Annex 1 to Government Resolution
No. 324 of 2009

PROGRAMME ON ENHANCING THE ECONOMIC ORIENTATION
OF FOREIGN RELATIONS OF MONGOLIA

One. Rationale for Programme Formulation

1. Mongolia’s state policy and actions are directed at the advancement of the mutually beneficial economic cooperation with foreign countries through materializing the country’s comparative advantages with a view to intensifying the country’s development in accordance with the Comprehensive National Development Strategy based on the Millennium Development Goals, the National Security Concept, the Foreign Policy Concept and the Action Plan of the Government and other policy documents. The Government of Mongolia has set its priorities to reform and diversify the present economic structure dependent on natural resources and raw materials, to increase exports of value-added goods, to develop production of import-substituting goods in certain sectors, to introduce and localize new technologies and to increase foreign investment. It has become crucially important to direct foreign political relations and diplomatic activities to generating increased income for citizens, creating more jobs and ensuring sustainable development of Mongolia by means of increasing the economic value of foreign relations and ensuring its unified policy planning and implementation. In addition, the Programme on Enhancing the Economic Value of Foreign Relations of Mongolia has been formulated to create an opportunity for rationalizing and developing tangible economic relations with foreign countries taking into consideration political and economic benefits from such relations as well as potential negative impact on the national security, in particular the economic security.

Two. Guiding Principles for Programme Implementation

2. The following principles shall guide the implementation of the Programme:
2.1. be based on the Comprehensive National Development Strategy based on MDGs, the National Security Concept, the Foreign Policy Concept and the Action Plan of the Government and the Regional Development Concept;
2.2.  uphold the principles of integrity, multi-pillar foundation, equality and mutual benefit of foreign political relations and economic cooperation;
2.3. take into account a country’s global competitiveness as a criterion for developing economic cooperation;
2.4. pursue the policy of balancing the economic interests of foreign countries in Mongolia;
2.5. ensure mutual benefit and transparency in economic, trade and investment agreement negotiations and project implementation.

Three. The Programme Goal

3. The goal of the Programme on Enhancing the Economic Orientation of Foreign Relations is to ensure economic benefits through the means of foreign relations.
4. The implementation of the Programme will result in an increased foreign policy contribution to the GDP growth in general and direct ways and a higher return on the Foreign Minister’s budget allocations.

Four. Objectives of the Programme

5. The following objectives shall be met to achieve the Programme goal:
5.1. increase foreign trade turnover, especially the exports of value-added goods;
5.2. promote foreign direct investment;
5.3. increase the return from bilateral and multilateral cooperation;  
5.4. ensure rational utilization of development loans and aid;
5.5. promote the country on the world market.

Five. Actions to be Taken within the Framework of Programme Objectives

6. The following actions will be taken in order to meet Programme objective 5.1:
6.1. pursue the national strategy to promote and diversify exports and improve competitiveness;
6.2. reduce tariff and non-tariff barriers in trade, benefit from GSP schemes, facilitate trade and create a system of trade financing;
6.3. conclude free trade and economic partnership agreements with trading partners;
6.4. mitigate the consequences caused by landlockedness and seek access to the sea.
7. The following actions will be taken in order to meet Programme objective 5.2:
7.1. give a priority to investment needed for production of finished goods with added value;
7.2. introduce and localize advanced technology and know-how;
7.3. develop production of import-substituting goods in food, agriculture and light industry sectors.
8. The following actions will be taken in order to meet Programme objective 5.3:
8.1. ensure effectiveness of intergovernmental and consultative meetings, business fora, and discussions and negotiations held during state and high-level official visits, and follow up agreed minutes;
8.2. conclude treaties and agreements in external economic fields;
8.3. join and ensure active participation in regional trade and economic integration;
8.4. actively participate in the activities  of the United Nations, its specialized agencies and the World Trade Organization and protect the interests of Mongolia.
9. The following actions will be taken in order to meet Programme objective 5.4:
9.1. allocate a majority of loans and aid to priority economic sectors;
9.2. train skilled workforce and promote investment in building high intellectual capacity;
9.3. continue the implementation of existing development projects and launch and fund new programmes and projects;
9.4. cooperate with international banking and financial organizations.
10. The following actions will be taken in order to meet Programme objective 5.5:
10.1. promote national brand products at foreign markets;
10.2. invent products with geographical indication;
10.3. participate in international fora, meetings, workshops, seminars and fairs.

Six. The Means to Ensure the Programme Implementation

11. Initiate projects and programmes which will contribute to the country’s economic development and attract investment for that purpose.
12. Conduct development studies and implement programmes and projects jointly with private sector, international organizations, banking and financial institutions, and like bodies.
13. Receive support from foreign investors, governmental and non-governmental organizations in the implementation of development projects.
14. Guide the foreign economic activities with unified policy.
15. Ensure effective use of bilateral cooperation mechanisms.

Seven. Duration, Management and Organization of the Programme

16. The Programme on Enhancing the Economic Orientation of Foreign Relations will be implemented from 2009 to 2012.
17. The Ministry of Foreign Affairs and Trade will supervise and coordinate the Programme implementation and provide the required professional and methodological guidance.
18. The location and staffing for diplomatic missions of Mongolia in foreign countries will be adjusted in line with current economic relations of Mongolia with other countries and their perspectives to contribute to national development goals.  

Eight. Financial Sources for the Programme Implementation and Its Funding

19. The Programme will be funded from the following sources:
19.1. state budget;
19.2. private sector investment;
19.3. foreign loan and aid.

Nine. Programme Assessment Criteria

20. The Programme will be assessed on the basis of the following criteria:
20.1. foreign trade turnover, particularly export growth;
20.2. increase of foreign investment inflow;
20.3. increase of employment by job number;
20.4. growth in per-capita GDP;
20.5. number of university graduates and professional workers trained in foreign countries and their work  occupancy status;
20.6.  degree of promotion and supply of national brand products to foreign markets;
20.7. growth in return on Foreign Minister’s budget allocations.
21. Assessment and conclusions by independent organizations and experts of the efficiency of development loan and aid and the state of introduction of foreign advanced technology will be used in evaluation of the Programme outcomes.