In the early 1990s, Mongolia introduced a series of
market economy reforms and privatization programs that
replaced a former socialist planning economy. The transition
was difficult, among other things. because the country's
foreign trade in the past was almost exclusively with the
Soviet Union and communist Eastern Europe. Since 1994, the
country has had poor economic progress, but the country is
still a poor developing country with a poorly developed
economy. Approximately nomadic animal husbandry is still the
most important trade route, but mining and industry are
becoming increasingly important for the country's economy.
countryaah, the country is completely dependent on receiving foreign
aid. The EU, the Asian Development Bank (ADB), the
International Monetary Fund (IMF), the World Bank and
various UN organizations as well as individual countries
such as the United States, Japan, Germany and the United
Kingdom provide both technical assistance for development
projects and pure financial assistance.
The country's biggest challenge is to reduce poverty.
Nearly 40% live below the publicly defined poverty line, and
most marked is in the capital Ulaanbaatar.
The land is rich in pasture, but relatively poor on
cultivable land. In total, approx. 80% of the land is used
as pasture. The Mongols have long traditions as nomadic
peoples, and have used the wide grasslands for breeding
sheep, goats, horses, camels, cattle and hunts. The company
has supplied the Mongols with meat and milk which are the
most important ingredients in the Mongolian diet. used for
clothing production. During the period of centralist
planning economics, livestock farming was organized in
cooperatives, but it was completely privatized in 1990. The
stocks are 11.9 million sheep, 9.7 million goats, 2.2
million horses, 1.1 million cattle (incl. jackets) and
285,500 camels (2001). The nomadic population is subject to
constant natural disasters that can hit their thugs hard. Eg.
caused severe drought in 1999, followed by strong cold with
great snow and cold in 2000, to over 7000 families losing
their entire livestock. In 1996, an exceptionally extensive
grass fire caused the death of 25 people and 7800 animals.
Later that year, more people drowned as torrential rains
created sudden floods while other parts of the country
suffered from drought.
Agriculture is hindered by a low fertile soil. Cultivated
land comprises less than 1% of the area. Cultivation of the
land in organized forms did not begin in Mongolia until
large state farms in the 20th century were established in
the central and northern part of the country around the
rivers Selenge, Orkhon and Kerulen (Kherlen). Cultivation of
new agricultural areas has largely had limited success.
Since 1991 most of the agriculture has been reorganized and
transformed into smaller private units. The most important
agricultural products are cereals, potatoes and vegetables.
Mongolia is completely dependent on imports of grain from
Almost 10% of the area is wooded, mainly in the mountain
areas in the north and west.
The country has several fishy lakes, but the commercial
catch of fish is negligible.
Mongolia is rich in natural resources. coal, copper,
fluorite, tungsten, tin, gold, lead and salt. At present,
natural resources are only partially utilized. At Erdenet,
large quantities of copper concentrate and molybdenum are
produced for export, which, however, are subject to constant
price changes on the world market. Mines at Baganuur and
Sharyn Gol, respectively, supply the two industrial centers
Ulaanbaatar and Darhan with coal power. Smaller quantities
of oil are extracted at Tamsag east of the country and
exported to China. Otherwise, gold and fluorite are
Despite a small energy grid, Mongolia has a high energy
consumption compared to the population and compared to other
Asian countries. The high energy consumption is caused by a
particularly energy-intensive industrial structure and the
cold climate. The country's wide and poor area means that
transport's share of total energy consumption is
particularly high. Coal is currently Mongolia's only
domestic power source. Oil refineries and hydropower plants
are under development, and wind turbines are planned in the
districts. In the countryside, traditional sources of energy
such as wood, roots and dried animal scraps are still used.
The industry is based on the processing of mineral
resources and agricultural products, and is concentrated in
the major cities of Ulaanbaatar, Erdenet, Darhan and
Choybalsan. Mongolia was a member of the Eastern European
cooperation organization Comecon 1961–91 and through this
received considerable help through credits and joint
ventures to build up the industry. Following the dissolution
of Comecon, the industry was severely hampered. The most
important industrial group is the smelter in Erdenet
(completed 1979). Other industries mainly comprise the
manufacture of textiles and clothing.
Tourism is little developed, and relatively few
foreigners visit the country. Most tourists come from Japan
and South Korea. The connection between the Russian
Trans-Siberian Railway and Beijing, which passes through
Mongolia, makes the country less isolated. The main
attractions are the landscape, wildlife, culture and
Transport and Communications
Transport is hampered by the great distances and the low
density of people. The railway network has a total length of
1815 km and connects the capital Ulaanbaatar with both the
Trans-Siberian railway in Russia and with the Chinese
railway network. From Darhan, side roads lead to the coal
mines at Sharyn Gol and the copper mines at the Erdenet, and
from Choybalsan a line leads to the Siberian grid. The
railway network has been developed in collaboration with the
former Soviet Union. The gauge is therefore the same as in
Russia, but different from the Chinese, which creates
problems for the country's foreign trade. The railways are
in total responsible for most of the freight transport,
while the majority of passenger traffic is by car and bus.
By the way, horses, oxen and camels are still widely used as
migratory and cloven animals. The nearest port city is
Tianjin in China (1400 km from the border), where part of
the port is set aside to serve Mongolia's foreign trade. The
country's total road network is 49,200 km, but only 2% is
paved and 13% gravel-covered. The rest consists almost
exclusively of terrain driven wheel tracks. International
airport can be found at Ulaanbaatar.
The foreign economy has for some time shown some large
deficits. Russia (oil and electric power), Japan, China and
South Korea are major suppliers of goods to Mongolia, while
China (copper) and the United States are the country's main
export markets. Minerals and metals (especially copper
concentrate) are the main export goods, making Mongolia very
dependent on commodity prices on the world market. Other
important export goods are livestock and meat, wool, fur,
hides and timber.
Imports include machinery, fuel and various industrial