BelCCI representative in Mongolia Leonid J. Slobodskiy: Mongolian market is interested in Belarusian technologies

№ 3, 2022


Leonid Jakovlevich, how long have you been a BelCCI representative? How could you characterize your work and the Belarus-Mongolia cooperation develop­ment in general? What makes you connected with Belarus?

I have been representing the Belarusian Chamber of Commerce and Industry in Mongolia since August 2015. My application for this post was not accidental – I have been doing business in Mongolia for more than 10 years, as ­Director General of United Belaz Machinery LLC, the official dealer of BELAZ OJSC. Besides, I am the Honorary Consul of the Republic of Belarus in Mongolia. Therefore, it can be said that I am related to all spheres of bilateral trade relations.

Speaking about my work over these years, I would note that our countries, just like the whole world, are actively changing. New external econo­mic conditions require new approaches of chambers of commerce and industry towards the consumers of their services – enterprises. The rules of work are becoming more complicated, maximally focused on consumers. We are clearly aware of the new trends. First, the dialogue between business and government is getting more and more qualitative. Secondly, on the one hand, positive competition among business associations as representatives of the interests of consumers and producers is growing; on the other hand, business associations join efforts and interact on the most important issues. Third, ­global foreign economic and value orientations of businessmen have changed. Many entrepreneurs used to focus primarily on the domestic market and often forgot about the importance of their products improvement. External markets dictate other conditions and require prompt response to the formation of demand.

Mongolia's wealth in natural resources goes beyond its mineral deposits. The country has a very strong agricultural base and over 67 million cattle heads, so there are significant opportunities for the processing of raw materials, especially animal products, both for domestic consumption and for export. Leather, wool, cashmere, milk and meat industries have great potential, but these areas need to be developed through a combination of support from the public sector and private initiative.

To make an example, the leather industry is working to increase its processing capacity, but the machines and technologies required are not available. Mongolia exports a huge amount of semi-finished products from animal skins to China and imports finished products from South Korea. Several companies have invested in and import high-tech equipment from deve­loped countries, but a joint strategy is needed, the development of each link in the value chain – from herders and slaughter­houses to animal skins wholesale markets and deep processing plants. In addition to small handicraft workshops, it is necessary to develop large-scale closed-cycle production.


The dairy industry is also ramping up production. Despite the large number of cows in Mongolia, the timely industrial collection of milk and its further processing is barely possible due to the territorial dispersion and remoteness of nomadic livestock breeders. Significant opportunities open up in the field of cashmere and wool production, provided that finished products are successfully promoted in the international market. In the meat industry, many companies are investing in technological upgrades. The Food and ­Agriculture Ministry is working to improve the technological level in livestock and animal care, as well as in all agriculture branches.

In all these areas, our main task and goal is to deliver all the necessary technologies from Belarus to Mongolia. But this work has some peculiarities.

Import of the equipment necessary for the production of innovative products is exempted by the Government of Mongolia from customs duties and value added tax, as well as the income gained from the sale of new innovative products, works and services in the domestic market. These benefits are valid for three years from the date of state registration and apply to the start-up companies specified in the Innovation Law. In addition, in accordance with the VAT Law, non-domestic raw materials and reagents necessary for the production of innovative goods in the domestic and foreign markets as part of innovative projects are exempt from value added tax.

At the same time, many special permits are required for selling products, which enterprises must obtain from various government agencies before starting operations. There are too many procedures, control, checks; business is largely dependent on the government and political parties. This is probably the reason why Mongolia's cross-border trade is currently quite low.

Therefore, I believe that the work of business associations as an intermediate link between business and government should be aimed at promoting deeper dialogue development, recognizing the interests of business circles, in particular the private sector, government agencies, and reducing the negative impact. Then it will be possible to talk about establishing full-scale co­operation with foreign partners, in particular, with Belarusian companies that have much to offer the local market.

What are your activities to promote the interests of Belarusian entrepreneurs in Mongolia?

08_06_95.jpgInteracting with the mining companies of Mongolia, I'm constantly promoting the equipment produced by BELAZ OJSC. My company, United Belaz Machinery (UBM), is actively involved in the creation of the technical park of the state company Erdenes Tavan Tolgoi, taking part in all tenders for the purchase of mining equipment, spare parts and dump trucks consumables.

In December 2021, a contract worth 5.2 million US dollars was signed with the ­Mongolian Railway for the supply of 30 ­Belarusian gondola cars of the ­Mogilev Carriage Works and 70 container yards of the Osipovichi ­Transport Engineering Plant. UBM finances the preparation of design documentation, and the production in the shortest possible time of a prototype of a universal gondola car for the transportation of containers and bulk cargo is being discussed with the Osipovichi manufacturer. The presentation of a universal gondola car, the need for which in Mongolia is at least 600 units per year, is planned for the third quarter of 2022.

What fields or spheres do you find the most promising for the further expansion of the Mongolian businesses' cooperation with Belarus? What experience can companies in both countries share?

First, agriculture. The agricultural sector, one of the oldest industries in Mongolia, has always been and remains an integral part of the country's long-term development strategy. Production levels and overall food quality are improving across the sector, and exports are growing rapidly. Most of the people in Mongolia are somehow connected with cattle breeding or agriculture. Although rural-urban migration is expected to boost in the coming years, a large amount of the population is likely to continue being engaged in agricultural activities, primarily livestock breeding. In this regard, local consu­mers need the equipment and technologies that Belarusian partners can offer.

The second promising direction is engineering. Mongolia is rich in natural resources. Mining products account for about 90 percent of total exports, which indicates a direct dependence of the economy on exports in this area. Due to such pattern of overseas supplies, the Mongolian economy is highly vulnerable to external shocks. It is necessary to introduce technologies for deep processing of minerals in the country with the involvement of scientific and technical solutions of ­Belarusian scientists and practitioners.

Besides, Mongolian consumers remain interested in the supply of Belarusian powdered milk and plastic containers used for industrial purposes, as well as in synthetic fibers, medicines, food, furniture and footwear.

Are there any initiatives and bilate­ral activities being implemented or planned in order to advance bilateral business contacts? How has the pandemic and other recent challenges affected business interaction?

Work is underway to establish close economic ties with the aimags (regions) of Mongolia. In particular, in Bulgan aimag, a plan is currently being developed on our initiative for the comprehensive cleaning of forests with the help of Belarusian specialists and Amkodor equipment, followed by planting young trees seedlings in the cleared areas. This project will be put into practice in 2022–2023. The estimated cost of Amkodor equipment for this project will be at least 12 million US dollars.

Together with the BELAZ OJSC dealer company, we are negotiating with the Mayor's office of Ulaanbaatar on the supply of the BKM Holding electric buses and the utility vehicles manufactured by MAZ JSC. At the moment, an agreement has been reached on the supply of 12 garbage trucks based on MAZ equipment for the city needs.

Besides, the interaction with the ­National Chamber of Commerce and Industry of Mongolia, aimed at intensifying bilateral trade and economic cooperation, restoring contacts and overcoming the consequences of the pandemic, deserves special mention.

During 2021, the Government of ­Mongolia imposed quarantines seven times, for a period from 14 to 60 days, during which the activities of most enterprises were suspended. Trade and services sectors, as well as the mining industry, were most affected by such tough measures. One of the main factors that influenced the suspension of mining companies was the China's closing of customs crossings.

As part of my work as the BelCCI representative, I plan to organize a discussion platform with the Mongolian business community in cooperation with the Belarusian Chamber of Commerce and Industry and the National Chamber of Mongolia. This platform is supposed to operate on an ongoing basis. Besides, our plans include the development of the concept and the start of practical activities of the bilateral Belarusian-Mongolian Chamber of Commerce and Industry.

To sum it up, could you, please, tell us, what are the opportunities for Belarusian companies in the Mongolian market? What should Belarusian entrepreneurs keep in mind first of all?

Taking into account the convenient strategic position of Mongolia between Russia and China, the need of its econo­my for mining and construction machinery, as well as the desire to increase agricultural potential and improve food security, there is an opportunity for the Belarusian business representatives to build successful long-term cooperation in certain trade niches, as well as to set up joint production and implement investment projects.


As far as trade is concerned, the increased export of high-tech goods and services seems the priority for Belarus in the Mongolian direction in the near future. At the same time, taking into account the specifics of the market (the continuing shortage of local enterprises' resources and budge­tary savings), it seems appropriate to recom­mend that companies planning to enter the Mongolian market consider options for financing exports and the schemes providing for the maximum possible deferment and installment payment.

Speaking about general tariff and non-tariff measures applied to foreign partners, I would like to emphasize that Mongolia has two types of import customs tariffs: the most favorable and general (twice as high). The most favorable tariff implies for the rates of import customs duties on the goods coming from the states to which Mongolia grants the most favored nation regime in trade and political relations. The Republic of Belarus is included in the list of such countries.

As a rule, to apply preferential treatment, it is necessary to confirm the origin of goods. In addition, when delivering goods to Mongolia, it is necessary to provide quality and safety certificates. For certain types of goods (raw materials and products of animal and vegetable origin, cigarettes, medicines, genetically modified raw materials and products from it, plants), standard vete­rinary and/or phytosanitary control is carried out. When importing certain commodity items, excise tax may be levied: for example, on alcohol and tobacco products, fuel and cars.

As for investment projects: being rich in natural resources, having vast agricultural opportunities and being close to major Asian markets, Mongolia can become a favorable country for medium and long-term foreign direct investment, including from Belarus. The advantages of the country's investment climate are as follows:

developing and growing market;

mineral resource base that can be used for value-added processing;

developing industry and infrastructure;

location between two large economies – Russia and China;

young, highly educated population;

public-private partnership and infrastructure modernization;

rule of law and legislation;

provision of tax and non-tax guarantees for investors;

ambitious large projects;

a thriving telecommunications and information technology sector.

Thus, cooperation between the two countries has huge potential, and I see the task of chambers of commerce and industry and their representatives in creating favourable conditions for direct contacts between business circles, lobbying their interests in state bodies, which would eventually lead to trade turnover increase and new projects.