Economic activity in Mongolia has traditionally been based on agriculture and livestock. Mongolia also has extensive mineral deposits: copper, coal, molybdenum, tin, tungsten, and gold account for a large part of industrial production. Soviet assistance, at its height one-third of Gross domestic product (GDP), disappeared almost overnight in 1990–91, at the time of the Collapse of the Soviet Union. Mongolia was driven into deep recession. Reform has been held back by the ex-communist MPRP opposition and by the political instability brought about through four successive governments under the DUC. Economic growth picked up in 1997–99 after stalling in 1996 due to a series of natural disasters and increases in world prices of copper and cashmere. Public revenues and exports collapsed in 1998 and 1999 due to the repercussions of the Asian financial crisis. In August and September 1999, the economy suffered from a temporary Russian ban on exports of oil and oil products. Mongolia joined the World Trade Organization (WTO) in 1997. The international donor community pledged over $300 million per year at the last Consultative Group Meeting, held in Ulaanbaatar in June 1999. Recently, the Mongolian economy has grown at a fast pace due to an increase in mining and Mongolia attained a GDP growth rate of 11.7% in 2013. However, because much of this growth is export-based, Mongolia is suffering from the global slowdown in mining caused by decreased growth in China.
|Economy of Mongolia|
|Currency||1 tögrög (MNT) = 100 möngö|
|WTO, IMF, World Bank, ADB, SCO (Observer)|
|GDP||$13.038 billion (nominal, 2018 est.) $43.544 billion (PPP, 2018 est.)|
|GDP rank||130th (nominal, 2018) 111th (PPP, 2018)|
|1.4% (2016) 5.4% (2017) 5.9% (2018e) 6.6% (2019f) |
GDP per capita
|$4,026 (nominal, 2018 est.) $13,446 (PPP, 2018 est.)|
GDP per capita rank
|113th (nominal, 2018) 91st (PPP, 2018)|
GDP by sector
|agriculture: 12.1% industry: 38.2% services: 49.7% (2017 est.)|
|8.4% (2019f est.) 7.6% (2018 est.) 4.6% (2017)|
Population below poverty line
|29.6% (2016 est.)|
|34 medium (2017)|
|0.741 high (2017) (92nd)|
Labor force by occupation
|agriculture: 31.1% industry: 18.5% services: 50.5% (2016)|
|Unemployment||8% (2017 est.)|
|construction and construction materials, mining (coal, copper, molybdenum, fluorspar, tin, tungsten, and gold), oil, food and beverages, processing of animal products, cashmere wool and natural fiber manufacturing|
|Exports||$5.834 billion (2017 est.)|
|copper, apparel, livestock, animal products, cashmere, wool, hides, fluorspar, other nonferrous metals, coal, crude oil|
Main export partners
| China 85% |
United Kingdom 10.7% (2017)
|Imports||$4.345 billion (2017 est.)|
|machinery and equipment, fuel, cars, food products, industrial consumer goods, chemicals, building materials, cigarettes and tobacco, appliances, soap and detergent|
Main import partners
| China 32.6% |
United States 4.8% South Korea 4.6% (2017)
|$18.02 billion (31 December 2017 est.) Abroad: $495 million (31 December 2017 est.)|
|−$1.155 billion (2017 est.)|
Gross external debt
|$25.33 billion (31 December 2017 est.)|
|91.4% of GDP (2017 est.)|
|−6.4% (of GDP) (2017 est.)|
|Revenues||2.967 billion (2017 est.)|
|Expenses||3.681 billion (2017 est.)|
|Economic aid||$185.94 million (2008)|
|Standard & Poor's:|
BB (T&C Assessment)
|$3.016 billion (31 December 2017 est.)|
The rapid political changes of 1990–91 marked the beginning of Mongolia's efforts to develop a market economy, but these efforts have been complicated and disrupted by the dissolution and continuing deterioration of the economy of the former Soviet Union. Prior to 1991, 80% of Mongolia's trade was with the former Soviet Union, and 15% was with other Council for Mutual Economic Assistance (CMEA) countries. Mongolia was heavily dependent upon the former Soviet Union for fuel, medicine, and spare parts for its factories and power plants.
The former Soviet Union served as the primary market for Mongolian industry. In the 1980s, Mongolia's industrial sector became increasingly important. By 1989, it accounted for an estimated 34% of material products, compared to 18% from agriculture. However, minerals, animals, and animal-derived products still constitute a large proportion of the country's exports. Principal imports included machinery, petroleum, cloth, and building materials.
In the late 1980s, the government began to improve links with non-communist Asia and the West, and tourism in Mongolia developed. As of 1 January 1991, Mongolia and the former Soviet Union agreed to conduct bilateral trade in hard currency at world prices.
Despite its external trade difficulties, Mongolia has continued to press ahead with reform. Privatization of small shops and enterprises has largely been completed in the 1990s, and most prices have been freed. Privatization of large state enterprises has begun. Tax reforms also have begun, and the barter and official exchange rates were unified in late 1991.
Between 1990 and 1993, Mongolia suffered triple-digit inflation, rising unemployment, shortages of basic goods, and food rationing. During that period, economic output contracted by one-third. As market reforms and private enterprise took hold, economic growth began again in 1994–95. Unfortunately, since this growth was fueled in part by over-allocation of bank credit, especially to the remaining state-owned enterprises, economic growth was accompanied by a severe weakening of the banking sector. GDP grew by about 6% in 1995, thanks to largely to a boom in copper prices. Average real economic growth leveled off to about 3.5% in 1996–99 due to the Asian financial crisis, the 1998 Russian financial crisis, and worsening commodity prices, especially copper and gold.
Mongolia's gross domestic product (GDP) growth fell from 3.2% in 1999 to 1.3% in 2000. The decline can be attributed to the loss of 2.4 million livestock in bad weather and natural disasters in 2000. Prospects for development outside the traditional reliance on nomadic, livestock-based agriculture are constrained by Mongolia's landlocked location and lack of basic infrastructure. Since 1990, more than 1,500 foreign companies from 61 countries have invested a total of $338.3 million in Mongolia. By 2003 private companies made up 70% of Mongolian GDP and 80% of exports.
Until recently, there have been a very few restrictions on foreign investments during most of Mongolia's post-socialist period. Consequently, mining industry's contribution to FDI increased to almost 25% in 1999 from zero in 1990.
Mongolia’s reliance on trade with China meant that the worldwide financial crisis hit hard, severely stunting the growth of its economy. With the sharp decrease in metal prices, especially copper (down 65% from July 2008-February 2009), exports of its raw materials withered and by 2009 the stock market MSE Top-20 registered an all-time low since its dramatic spike in mid-2007. Just as the economy started to recover, Mongolia was hit by a Zud over the winter period of 2009-2010, causing many livestock to perish and thus severely affecting cashmere production which accounts for a further 7% of the country’s export revenues.
According to the World Bank and International Monetary Fund estimates, real GDP growth reduced from 8% to 2.7% in 2009, and exports shrunk 26% from $2.5Bn to $1.9Bn before a promisingly steady increase up until 2008. Because of this, it was projected that between 20,000 and 40,000 fewer Mongolians (0.7% and 1.4% of the population respectively) will be lifted out of poverty, than would have been the case without the global financial crisis.
In late 2009 and the beginning of 2010, however, the market has begun to recover once again. Having identified and learnt from its previous economic instabilities, legislative reform and a tightened fiscal policy promises to guide the country onwards and upwards. In February 2010, foreign assets were recorded at USD1,569,449 million. New trade agreements are being formed and foreign investors are keeping a close eye on the "Asian Wolf".
Mining is the principal industrial activity in Mongolia, making up 30% of all Mongolian industry. Another important industry is the production of cashmere. Mongolia is the world's second largest producer of cashmere, with the main company, Gobi Cashmere, accounting for 21% of world cashmere production as of 2006.
The term was coined by Ganhuyag Chuluun Hutagt and subsequently popularized by Renaissance Capital in their report "Mongolia: "Blue-sky opportunity". They state that Mongolia is set to become the new Asian tiger, or "Mongolian wolf" as they prefer to call it, and predict "unstoppable" economic growth. With the recent developments in the mining industry and foreign interest increasing at an astonishing rate, it is claimed that the 'Wolf Economy' looks ready to pounce. The term's aggressive title mirrors the country’s attitude in the capital markets, and with newfound mineral prospects it has the chance to retain its title as one of the world's fastest growing economies.
The banking sector is highly concentrated, with five banks controlling about 80% of financial assets as of 2015:
In terms of access to credit, Mongolia ranked 61st out of 189 economies in accordance with 2015 Ease of Doing Business survey. However, Mongolia had one of the highest banking branch penetration rates in the world at 1 bank branch per 15,257 residents as of May 2015.
With a strengthening capital market environment, many foreign and local investment institutions have begun to establish themselves in Mongolia. The most prominent local agencies include: Eurasia Capital, Monet Investment Bank, BDSec, MICC, and Frontier Securities.
As a result of rapid urbanization and industrial growth policies under the communist regime, Mongolia's deteriorating environment has become a major concern. The burning of soft coal coupled with thousands of factories in Ulaanbaatar and a sharp increase in individual motorization has resulted in severe air pollution. Deforestation, overgrazed pastures, and, less recently, efforts to increase grain and hay production by plowing up more virgin land have increased soil erosion from wind and rain.
The following table shows the main economic indicators in 1990–2017.
|GDP in $
|7.42 Bln.||7.25 Bln.||9.02 Bln.||13.97 Bln.||15.57 Bln.||17.39 Bln.||19.12 Bln.||18.86 Bln.||20.49 Bln.||24.53 Bln.||28.06 Bln.||31.83 Bln.||34.96 Bln.||36.18 Bln.||37.09 Bln.||39.70 Bln.|
|GDP per capita in $
|−2.5 %||6.4 %||1.1 %||6.5 %||8.2 %||8.8 %||7.8 %||−2.1 %||7.3 %||17.3 %||12,3 %||11.6 %||7.9 %||2.4 %||1.2 %||5.1 %|
|...||63.4 %||11.6 %||12.5 %||4.5 %||2.1 %||2.8 %||6.3 %||12.2 %||7.7 %||15.9 %||8.6 %||12.9 %||5.9 %||0.6 %||4.6 %|
Household income or consumption by percentage share:
Distribution of family income - Gini index: 40 (2000)
Industries: construction and construction materials; mining (coal, copper, molybdenum, fluorspar, and gold); food and beverages; processing of animal products, cashmere and natural fiber manufacturing
Industrial production growth rate: 6% (2010 est.)
Electricity - production by source:
Exports - commodities: copper, apparel, livestock, animal products, cashmere, wool, hides, fluorspar, other nonferrous metals
Exchange rates: tögrögs/tugriks per US dollar: 1890 (2014), 1396 (2012), 1,420 (2009), 1,179.6 (2006), 1,205 (2005), 1,187.17 (2004), 1,171 (2003), 1,110.31 (2002), 1,097.7 (2001), 1,076.67 (2000)
On the eve of the 1921 revolution, Mongolia had an underdeveloped, stagnant economy based on nomadic animal husbandry. Farming and industry were almost nonexistent; transportation and communications were primitive; banking, services, and trade were almost exclusively in the hands of Chinese or other foreigners. Most of the people were illiterate nomadic herders, and a large part of the male labour force lived in the monasteries, contributing little to the economy. Property in the form of livestock was owned primarily by aristocrats and monasteries; ownership of the remaining sectors of the economy was dominated by Chinese or other foreigners. Mongolia's new rulers thus were faced with a daunting task in building a modern, socialist economy.Energy in Mongolia
Mongolia had a total primary energy supply (TPES) of 3.94 Mtoe in 2012. Electricity consumption was 4.49 TWh.
Mongolia is a big producer of coal, which is mostly exported. Domestic consumption of coal accounts for about two thirds (66%) of Mongolia's primary energy and is the almost sole source of electricity, accounting for almost 95% of the domestic electricity production.Index of Mongolia-related articles
Articles (arranged alphabetically) related to Mongolia include:
Individual administrative districts are listed in Sums of Mongolia.List of regions of Mongolia by Human Development Index
This is a list of regions of Mongolia by Human Development Index as of 2018 with data for the year 2017.Mining in Mongolia
Mining is important to the national economy of Mongolia. Coal, copper, and gold are the principal reserves mined in Mongolia. Several gold mines are located about 110 kilometres (68 mi) north of Ulaanbaatar, such as Boroo Gold Mine and Gatsuurt Gold Mine. Khotgor Coal Mine is an open-pit coal mining site about 120 kilometres (75 mi) west of Ulaangom. Ömnögovi Province in the south of Mongolia is home to large scale mining projects such as the Tavan Tolgoi coal mine and the Oyu Tolgoi copper mine. Oyu Tolgoi mine is reported to have the potential to boost the national economy by a third but is subject to dispute over how the profits should be shared. The International Monetary Fund (IMF) has estimated that 71 percent of the income from the mine would go to Mongolia.Mongolia Energy Corporation, a mining and energy company operating in Mongolia and Xinjiang and Erdenet Mining Corporation, a joint Mongolian-Russian venture, account for a large percentage of the mining in the country, but Anglo-American companies such as Rio Tinto and Canadian companies such as Turquoise Hill Resources are active in the country and have agreements with the government. The government institution responsible for overseeing mining development in the country is the Mineral Resource Authority of Mongolia (MRAM).Mongol securities exchange
Mongol Securities Exchange (MSX) was established on 1 May 2015. MSX has acquired trading and clearing licences from Financial Regulatory Committee of Mongolia on 3 July 2015.
The exchange has updated its rules and regulations on 22 November 2016, namely listing, membership, trading and clearing rules. MSX has 6 departments and over 20 staff.Mongolia Economic Forum
“The Mongolian Economic Forum” is a NON-PROFIT, NON-POLITICAL and non-governmental organization that was founded in 2010. The founders of the organization are: P. Tsagaan, D. Jargalsaikhan, S. Batbold, D. Zorigt, S. Bayartsogt, Ch. Saikhanbileg, D. Enkhbat, S. Oyun, Ch. Gankhuyag, Yo. Otgonbayar, G. Zandanshatar, Ch. Khashchuluun, and D. Tsogtbaatar.
The main mission of the forum is to identify policies that promote sustainable development for Mongolia and to generate dialogue amongst leaders such as policy makers, businessmen, scientists, and civil organizations, so that they can reach a consensus on the controversial issues surrounding strategic industries.Mongolia and the World Bank
The World Bank has funded educational efforts in Mongolia since 2006, focusing on improving educational resources in rural areas.Mongolian tögrög
The tögrög or tugrik (Mongolian: ᠲᠥᠭᠥᠷᠢᠭ, төгрөг, tögrög; sign: ₮; code: MNT) is the official currency of Mongolia. It was historically subdivided into 100 möngö (мөнгө). Currently, the lowest denomination in regular use is the 10-tögrög note and the highest is the 20,000-tögrög note. In unicode, the currency sign is U+20AE ₮ TUGRIK SIGN.
In 2010, the tögrög rose 15% against the dollar, due to the growth of the mining industry in Mongolia.
However, its exchange rate eroded by 24% from early 2013 to June 2014 due to falling foreign investment and mining revenue.Outline of Mongolia
The following outline is provided as an overview of and topical guide to Mongolia:
Mongolia – landlocked sovereign country located in East-Central Asia. It borders Russia to the north and China to the south. Ulaanbaatar, the capital and largest city, is home to about 38% of the population.
At 1,564,116 square kilometres, Mongolia is the nineteenth largest, and the most sparsely populated independent country in the world with a population of around 2.9 million people. It is also the world's second-largest landlocked country after Kazakhstan. The country contains very little arable land, as much of its area is covered by arid and unproductive steppes, with mountains to the north and west and the Gobi Desert to the south. Approximately thirty percent of the country's 2.9 million people are nomadic or semi-nomadic. The predominant religion in Mongolia is Tibetan Buddhism, and the majority of the state's citizens are of the Mongol ethnicity, though Kazakhs, Tuvans, and other minorities also live in the country, especially in the west.Third neighbor policy
The third neighbor policy is a facet of foreign relations of Mongolia referring to its building relationships with countries other than Russia and China, the two superpowers that historically had a sphere of influence extending to the country. The economy of Mongolia is dependent on exploitation of the country's mineral resources, which include copper, gold, uranium and coal, and thus the country is vulnerable to pressure from foreign countries and corporations involved in resource extraction.Tourism in Mongolia
Tourism in Mongolia was extremely limited by the Socialist Government, but has been expanding following the 1990 Democratic Revolution in Mongolia in the wake of the collapse of the USSR and the Revolutions of 1989. Mongolia is a unique and relatively unexplored travel destination that offers a great combination of scenic natural features, a wide variety of untouched landscapes, nomadic life style and culture. Travel organizations in Mongolia date back to half a century ago, but the private sector-based tourism is barely twenty years old. Now Mongolia boasts 403 travel companies, 320 hotels, 647 resorts and tourist camps, all employing the graduates from over 56 educational establishments. Mongolia takes an active part in United Nations World Tourism Organization, of which it is a member party.
To boost foreign investment in tourism, the Government of Mongolia offers special tax exemption equaling up to 10 percent of the total investment if offered for construction of high-rated hotels and tourist complexes. Licenses for tourism business were abolished and service provided by tour operators for expatriate visitors is now exempt from VAT. Standards and regulations are largely non-restrictive, with no complicated layers of bureaucracy issuing permission and exercising control.
A vivid example of the successful reform of the legal framework is the progressive increase of the number of visitors – the number reaching 450,000 in 2010 - tripling the 2000 estimate.
With one of the world's lowest population densities, the vastness of the Mongolian-Manchurian grassland, desert, as well as the numerous mountains, rivers and lakes offer plenty of adventure. Although backpacking is becoming more common, travel outside Ulanbataar is mostly arranged by tour operator companies.
In January 2013, the Ministry of Culture, Sport and Tourism of Mongolia approved official slogan for Mongolia's tourism called “Go Nomadic, Experience Mongolia” which, it believes, will properly position help boost tourism industry in Mongolia. However, after a year the Ministry replaced the official slogan to new "Mongolia - Nomadic by Nature.On March 5, 2014, during ITB Berlin 2014 exhibition in Germany, officials from the Ministry of Culture, Sports and Tourism of Mongolia signed an agreement to become official partner country for ITB Berlin 2015.The Ministry of Culture, Sport and Tourism of Mongolia has been restructured into the Ministry of Environment, Green Development and Tourism in December, 2014 as a result of country's government cabinet change.Activity travels available include trekking, climbing, bird watching, horse riding, rafting, camel riding, yak caravan and overland motorcycle tours. Many of these tours focus strongly on ecology and wildlife, and almost all of them include the Gobi Desert as one of their destinations; apart from its numerous native animal species, the desert is famous for its fossilised dinosaur bones and eggs. Mongolia's lakes represent another good hiking destination, as do the Four Holy Peaks surrounding Ulaanbaatar or the Gobi Gurvansaikhan National Park, in the Umnugobi.
The economy of Mongolia is expecting "unstoppable" growth as its natural resources are tapped, which will enable further investment in infrastructure.