Free Trade Areas

International Workshop on
Free Trade Areas in Mongolia and the Engagement of Neighboring Countries
held. 20 August 2003

In accordance with the action plan of the Project 'Role of Mongolia for Peaceful and Stable Development of Northeast Asia, ” an international workshop on topic 'Free Trade Areas in Mongolia and the Engagement of Neighboring Countries' was held on 20 August 2003 in Ulaanbaatar, Mongolia. The Workshop was held in the conference room of Ulaanbaatar hotel.

More than 40 scholars and government officials from Mongolia , China , Japan , Kazakhstan , South Korea , and Russia participated in the workshop and discussed key issues of the development of special economic zones in these countries with concentration on Mongolian case. In addition, three papers on poverty issues had been presented and discussed. After welcoming speeches, a keynote speech titled 'A Harbinger of Marketization? Special Economic Zones in North Korea' was delivered by Professor Yoon Suk Bum , Yonsei University, South Korea. He analysed current situation of the North Korean economy, economic policy development during last years and presented results of his study of special economic zones in North Korea.

One of his important conclusions was that with growing regionalism in the world, the East Asian economies should be substantially integrated and there was a need to achieve free trade and economic cooperation and eliminate various barriers, especially, in case of less developed economies of the region like North Korea and Mongolia and in this respect, initiatives from China, Japan and South Korea were crucially important. Professor Yoon Suk Bum also concluded that currently, short term impact of the Special Economic Zones in North Korea on the East Asian economies was insignificant.

Mr.Erdenebat, Director of Altanbulag Free Trade Zone in Mongolia presented a paper titled 'Policy Issues of Development of Free Economic and Trade Areas in Mongolia'. He described policy and practical steps of the Mongolian government on free economic zones to establish free economic zones and the present situation of the first free trade zone in Mongolia - Altanbulag that has been recently established. He also pointed out difficulties and challenges of the new free trade zone. His paper was interesting to many participants, especially for foriegn scholars being as a live case for analyses.

The next paper was presented by Professor Magbat Spanov , President, Institute for Development, Kazakhstan. Prof. Spanov outlined positive roles of special economic zones on economic and social development of the former socialist countries and focused on experience of Kazakhstan in establishing and developing of special economic zones. Participants of the workshop were particularly interested in Professor Spanov's analysis of unsuccessful attempts of Kazakhstan to establish special economic zones in early 1990s.

Professor Zhang Junkuo's presentation was very interesting for participants, especially for Mongolian government officials due to its detailed information of special economic zones in China and their development experiences. In his paper, Professor Zhang Junkuo, who is Senior Researcher in Development Research Center of the State Council of China, analysed positive and negative roles of special zones in economic development by seven categories. The categories were developed in China, namely, Special Economic Zone, Economic and Technological Development Zone, Hi-Tech Industrial Development Zone, Free Trade Zone, Export Processing Zone, Border Economic Cooperative Area and Taiwanese Investment Zone.

Mr.Enebish, Chief Specialist of Ministry of Finance and Economy, Mongolia, outlined Mongolian government policy on regional development. In his paper titled 'Perspectives of Regional Development in Mongolia,' Mr. Enebish developed views of regionalism and presented estimations of potentials and perspectives of four regions of Mongolia officially adopted by the Parliament.

Ms.Nergui, Ministry of Infrastructure of Mongolia, gave detailed information of Altanbulag Free Trade Zone and investment calculations needed for infrastructure development in this zone. The Parliament (Ih Hural) of Mongolia issued “Resolution on Creating of Altanbulag Free Trade Zone” in June, 2002 and legitimized its decision to create the first free economic zone in Mongolia . The Governor of Altanbulag FTZ has appointed that the administration unit has already been organized. The Master Plan of the zone has been developed and was being discussed at Ministries level. Preliminary calculations in the Master Plan showed that turnover of trade operations in Altanbulag FTZ should reach about 300 million USD by 2020.

In brief, free trade area-related issues including possiblities of development of free trade zones in Mongolia and neighboring countries were mainly discussed in the abovementioned papers.

'Chinese Experience on Poverty Allevation' delivered by Professor Zhang Junkuo opened the next discussion on poverty. Two scholars from Japan, namely Professor Sumio Kuribayashi and Professor Hara Akira from Tokyo International University presented papers 'On the Regional GDP Distribution and Poverty Issues in Mongolia' and 'Poverty Issues in Japan, Historical Perspective.' Mongolian participants highlighted the importance of this issue for Mongolia and the papers were as a valuable source for them in learning from Japanese experience and research methodology.

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