Today the economy of Mongolia is developing very dynamically, the country is one of the most promising markets in the entire Asia-Pacific region. According to experts from the World Bank, the International Monetary Fund and other reputable organizations, this country is one of those in which the pace of economic development in the near future will be one of the highest. In particular, World Bank experts believe that over the next ten years, economic indicators will grow by an average of 15% each year.
Major industries
The economy of Mongolia is concentrated in several sectors, such as agriculture and mining. This is despite the fact that most of the people live in cities. A significant part of the country's industrial production is made up of coal, copper, tin, molybdenum, gold and tungsten.
At the same time, a few years ago there were a huge number of poor people in the country. At the beginning of 2010, almost 40% of the population lived below the poverty level. In recent years, this indicator has been declining rapidly.
In the structure of the GDP of the Mongolian economy, the largest part is mining, accounting for almost 20%. Forestry, agriculture, and fisheries account for approximately 17%; more than 10% comes from retail wholesale and transport. Manufacturing, real estate, communications and information technologies also have their share in GDP.
Most of the working-age population is concentrated in agriculture (over 40%), about a third work in the service sector, and almost 15% work in trade. The rest of the people work in manufacturing, in the private sector, in the mining industry.
Type of economy
To understand the financial structure of this state, it is important to understand what kind of economy is in Mongolia. It is in the process of transition from one socio-economic state to another, while occupying a certain intermediate position between developing and economically developed countries. Currently, Mongolia is a country in transition.
Moreover, during the transformation process, the structure of production, property relations, and management tools are transformed.
The economy of Mongolia is an example of a transitional economy. The collapse of the socialist system at the end of the 20th century also affected this state. In all countries that were previously part of the socialist camp, a transition to market relations has begun. The need for urgent reforms in the country ripened back in the 80s. Perestroika, which began in the Soviet Union, only accelerated this process. Large-scale social and economic transformations began to be implemented after 1991.
Mongolia is a country with a transition economy that has been actively developing recently. Here are all the basic criteria for a state in transition to its socio-economic development. These are privatization and reorganization, macroeconomic stabilization, liberalization. Building a market economy in Mongolia is the ultimate goal, which today can be considered partially achieved.
Natural resources
For the economic development of Mongolia, natural resources are of great importance, there really are a lot of them.
In particular, there are three large deposits of brown coal in the country, and high-quality coal was discovered in the south, the geological reserves of which, according to preliminary estimates, amount to several billion tons. Deposits of fluorspar and tungsten, which are considered average in the amount of reserves, have long been successfully developed.
Copper-molybdenum ore is mined in Treasure Mountain. The discovery of this mineral led to the construction of a large mining and processing plant, around which a whole city grew. Today, one hundred thousand people live in Erdenet.
An important place in the economic development of Mongolia is one of the largest gold ore deposits in the world, called Oyu-Tolgoi. Recently, investor interest in this country has increased, since most of the land here has not yet been studied by geologists, which means that many minerals have not yet been found.
Industry and engineering
The main industries in the economy of Mongolia are textile, cloth, wool, leather, sheepskin and fur coat, meat processing, production of building materials. The country ranks second in the world for the production of cashmere wool.
Engineering appeared relatively recently, but has already managed to occupy a certain place in the economy of Mongolia. In 2006, the first trolleybus launched by Mongolian engineers entered the country. Since 2009, the production of duobuses began - this is a vehicle that combines a bus and a trolley bus that can be used both on routes with a contact network, and without it.
In 2012, the Mongolian engineers assembled the first aircraft in the country for a national carrier. In 2013, together with Belarus, it was possible to agree on the joint production of tractors, as well as enterprises for the production of hang-gliders and gyroplanes. Now it is planned to launch a company for the production of trams on rubber wheels. This will be a fundamentally new type of public transport, which can transport from 300 to 450 passengers at a time.
Agriculture
Briefly describing the economy of Mongolia, sufficient attention should be paid to agriculture. The country has a harsh continental climate, so this industry remains vulnerable to cold, drought and other natural disasters. The country has catastrophically few arable land, while about 80% of the territories are used for pasture.
Most of the rural population is grazing livestock. Mostly goats, sheep, camels, horses, cattle are bred here. It is worth noting that this is the only modern state in the world in which nomadic animal husbandry is still among the main sectors of the economy.
By the number of cattle per capita, Mongolia ranks first in the world. It also grows potatoes, wheat, watermelons, tomatoes, various vegetables. In general, there is little arable land, mainly they are concentrated around large cities in the north of the country.
Recently, most livestock has been concentrated in the hands of several influential families. Since 1990, the law on foreign investment has been in force, which allows citizens of other states to own shares in various Mongolian enterprises. New laws have also been adopted regarding banking and taxation, debt and credit.
Transport
The country has developed rail, road, air and water transport. The decision to build a railway was made in 1915. Now the country has two main thoroughfares for trains.
The Mongolian railway connects the country with China, this is the shortest route between Europe and Asia. The total length of roads is approaching two thousand kilometers.
The total length of waterways in the country is only about 600 kilometers. Navigable rivers are Orkhon and Selenga, Lake Hubsugul. Mongolia is the second country in the world by area (after Kazakhstan), which does not have direct access to any ocean.
But this fact did not prevent her from registering her own ship register in 2003. Today, about 400 vessels sail under the Mongolian flag; their number is rapidly increasing monthly.
Car roads
Most roads here are unpaved or gravel. Most of the roads with hard asphalt pavement are located in the Ulan Bator region, they lead to the Chinese and Russian borders.
The total length of roads in the country is almost 50 thousand kilometers. Of these, less than 10 thousand kilometers are paved roads. Currently, new highways are actively being built in the country and old ones are being modernized.
Aviation
In the politics of Mongolia in the economy, an important role is played by air transport. There are 80 airports in the country, while only 11 have paved runways.
At the same time, the flight schedule is extremely unstable. Due to strong winds, flights are constantly canceled or rescheduled. In Mongolia, ten airlines are officially registered, which own 30 helicopters and approximately 60 aircraft.
There is an air taxi - a special means of public transport that carries passengers for a fixed fee. Air charter differs from charter and other commercial flights in its simplicity. For example, there is no procedure for a long registration, the waiting time for landing is minimal. As a rule, it is enough to arrive at the airport a quarter of an hour before departure in order to go through all the reduced customs control and clearance procedures.
There are no stewardesses, kitchens or toilets on such aircraft. In most cases, these planes use small planes, as well as medium and light helicopters.
Tourism
Mongolia is actively striving to develop tourism. A lot of hotels have been built in the country, there are more and more travelers who want to come to this exotic country. There are two ski resorts, in addition to a large number of historical monuments of Buddhist monasteries, untouched nature.
Of the foreign tourists, most of the guests from Mongolia come from Russia, China, South Korea, and the United States of America. You can also meet quite a lot of travelers from Germany, France and Australia.
There are approximately 650 tour operators operating in the country, ready to receive about one million tourists a year.
Export
An important place in the economic development of the state is played by exports. The main goods sent abroad are molybdenum concentrate and copper, cashmere, fluorite, leather, wool, clothing, meat. The bowels of the country are rich in mineral resources. In particular, there are many reserves of tin, iron ore, coal, uranium, copper, zinc, oil, phosphorus, molybdenum, gold, tungsten, and semiprecious stones.
Moreover, more than 80% of Mongolian exports go to China. In second place is Canada. From 1 to 4% of the export share falls on the countries of the European Union, Russia, South Korea.
This situation began to change after 2012, when Mongolia was no longer satisfied with export dependence on China. The government began to suspend certain cooperation projects with China. It is believed that one of the reasons for this was the attempt by a large Chinese aluminum company to obtain a controlling stake in one of the largest Mongolian suppliers of coal to the territory of the People’s Republic of China.
Import
First of all, the country imports industrial and industrial equipment, oil products, and consumer goods.
About a third of imports are from the Russian Federation, and China is firmly in second place. Also, goods from South Korea and Japan are delivered in bulk to Mongolia.
Mongolia seeks to constantly get rid of import dependence. In particular, it is planned in the near future to open the first refinery in the state.
Financial sector
The official currency of Mongolia is called the Mongolian Tugrik. Currently, 38 tugriks can be bought for one Russian ruble. Own currency in the country appeared only in 1925. Moreover, banknotes were originally made in the Soviet Union.
Most banks can use credit cards, there are exchange points in all hotels of the country. Also, as a payment, traveler's checks are accepted here without any problems.
In 1991, the Mongolian Stock Exchange was opened.
Population income
In 2017, the average salary in the country amounted to 240 thousand tugriks per month, that is, less than six and a half thousand rubles.
At the same time, a minimum wage has been introduced in the country. The lowest hourly or monthly wages under the law are set by the government. In 2017, the minimum wage just amounted to 240 thousand tugriks per month. At the same time, in Mongolia only 7% of the population receives the minimum wage. Compared to 2013, the minimum wage increased by a quarter.