Philippe Merlin: I am struck by Mongolia’s huge potential
Mongolian Economy Magazine spoke with Philippe Merlin, Ambassador of France to Mongolia, about the relationship between France and Mongolia amid pandemic and opportunities for Mongolia.
-It has been two years since you were appointed as French Ambassador to Mongolia. How would you describe Mongolia in three words?
-Mongolia is a “very unique place”. Mongolia, a nation with a relatively small population, was able to maintain its culture, tradition and language. People have a strong national identity and are devoted to the development of Mongolia. Moreover, if you drive for one hour from Ulaanbaatar, you will see a steppe, an ecosystem untouched for thousands of years. This makes living in Mongolia really fascinating.
-Could you tell our readers the projects supported and implemented by the French Embassy in Mongolia? How did the COVID-19 pandemic affect those projects?
-First, there are projects implemented by private companies. To name a few, ENGIE, a French multinational electric utility company, has invested in the SSP windmill park in Sainshand Soum. Orano, a multinational nuclear fuel cycle company, has been investing in the development of the world-class Zuuvch Ovoo uranium deposit in the Dornogovi region. The project is implemented through Badrakh Energy LLC which is a joint venture company between the Government of Mongolia and Orano. With regard to these projects, the Embassy of France provides political support and is not directly involved in their operations.
Secondly, the French Government grants soft-loans to provide financial assistance to Mongolian public bodies where our Embassy is deeply involved in. We represent the French Government in negotiations, implementation and cooperation with Mongolian authorities. For instance, earlier this year, France provided a loan to finance the acquisition of rescue helicopters and fire-fighting trucks for the National Emergency Management Agency. Furthermore, we signed a contract for the financing of the public transit cable-car system which will be built by the French company POMA in Ulaanbaatar.
Last but not least, the French NGOs which are funded by the French government, local authorities, charities and the European Union are carrying out various projects in Mongolia. To illustrate, the AVSF (“Agronomists and Veterinarians Without Borders”), a French NGO, is supporting sustainable cashmere production in Bayankhongor Aimag. The French Embassy provides guidance on selecting projects for the French Government funding, especially in the agricultural sector with the French-Mongolian Agri Aid Funds which provides microcredits for medium and small agricultural entrepreneurs, and the French international development agency AFD.
I would say that all the aforementioned projects are heavily affected by the COVID-19 pandemic. Due to the border restrictions, French experts, professionals and trainers needed for carrying the implementation of the projects are unable to travel to Mongolia. For instance, the implementation of the rescue helicopter procurement project will have to be postponed. However, we are putting efforts with our partners and the Government of Mongolia to ensure the continuity of these projects.
-Could you tell us about France-Mongolia relations amid the pandemic?
-In France, 589,600 confirmed cases of coronavirus and 32,155 deaths were recorded as of the end of September. France has recently unveiled an economic stimulus package to help repair the economic damage caused by the coronavirus. It has been decided the government investment will be directed towards the green economy. It can be said that the pandemic creates opportunities for reconsidering and redirecting government policies towards a greener and more sustainable development. In fact, in France, 80 percent of the electricity is already green-house gas emission-free, as it is generated in a nuclear power plant. In terms of investments in renewable energy, France is ranked second in the EU. Hence the amount of CO2 emission per GDP unit is already among the lowest in Europe. But we need to do more, for instance, in transportation, and we plan to do more.
To give one example, as air travel has been hit the hardest by COVID-19, the French Government has agreed to provide a stimulus package to Air France, but under a condition that they will commit to reducing their carbon emissions, for instance, by reducing their domestic flights. These measures are part of our commitments under the Paris Agreement. The COVID-19 situation has boosted the need for an even stronger Europe and the EU is in the process of deploying a massive recovery package for its member-states.
Amid the pandemic, in order to support the economic, social and public health measures against COVID-19, Mongolia has requested financial support from international organizations. As a major contributor to the budgets of those international lenders and donors, we are indirectly providing assistance to Mongolia through the European Union, EBRD, WHO, IMF and ADB. For example, the European Union’s support to Mongolia’s response to COVID-19 totals 37 million euros which were provided through grants. The EU also offers a direct budget support program to the Government of Mongolia focused on boosting employment and improving transparency which will amount to 50 million euros.
-How do you see France-Mongolia relations in the future?
-I see immense potential in France-Mongolia relations and in Mongolia’s growth. As you know, Mongolia has abundant natural resources including sun, wind and underground minerals. At the same time, Mongolia has access to two powerful economies, China and Russia, which poses a tremendous opportunity. For instance, China has pledged to reduce its carbon emissions and move to a greener economy.
Hence, Mongolia has a rare opportunity of exporting electricity from renewable energy sources to the Chinese market. To seize the opportunity, Mongolia will need large foreign investments.
However, foreign investors including French companies are still facing various obstacles in investing in Mongolia. In order to attract and boost foreign investments, it is crucial to ensure a clear and stable regulatory framework, compliance with contractual obligations. I am confident that the Mongolian government will address those issues. I have recently attended a conference organized by MP G. Amartuvshin, Head of the newly established parliamentary committee. The conference gave me great hope that it will gradually become easier and safer to invest in Mongolia. For NGOs, the circumstances are relatively easier and better than for private companies. I have great hope for future cooperation between France and Mongolia in various areas.
-Do you provide any assistance to companies in Mongolia that intend to enter the French market? Do you offer French Tech Visa for Mongolian nationals?
-The Government of Mongolia is mainly responsible for assisting Mongolian companies that are planning to enter foreign markets. But we do provide assistance. For instance, the EU Delegation and the Ministry of Foreign Affairs jointly give assistance to Mongolian exporters and help them make the most out of the privileged access to the EU (and hence French) market including the Generalized Scheme of Preferences Plus. In addition, there is the French-Mongolian Chamber of Commerce and Industry.
The common challenge faced by Mongolian companies is obtaining sufficient investments for entering the global market. In order to compete in the EU market, the companies need financing to purchase the latest technologies, improve their competitiveness and comply with EU regulations on product safety and requirements. In short, Mongolian businesses have one major issue – raising fundings, especially for SMEs, due to the very high-interest rates. I understand the government is putting their efforts to address this.
At the moment, the French Tech Visa is not offered yet in Mongolia but we do offer a similar type of visa called “talent passport”. The “talent passport” started in 2016 to help foreign employees holding an employment contract with an employer established in France. So far, the French Embassy has issued five talent passports to Mongolian nationals.
-What products can be exported to France from Mongolia?
-There are two products that have a huge growth potential if exported to the European market – minerals and agricultural products, and here I include cashmere. If Orano and the Government of Mongolia successfully start their production of uranium, there will a market for it in Europe. Furthermore, Mongolian products such leather, cashmere and honey also have potential in Europe. However, a large amount of the raw products produced in Mongolia is exported to third countries that then export their value-added final products to Europe. Mongolia could enhance its export volume by investing in technologies that would allow the country to export their final products directly to Europe. It will also depend on investments.
-What can Mongolia learn from measures against COVID-19 implemented by France?
-I would say rethinking your governmental policies bearing in mind that the world will never return to pre-pandemic days. Mongolia could give greater priorities to innovation, sustainable development and reducing its dependency on coal.
I believe that the next sector that will drive the economy of Mongolia is renewable energy. In addition, Mongolia could invest in tech companies. For example, countries with a cold climate such as Finland and Canada have built data centers. Mongolia could become a host of data centers in the region as it has a cold climate and fast internet network.
-Do you have any final remarks?
-I am struck by Mongolia’s huge potential.
Mongolia has a bright future ahead. I do not doubt that the development of the country will further accelerate.
The country has achieved a high level of democracy compared to other countries in the region that transitioned out of communism in the 1990s. People in Mongolia can express themselves in social media freely, and indeed they do this very actively. They are deeply attached to democracy, rule of law, human rights and a free-market economy. Those are indeed major assets for your future development as a society.
As Ambassador to Mongolia, I will spare no efforts in bringing the relationship between France and Mongolia to the next level.