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.
According to 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 abroad.
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 extracted.
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 historical monuments.
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 products.