Mongolian Minging Sector Drawing Foreigh Direct Investment

Globalization of the World Economy today inquires countries to use their advantages in other to retain their sustainable economic development in an increasingly open, integrated, and borderless international economy and to develop their own production processes which are considered to be main foundation of the steady development and also main exist to the world's global economic system.However, there are no countries developed based only on their own possibilities, namely on natural resources. The natural resources of course are a one of main foundations, but apart from that they need huge investment for obtaining highly advanced technique, technology for processing of the natural resources in order to produce competing in the world final products. In this case FDI was one of main driving forces for many Developed countries, developing countries, and asian developed countries to fill that gapes.FDI not only directly increases the governmental budget but also has many indirect benefits such as establishment of new managements and advanced technologies in different sphere of a economy which amplifies employment rates, exports and productivity of the service industries etc. So far all these positive aspects of the FDI usually bring to increased GDP and improved trade balances in general. Although the Mongolia is one of the richest countries in term of the natural resources, in present poor developed mining industries, infrastructures and water scarcity in desert area where the biggest ore deposits are located have been negatively affecting on attracting foreign investment. Before transition into market economy, foreign aid, loan and investment of Mongolia limited to few countries such as Russia and other socialist countries. Due to great complexity encountered to the socialist economic system during market transitional period, aid, loan and investment getting from other countries practically stopped. It was one of major motivation of the Mongolian government to set up the foreign investment friendly legal environment to attract investors. Examples of that is first ever approve of the FDI in 1993 and several following amendment to that. Although, legal environment and natural resources of country attract developed countries such as USA, China, Canada and Russia in term of the investment, now Mongolia is facing to problems with setting uo improved legal investment environment in order to bring FDI to play important role in economic development or our country.