upon its full potential to benefit its general population will be a rather long one and will have lots of bumps.

China’s Trade In Africa

China’s Investments and Forward Thinking Strategies In Africa

First Published Date: October 24, 2012 ADawnJournal.com

The United States, once Africa’s biggest trading partner, no longer holds that position. Three years ago China captured that position, and became its number one trading partner with its robust business activities. In just ten years, from 2001 to 2011, bilateral trade grew 16 fold from $10.6 billion to $160 billion. China also provided millions of dollars in food aid and as a good gesture gifted the African Union’s headquarters (cost: $200 million) in Addis Ababa.

Bilateral trade expected to reach $300 billion by 2015 and investments expected to rise 70 percent from 2009 to 2015 by $50 billion. Also, China has consistently offered loans to the African countries and currently has a $20 billion loan offer on the table for the next three years. China’s non-judgemental approach to the African countries and easy terms for loans and businesses brought China closer to Africa, while slowly pushing western countries beyond boundaries.

However, criticism exists that China is in Africa to implement its long-term forward-thinking strategies. According to many, these strategies are:

– To exploit Africa’s natural resources

– To pursue neo-colonialism by bolstering brutal and corrupt dictators

– To grab business opportunities away from the local people

– To flood the African market with counterfeiting, and cheap, below-standard quality products

– To shift China’s manufacturing infrastructure in Africa and thus shifting its population gradually into China

In spite of these criticisms, anti-Chinese protests, kidnapping and killing of Chinese workers, China’s heavy engagement and projects are distinctively visible across Africa: from stadiums in southern Africa to hydroelectric projects in the North, from government offices in the east to cultural buildings in the west. Today, China is in most African countries except these few countries that recognise Taiwan: Burkina Faso (Formerly Upper Volta), Gambia, Swaziland, and Sao Tome and Principe (the second smallest African country after Seychelles). And China’s heavy engagement will only grow in the years to come.

India Feels Global Economic Crisis Heat

And There Is The Possibility of Credit Rating Downgrade

First Published Date: December 5, 2012 ADawnJournal.com

Although the Indian economy showed streaks of optimism in September after the government’s economic reforms program, it did not take long to become sluggish again. India’s stock index and as well as its currency has weakened since October. Finance minister P. Chidambaram was right to mention that India’s economy can not be insulated due to the economic crisis the world is going through.

In 2012, the Indian economy is expected to grow 5.5 to 6 percent. Growth is expected at 7 percent in 2013. Beyond 2013, growth should be back to 8 percent. However, the International Monetary Fund (IMF) slashed India’s growth forecast from 6.1 percent to 4.9 percent.

The industrial output showed slight signs of growth, but not enough to invigorate the economy. High inflation is also a concern – although it seems like inflation has eased slightly recently. The Reserve Bank of India (RBI) has kept interest rates unchanged in the last policy review. The expectations that RBI would lower interest rates did not happen. The RBI is to announce its next monetary policy on December 18.

Public sector enterprises have been blaming high borrowing costs for the sluggishness of Asia’s 3rd largest economy. Higher borrowing costs curb consumer spending and lower industrial output. The government has been blaming public sector enterprises for sitting on large amounts of cash without putting them on investments to help the economy grow. And then there is the recent fear that rating agency Standard & Poor’s might downgrade India’s credit rating. However, India’s government is in decline and a credit rating downgrade will not happen as India is taking all the necessary steps to ride through the economic crisis.