Economic Diversification of Mongolia: The Two-pronged Foreign Investment Promotion

This paper analyzes the role and significance of foreign investment promotion in light of the obvious potential impacts of foreign direct and portfolio investments in achieving the Mongolia’s national economic policy objective titled as the “economic diversification strategy” and assesses the implications for foreign investment promotion of Mongolia. The two-pronged approaches to foreign investment promotion are proposed that do not require the researchers, policy makers and practitioners to make an absolute distinction, but rather consider both the direct and portfolio influences on the country’s economic development. Since foreign investment promotion can often be quite complex in nature, the two-pronged approach will allow researchers and practitioners to apply the simultaneous promotion of foreign direct and foreign portfolio investors to allow comprehensive analysis of the economic impacts of these investments.