31.10.2013 The business of being a third neighbour, David Landers east asian growth markets
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Transcript of 31.10.2013 The business of being a third neighbour, David Landers east asian growth markets
THE BUSINESS OF BEING
A THIRD NEIGHBOUR
David Landers
General Manager
East Asian Growth Markets
Presentation to Mongolian Mining Summit
Perth, Australia
31st of October 2013
Australia Unlimited
Topics
• Austrade‟s value
• Bi-lateral relationship
• Environmental settings
• Opportunities for Australian business
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Who we are
• 80 offices in 48 countries, with 44 of those offices in 15 markets in Asia.
• An „inverted pyramid‟ – more than 60 per cent of our 1,000 people are offshore, and 60 per cent of those are in Asia.
• More than 400 of our staff have one or more Asian languages.
• Of the people we send overseas, and our executive officers, two-thirds have experience working in the private sector
• Work at the „market & firm-specific‟ level, not the lead on trade policy & negotiation
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What we do
Our role is to advance Australia’s international trade, investment and education
interests. Specifically, we:
• Assist Australian companies to grow business in international markets, including
through administration of the Export Market Development Grants scheme, the
TradeStart program and the Australian Century Business Engagement program.
• Provide coordinated government assistance to attract productive foreign direct
investment (FDI) into Australia.
• Promote the Australian education sector in international markets and assist
Australian education providers with market information and services.
• Provide advice to the Australian Government on its trade and investment policy
agenda.
• Deliver Australian consular, passport and other government services in 16 designated
overseas locations.
• Manage the building Brand Australia program to enhance awareness of
contemporary Australian skills and capability, and to enrich Australia‟s global
reputation.
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Our great strength -- sustained on-the-ground
presence in offshore markets
• We identify opportunities in market
• We can interpret the business climate and local commercial practice,
and provide language support as well
• We can brief you in-depth on the market and the companies involved
• We can refer you to potential customers in market
• We can develop a visit/contact program for you
• We can set up, and direct you to your appointments
• We can provide ongoing in market assistance to assist in
establishing your business presence.
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Mongolia’s ‘Third Neighbour’ policy
• Defined by current Mongolian president as neighbors
with a “values” rather than land connection
– Rule of law
– Human rights
– Market economy
• Strategic balance to potential overreliance on Russia and
China for trade and investment
• Third neighbours include Australia, Canada, Japan,
Korea, Britain, EU and the US.
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Australia – Mongolia relations
• Diplomatic relations established 1972
• Mongolian Embassy opened in Canberra 2008
• Australian Consulate-General opened March 2012
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Australian engagement
• Australian engagement focused on development assistance and commercial activities in Mongolia's resources sector
• Since 1995, Australia has provided more than $81 million in aid to Mongolia with significant expansion in the last two years
• One current minister and three serving members of parliament have studied in Australia.
• Since 2008, 51 Mongolian MPs have visited Australia
• Mongolia looks towards Australia when setting new standards.
• More than 120 young Australian volunteers have contributed to Mongolia‟s development, including Austrade‟s Trade Commissioner to Dubai, Anna Lin.
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The Australian Mission in Mongolia
• Austrade services commenced via Seoul in 2009
• A permanent Austrade office established in Ulaanbaatar in May 2011
• Office upgraded to Consulate-General in March 2012
• Two permanent AusAID Staff commenced April 2013
• Consulate supervised Australian election ballots in September where 122 Australian citizens voted.
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Mongolia’s strengths
• Commitment to peaceful democracy
• Aspirational population
• Strong bilateral political and economic relationships
• Abundant, high quality mineral deposits of gold, copper, uranium and coal
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Key dimensions of the Mongolian economy
• The mining sector is integral to the Mongolian economy – 20 per cent of GDP
– 67 per cent of industrial output
– 91 per cent of export earnings
• Mongolia is very closely correlated with China: 92% of exports are destined for China
• China and Russia are the major counterparties for Mongolia‟s imports – imports from Russia (mostly oil) are 24.5% of Mongolia‟s imports
– imports from China (consumer goods) are 30.8% of Mongolia‟s imports.
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Potential for continued high growth exists
Source: The Economist& World Bank Mongolia Economic Update April 2013 f = forecast
-5
0
5
10
15
20
2009 2010 2011 2012 2013f 2014f 2015f
World Bank: GDP growth % 2009-2015
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FDI finding a new level post the OT spike
Source: World Bank and EIU f = forecast
FDI and service imports
0
1
2
3
4
5
2009 2010 2011 2012 2013f 2014f
$U
S b
illi
on
FDI Net services imports
Economy Overview (out of 185 economies)
Source: The World Bank Group, Doing Business 2014 data for Mongolia
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Example -- establishing a business in Mongolia
• Key laws: Company Law, Civil Code and a new Law on
Foreign Investment (effective 1st November)
• Registering a business takes 4-12 weeks
• Foreign companies can establish a representative office,
but parent company typically liable
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Improvements in human capital
• US$126 million has already been spent on training & education in the past 3 years and demand is expected to remain strong.
• Within the next few years, up to a thousand Mongolian students will have received an Australian certified vocational qualification in-market, in fields such as OH&S, basic trades and mining operations.
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Mongolia slated to spend US$40B improving
infrastructure over next 5-8 years • Road
• Rail
• Power
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0
5
10
15
20
25
30
35
40
45
50
2008 2009 2010 2011 2012
US
$ M
illio
n
Australia’s merchandise exports to Mongolia
A small but growing export market for Australia
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The challenge makes the opportunity
• METS
• Contract mining
• Mine-to-market rail design
• Construction and operations
• Urban planning
• Health and medical infrastructure and professional services
• Vocational education
• Professional services
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Success Factors
• Are you Mongolia ready?
• Check your assumptions: climate, transport and
infrastructure difficulties require careful planning
• Conduct due diligence on potential partners
• Invest in relationships and staff training
• Enjoy the journey of Mongolia‟s transformation!
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A very good place to start the journey…
Australian Consulate-General
Australian Trade Commission (Austrade)
4th Floor, Naiman Zovkhis Building, 21 Seoul Street, Ulaanbaatar -14251 Mongolia
Telephone: +976 7013 3001
Fax: +976 7013 3014
Email: [email protected]
Website: www.austrade.gov.au/mongolia
Key contacts:
Tony Burchill Consul-General and Trade Commissioner [email protected]
Ijilmurun Yalalt Office Manager and Consular Officer, [email protected]
Solongo Dashdendev Business Development Manager [email protected]
Bart Gurbazar Business Development Manager [email protected]