Following the announcement of ICT as one of the key sectors of the Mongolian economy, Tara Neal, Executive Editor of The Fast Mode recently spoke to Bolor-Erdene Battsengel, the State Secretary of the newly established Ministry of Digital Development of Mongolia on the impact of emerging technologies on the Mongolian economy, what Mongolia offers to startups and investors in the region, as well as the country's positioning as an economic and technology hub in APAC.
Tara: How will technology drive Mongolia's economy in years to come?
Bolor: In order to talk about how technology will drive Mongolia's economy in the coming years, we need to start from the point of view of whether we are ready for change and how we are preparing the ground.
The Government of Mongolia is showing leadership on this very issue, and, for the first time, it has announced ICT as one of the leading sectors of the economy, aiming for the country to become a “Digital Nation”.
To prepare the ground, we have identified structural changes, legal reforms, and new laws, as well as our policies for the next five years. Let me briefly explain what exactly we did on each one.
- To accelerate Mongolia's digital transformation, we have made major structural changes. For example, in 2020, the Standing Committee on Innovation and Digital Policy was established within Parliament. In 2022, the Ministry of Digital Development and Communications was established by the Government. In the same year, the “e-Mongolia Academy” has been established to digitalize public services, develop the main subsystems of e-government, and improve digital skills for civil servants and for all. Those are the main structural changes.
- In addition, the fundamental laws of digital transformation have been approved by the Parliament of Mongolia in December 2021. These laws consist of Law on Public Information and Transparency, Law on Digital Signatures, Law on Cyber Security, Law on Personal Data Protection.
- In terms of policy and the goal to become a Digital Nation, a medium-term policy document for 2022-2027 was approved by the Government of Mongolia. This policy document states six main goals around Digital infrastructure, e-Governance, Cybersecurity, Digital Literacy, Innovation and Production, and National Development Accelerator. Many projects are being implemented to achieve this Digital Nation policy, including the e-Mongolia project. Of course, this policy is expected to support Mongolia's digital economy by implementing these six pillars.
Tara: What will be the positive impact of blockchain technology on today's industries?
Bolor: Blockchain is one of the most promising technology for industries. It makes things transparent, democratic, decentralized, efficient, and secure.
We intend to introduce blockchain technology in all fields in our country. Sector such as mining, banking, and public services are the initial focus of blockchain technology in Mongolia. For example, the mining company (Erdenes Oyu Tolgoi LLC, EOT/ETT) can provide data provenance with clarity, transparency, and traceability to its end customers by adopting blockchain.
There are many processes, such as extracting, processing, transporting, and selling raw materials in the mining industry. The introduction of blockchain technology will improve the supply chain management of these processes, giving all stakeholders control over the supply chain.
In the financial industry, people often think of blockchain as cryptocurrency. However, in the field of banking and finance, blockchain technology can also be used to quickly deliver banking services to end users.
By adopting blockchain in the banking sector, transactions could be extremely fast, processing fees could be minimal, and recorded data could be immutable.
In terms of governance, governments can use blockchain technology to eliminate corruption and bureaucracy by increasing transparency. In addition, this technology can create conditions for the transparency of government activities, budget spending, election process and results to be open to the public. In addition to the above possibilities, blockchain technology can be used for all kinds of public services related to registrations, such as university registrations, property, intellectual property, state, health, etc.
Tara: What economic opportunities can blockchain spur?
Bolor: In developing countries like Mongolia, this technology offers a solution to combat bribery, bureaucracy, and corruption to improve transparency between the government and civil society, to reduce multi-level operations and inefficiencies of government institutions, and use it as an accelerator for development, which could be a great opportunity.
By increasing the use of blockchain technology, the speed, quality, and availability of services in all sectors will improve. Optimal solutions for end-users will be certified, further developing the conditions for Mongolia's digital economy.
Tara: What is Mongolia's value proposition in attracting blockchain investments?
Bolor: By the end of 2021, Mongolia adopted the Law on Virtual Asset Service Providers. We are ensuring that the legal framework for regulating cryptocurrency in the financial sector has been formed. In 2020-2021, about 600,000 people participated in the cryptocurrency market in Mongolia, which shows that the understanding of blockchain technology and cryptocurrency is spreading rapidly among the population. Investors from America, Australia, Korea, and Singapore cooperate with Mongolian companies in this market.
Of course, blockchain technology is a concept that applies to other industries besides cryptocurrency, so there is a vast opportunity to attract investors in our country's industries such as mining, agriculture, banking, transportation, logistics, health, and education. As a developing country, there are many problems that need to be solved in these sectors, so we believe that technology companies and startup businesses can offer optimal solutions based on blockchain technology to solve these problems, and this is an opportunity for investors to support and help further develop these solutions.
Tara: What benefits does Mongolia offer to startups?
Bolor: Many technology experts and digital nomads come to Mongolia and say it is a hidden gem for tech in Asia. We have many talented software engineers and an environment that allows them to think outside of the box.
In general, the principle that we adhere to, especially for information technology companies, is that the absence of any legal regulations gives us the opportunity to compete freely, think freely, and do our business freely. For example, we do not require any special license to run a startup business based on new modern technologies. Others are free to do so, as long as they are not related in any way to the telecommunications business, such as the use of telecommunications numbering and radio frequencies.
On the other hand, the government participates in the innovation ecosystem through tax regulation. Therefore, we are working to build a legal framework for the creation of a tax-free zone for startup businesses. If this law is passed, startups will pay a separate, smaller tax. Also, in order to learn from the good experience of Estonia, we are studying the issue of e-residence.
Tara: What are your strategies to position Mongolia as an economic and technology hub in APAC?
Bolor: In general, Mongolia actively works as a member of international organizations in the field of telecommunications, and actively participates in the activities organized by those organizations as a member state. For example, Universal Postal Union (UPU), International Telecommunication Union (ITU), Asia-Pacific Telecommunity (APT), Asia-Pacific Space Cooperation Organization (APSCOO) and etc.
We also actively participate in the events of specialized organizations of the United Nations. Further participation in the operation of technological and economic hubs in the Asia-Pacific countries is fully compatible with the policies and strategies of our ministry and the laws of Mongolia, so we are ready to cooperate without objection.
-- END --
Bolor-Erdene Battsengel is the State Secretary of the newly established Ministry of Digital Development of Mongolia, and Acting Minister. Battsengel is the youngest and first female to hold this position. Her current responsibility is to lead and oversee all the activities within the Ministry. She has crafted the four-year plan to transform Mongolia into a Digital Nation. Battsengel studied public policy at Oxford University and previously worked at the World Bank, United Nations, Asian Development Bank, and Cabinet Office of the United Kingdom. She was recently selected as one of TIME Magazine’s Next Generation Leaders, Forbes Asia 30 Under 30, and Young Global Leader of the World Economic Forum.
