MongoliaAugust 2012 | Risk Summary
The potential for more opaque bidding rounds for mining exploration projects, as a result of a new law on foreign investment in sectors of strategic importance, could hurt Mongolia’s investment appeal. With a new government coming into office, and junior coalition members already signalling their intent to also renegotiate the terms of existing agreements with foreign mining firms, foreign investors may increasingly opt to reduce their exposure due to increasing policy risk in the country. Moreover, the political dimension to the new law on foreign investment also suggests a strong bias against excessive influence by Chinese firms in the economy. This could lead to key stakeholders in Mongolia's economy being turned away from investing in the country, placing considerable pressure on the balance of payments.
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