Economy of Mongolia
Economics at a Glance:
Economic activity in Mongolia has traditionally been based on pastoralism and agriculture.
Mongolia has extensive mineral deposits.
The country conducts copper, gold, coal, molybdenum, spar, uranium, tin, tungsten, the mining and processing industry accounts for most of foreign direct investment and government revenue.
Severe winters and summer droughts in 2000-2002 led to massive loss of livestock and zero or negative GDP growth.
In 2004-2008, GDP growth was around 9%, largely due to high copper prices and the discovery of new gold.
In 2008, an inflation rate of almost 30% was recorded - the most high level inflation for a decade.
In early 2009, the International Monetary Fund provided $236 million in a stand-by program and the country began to emerge from the crisis, although some instability remains in the banking sector.
In October 2009, the government passed long-awaited legislation to develop Oyu Tolgoi, one of the world's largest copper deposits.
Mongolia's economy is still heavily dependent on its neighbors. Mongolia buys 95% of its oil and a significant amount of electricity from Russia, leaving it vulnerable to rising prices. Trade with China accounts for more than half of Mongolia's total foreign trade—China receives about two-thirds of Mongolia's exports.
Remittances from Mongolians working abroad are significant but have fallen due to economic crisis; money laundering is a growing concern.
Mongolia joined the World Trade Organization in 1997 and is seeking to expand its participation in regional economic and trade regimes.
$3,100 (2009)
4030 million kWh (2009)
5100 bbl/day (2009)
5300 bbl/day (2009)
- $228,700,000 (2009)
Place of the country in the world: 93
- $710 million (2008)
Export:
$1902 million (2009)
Place of the country in the world: 130
$2539 million (2008)
Export - goods:
copper, clothing, livestock, animal products, cashmere, wool, hides, spar, non-ferrous metals, coal
Export - partners:
China 78.52%, Canada 9.46%, Russia 3.02% (2009)
Import:
$2,131 million (2009)
Place of the country in the world: 150
$3224 million (2008)
Import - goods:
machinery and equipment, fuel, automobiles, foodstuffs, industrial consumer goods, chemical, Construction Materials, sugar, tea
Today, the Mongolian economy is developing very dynamically, the country is one of the most promising markets in the entire Asia-Pacific region. According to experts World Bank, the International Monetary Fund and other authoritative organizations, this country is among those in which the pace economic development will soon be among the highest. In particular, the World Bank experts believe that over the next ten years economic indicators will grow by an average of 15% each year.
The economy of Mongolia is concentrated in several industries, these are agriculture and mining. This is even though most people live in cities. A significant part industrial production countries are: 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. Back in early 2010, almost 40% of the population lived below the poverty line. AT last years this figure is declining rapidly.
In the structure of the GDP of the Mongolian economy, the largest part is occupied by mining, accounting for almost 20%. Forestry, agriculture and fisheries account for approximately 17%, with over 10% coming from retail trade and transport. Manufacturing, real estate, communications and information technologies also have their share in GDP.
Most of the able-bodied population is concentrated in agriculture (more than 40%), about a third works in the service sector, almost 15% - in trade. The rest of the people work in production, in the private sector, in the mining industry.
To understand the financial structure of this state, it is important to understand what kind of economy is in Mongolia. It is in the stage of transition from one socio-economic state to another, while occupying an intermediate position between developing and economically developed countries. Mongolia is currently one of the countries with transition economy.
At the same time, in the course of the transformation process, the structure of production, property relations, and management tools are transformed.
The Mongolian economy is an example of a transition 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, the transition to market relations began. The need for urgent reforms in the country matured as early as the 1980s. Perestroika, which began in the Soviet Union, only accelerated this process. Large-scale socio-economic transformations began to be carried out after 1991.
Mongolia is a country with a transitional economy that has been actively developing in recent years. Here are all the main criteria for a state that is at a transitional stage of 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 are of great importance for the economic development of Mongolia, there are really a lot of them here.
In particular, there are three large deposits of brown coal in the country, high-quality hard coal has been discovered in the south, the geological reserves of which, according to preliminary estimates, amount to several billion tons. Deposits of tungsten, which are considered average in terms of the amount of reserves, have been successfully developed for a long time.
In the Treasure Mountain, copper-molybdenum ore is mined. The discovery of this mineral led to the construction of a large mining and processing plant, around which a whole city grew. Today, almost one hundred thousand people live in Erdenet.
An important place in the economic development of Mongolia is occupied by one of the world's largest gold ore deposits, which is called Oyu Tolgoi. Recently, investors' 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.
The main ones in the Mongolian economy are textile, cloth, woolen, leather, sheepskin coat, meat processing, building materials production. The country ranks second in the world in the production of cashmere wool.
Mechanical engineering appeared relatively recently, but has already managed to take a certain place in the economy of Mongolia. In the country in 2006, the first trolleybus produced by Mongolian engineers entered the line. Since 2009, the production of duobuses has begun - this is a vehicle that combines a bus and a trolleybus, which can be used both on routes with and without a contact network.
In 2012, Mongolian engineers assembled the first aircraft in the country for the national carrier. In 2013, together with Belarus, it was possible to agree on the joint production of tractors, enterprises also operate for the production of hang-gliders and gyroplanes. Now it is planned to launch a company for the production of trams on rubber wheels. It will be a brand new look. public transport, which can carry from 300 to 450 passengers at a time.
Briefly characterizing the economy of Mongolia, sufficient attention should be paid to agriculture. The country has a harsh continental climate, so the industry remains vulnerable to cold, drought and other natural disasters. There is catastrophically little arable land in the country, while about 80% of the territories are used for pastures.
Most livestock grazing rural population. 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.
In terms of the number of livestock per capita, Mongolia ranks first in the world. Potatoes, wheat, watermelons, tomatoes, various vegetables are also grown here. In general, there is little arable land, mainly concentrated around large cities in the north of the country.
In recent times, most of the livestock has been concentrated in the hands of a few influential families. Since 1990, a 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 passed regarding banking operations and taxation, debt obligations and loans.
The country has developed rail, road, air and water transport. The decision to build the railway was made in 1915. Now there are two main highways for trains in the country.
The Mongolian railway connects the country with China, it 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. The Orkhon and Selenga rivers, Lake Khubsugul are considered navigable. Mongolia is the second largest country in the world (after Kazakhstan) that has no direct access to any ocean.
But this fact did not prevent her from registering her own shipping register in 2003. Today, about 400 ships sail under the Mongolian flag, and their number is growing rapidly every month.
Most of the roads here are unpaved or gravel. Most of the paved roads are in the Ulaanbaatar area and 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, the country is actively building new highways and modernizing old ones.
Air transport plays an important role in the policy of Mongolia in the economy. In total, 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. There are ten officially registered airlines in Mongolia, which own 30 helicopters and approximately 60 airplanes.
There is an air taxi - a special means of public transport that transports passengers for a fixed fee. Air taxi differs from charter and other commercial flights in its simplicity. For example, there is no lengthy check-in procedure, the waiting time for boarding is minimal. As a rule, it is enough to arrive at the airport a quarter of an hour before departure to go through all the abbreviated customs control and clearance procedures.
There are no stewardesses, kitchens or toilets on such aircraft. In most cases, small aircraft, as well as medium and light-duty helicopters, are used as such taxis.
Mongolia is actively seeking to develop tourism. A lot of hotels have been built in the country, and there are more and more travelers who want to come to this exotic country. There are two ski resorts here, moreover a large number of historical monuments of Buddhist monasteries, untouched nature.
From foreign tourists, most of the guests come to Mongolia 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 about 650 tour operators in the country, ready to receive about one million tourists a year.
Export plays an important role in the economic development of the state. The main goods that are sent abroad are molybdenum concentrate and copper, cashmere, fluorite, leather, wool, clothing, and 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.
At the same time, more than 80% of Mongolian exports go to China. In second place is Canada. From 1 to 4% of the share of exports falls on countries European Union, Russia, South Korea.
This situation began to change after 2012, when Mongolia ceased to be satisfied with export dependence on China. The government began to suspend individual projects of cooperation 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 coal suppliers to the territory of the People's Republic of China.
First of all, industrial and industrial equipment, oil products, and consumer goods are imported into the country.
About a third of imports come from the Russian Federation, with China firmly in second place. Also massively deliver goods to Mongolia from South Korea and Japan.
Mongolia strives to constantly get rid of import dependence. In particular, it is planned to open the first oil refinery on the territory of the state in the near future.
Official currency unit Mongolian is called the Mongolian tugrik. Currently for one Russian ruble you can buy 38 tugriks. The country's own currency appeared only in 1925. And banknotes were originally made in the Soviet Union.
Most banks can use credit cards, there are exchange points in all hotels of the country. Traveler's checks are also accepted as payment here without any problems.
In 1991, the Mongolian stock Exchange.
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, the country introduced minimum size wages. The lowest hourly or monthly wages are set by law by the government. In 2017, the minimum wage amounted to 240 thousand tugriks per month. At the same time, in Mongolia, only 7% of the population receives the minimum wages. Compared to 2013, the minimum wage has increased by a quarter.
The situation in the Mongolian capital Ulaanbaatar in March 2000 was horrendous... writes economist Eric Reinert in How Rich Countries Got Rich and Why Poor Countries Stay Poor. and Mongolia became the best student of the World Bank among the former communist countries. She completely opened the economy and followed all the advice of the World Bank and the IMF: she minimized the role of the state and left the market to take care of the rest. Mongolia was supposed to take its place in the global economy by specializing in areas where it has a comparative advantage. However, being an industrial country, it has degraded to the level of a shepherd. It turned out that nomadism could not feed the population, and there was a simultaneous ecological, economic and human catastrophe."
There were two sectors of the economy that continued to grow: the production of alcohol and the collection of bird down. During a parliamentary meeting in Ulaanbaatar, experts from the World Bank (WB) presented three possible scenarios for the development of Mongolia. In their opinion, the country could grow by 3-5-7% per year. Reinert laughs at the surrealism of the forecasts and laments "the deplorable results of the policy that the World Bank and the IMF are preaching."
However, the average annual GDP growth of Mongolia in the period from 2001 to 2013 exceeded 8%, and in recent years the country has become one of the fastest growing economies in the world (IMF forecast for 2014 - 9.1%, for 2015 - 8.4%). The outlook on the future has also changed. "Kuwait-1950. Abu Dhabi-1970. Mongolia-2012? A country with a GDP growth of 17% resembles the territory of a gold rush. Miners, bankers and lawyers landed in Ulaanbaatar, waiting for a new El Dorado," wrote The Financial Times in 2012 year.
At the same time, the top manager of the Mongolian bank "Golomt" John Finigan recalled Qatar. In 1995, its GDP was $8 billion, and in 2012 it exceeded $200 billion (under $100,000 per capita, almost $500,000 per citizen). "Why is Mongolia worse?" Finigan asked. "Only the ten largest deposits contain $2.75 trillion worth of minerals, which makes every Mongolian a millionaire - all 2.75 million." In 2014, President Tsakhiagiin Elbegdorj presented approximately the same formula at a forum in Davos, slightly adapting wealth to population growth: $3 trillion per 3 million people.
Horde Economy
The skeptics are put to shame, but the plans to build Qatar in the steppe seem too optimistic. Ulaanbaatar in autumn 2014 does not resemble the capital of a third world country, where the population is passionate about collecting bird down. Although in some places there is a lot of it - near the Gandan monastery, crowds of believing Buddhists feed huge flocks of pigeons with grain. But even the capital of Mongolia is far from the business centers of the world.
A huge statue of Genghis Khan in the steppe (his cult replaced the socialist ideology in the post-Soviet years) reminds that this land was once the center of the world (although another city, Karakorum, served as the capital). The Mongol Empire, formed in the 13th century as a result of the conquests of Genghis Khan and his heirs, stretched from the Crimea to the Sea of Japan and from Novgorod to southern China. For centuries, Russia became a tributary of one of the Mongol khanates - the Golden Horde.
The word "horde" in Russian is often associated with something chaotic. But the machine of military suppression created by Genghis Khan is a standard of management and logistics, worthy of study in business schools. The division of troops into tens, hundreds, thousands and tens of thousands (tumens, in Russian - darkness) introduced by Genghis Khan was generally preserved in cavalry around the world until the middle of the 20th century. Discipline along with the principle of collective responsibility (all ten were responsible for the misconduct of a warrior) gave the highest controllability.
In addition, the Mongol army was the most innovative of its time. Wall-beating guns and catapults, borrowed from the Chinese and assembled at the site of the siege by engineers (there was no need to carry bulky devices with you on a campaign, like Europeans), made it possible to take cities by storm. The optimal ratio of heavily armed (40%) and light cavalry (60%) gave high mobility (up to 160 km per day). Thousands of fast archers on hardy short-legged steppe horses (four for each warrior - for frequent shifts) bombarded the enemy with arrows (the light composite Mongolian bow is also an innovation, no worse than the modern iPhone). The linen of warriors was made of silk. Genghis Khan once noticed that when an arrow hits the body, silk does not break, but goes inside with it, this helped to remove the tip from the wound.
There were also "psychological" innovations. For example, tiny clay whistles were often attached to the arrows (they can be seen in the historical museum of Ulaanbaatar), and the cloud of arrows that eclipsed the sun also emitted an eerie howl. Rumors that the Tatars (from tartars - hell, or from the name of one of the conquered tribes) are not just invaders, but fiends of hell, were often deliberately spread by "merchants" sent by the Mongols to the not yet conquered lands for reconnaissance. The use of captive civilians as a human shield (kharash) is supposedly also an invention of the Mongols. During his life, Genghis Khan did not conduct even two battles of the same pattern (each was analyzed by the "general staff" - the inner circle of princes-noyons, mistakes were taken into account, the corresponding decisions were brought to the attention of subordinates).
Initially, however, the military business suffered due to the fact that urban civilization was deeply alien to the nomads. In Europe, wars were different: during the capture of the city, the army, as a rule, was limited to petty robbery - it never occurred to anyone to cut the goose that lays golden eggs. Slightly devastated cities quickly revived, traded and paid tribute to the new owners.
In the models of the economist Mankur Olson, this is called the "stationary bandit" strategy, and, by the way, Olson derives the genealogy of the state from it. At first, the cities were not of particular value to the Mongols: the nomads were interested in pastures and robbery (the strategy of the "tour bandit"). Therefore, cities that did not surrender were often burned to the ground, and the population was slaughtered. For example, such a fate befell the medieval Ryazan (the current Ryazan - renamed in 1778 Pereyaslavl-Ryazan, a city 50 km from the destroyed Ryazan).
But time has shown the ineffectiveness of such a strategy. The empire of Genghis Khan did not disintegrate after his death into warring fragments (as happened, for example, with the empire of Alexander the Great), but in some unity (reminiscent of modern confederations) lasted until the end of the 14th century. The invaders moved to more advanced forms of power business and concentrated on taxation. At first, it was carried out by the occupation administration (Baskaks, Darugs), and then it was farmed out to the enterprising local nobility, in Russia - to the Moscow princes.
Taking taxes in hand, they gradually dealt with all competitors (Tver, Novgorod), expanded their zone of influence and eventually threw off the Mongol yoke at the end of the 15th century. (The Battle of Kulikovo in 1380 does not count. Dmitry Donskoy fought the impostor Mamai, who was not a descendant of Genghis Khan, but did not resist the legitimate Genghisid Tokhtamysh, giving Moscow to plunder in 1382.)
Fragments of the great empire survived until modern times. For example, Genghisides-Gireys ruled the Crimea until 1783, Genghisides-Tore ruled the Kazakh Khanate until its final annexation to Russia in 1820-1830. Territory modern Mongolia was occupied in the 16th century by the Manchus and incorporated into China.
Independence was achieved in 1911, with the collapse of the Qing Empire in China. After the death of the monarch Bogd Gegen VIII in 1924, Mongolia became a republic and completely fell under Soviet influence: collectivization was carried out - cattle were socialized, many Buddhist monasteries and "enemies of the people" were destroyed (in 1920, about a third of the men were monks and lived in 750 monasteries ). Parts of the Soviet army were stationed in Mongolia, Ulaanbaatar sided with the USSR during the Soviet-Chinese conflict. The country received assistance from the USSR and the CMEA and actually became something like the 16th union republic.
In the second half of the 20th century, the USSR helped to diversify the economy: from purely livestock breeding, it became agrarian-industrial. A number of industries were created with the help of Soviet-Mongolian joint-stock companies, so the enterprises "Mongoltrans", "Mongolsherst", "Sovmongolmetall", "Sovmongolpromstroy", the Ulaanbaatar railway, etc. appeared. Until now, the center of Ulaanbaatar is built up with five-story Soviet-style buildings, Cyrillic writing was also inherited from this period of history.
Mountains of rent
Mongolia experienced the collapse of the USSR in much the same way as other ex-republics with large reserves of minerals (Russia, Kazakhstan, Azerbaijan). Until 2000 - painful adaptation to new realities, after - fast growth in the wake of natural resource prices. Mongolia turned out to be "on the right side" of China: everything that it exported (electronics, clothing, household appliances) became cheaper in 2000-2010; everything that was imported (coal, ores, oil) became more expensive.
“The Mongols, unlike the Chinese, never starved. Animal husbandry has always made them well-fed and relatively rich,” says Yuri Kruchkin, a businessman and owner of the Mongolia Now website. “The same production of cashmere ($60 per kilo) makes individual cattle breeders very rich people. , do not look that they live in yurts - some yurts have an area of 1 thousand meters, these are real palaces made of felt." The official figures for GDP per capita ($4,000) are misleading, given the large share of the shadow economy subsistence farming,— 40-60% of GDP. There are more than ten heads of cattle per inhabitant, there is more meat in local dishes than a side dish. Nomadic culture is firmly embedded in customs and habits, this even applies to gambling - in many restaurants people still play dice with sheep's ankle bones.
But animal husbandry is good, and resource rent is better. In 1995, the share of the agricultural sector in GDP was 33%, the mining complex - 10%. Now the shares are equal, each segment has about a quarter of GDP. Mongolia was lucky: on its territory there were super-rich deposits of copper (Oyu-Tolgoi, Erdenet), gold (Oyu-Tolgoi, Boru), coal (Tavan-Tolgoi), uranium (Dornod), as well as iron ore, zinc, molybdenum, silver. Now mining is carried out only on a small part of the deposits, but raw materials already provide about 88% of export earnings (cashmere - almost half of the remaining 12%) against 75% in 1995.
The biggest treasure of Mongolia turned out to be Oyu Tolgoi (Turquoise Mountain). This is the world's largest undeveloped copper deposit (1.4 billion tons of ore) with a high admixture of gold and silver, located in the Gobi Desert, near the border with China. Copper was smelted there in the time of Genghis Khan.
Oyu Tolgoi can generate revenue from the sale of an average of 450 thousand tons of copper per year (3% of world production) and a significant amount of gold and silver for 60 years. This, according to the calculations of the National University of Mongolia and BAEconomics, will increase by 2020 country's GDP by 36.4% against the baseline scenario with a conservative forecast for copper prices ($5.5 thousand per ton, now - $6.8 thousand). And not far from Turquoise Mountain there is also Tavan Tolgoi, one of the world's largest coal deposits (6.5 billion tons, about 40% is high-calorific coking coal).
To develop giant deposits, huge investments are needed, and Mongolia does not have its own money, like technologies. In 2010, the Oyu Tolgoya development project was estimated at $4.6 billion, by 2013 the estimate had grown to $10 billion. Mongolia owns 34% of the project, 66% belongs to Turquoise Hill Resources, the main shareholder of which is the Anglo-Australian mining giant Rio Tinto. Surface mining began in 2013, but underground development stalled as the government and a foreign investor disagreed over taxes and the cost of the project. Rio Tinto froze further investments - the conflict has not yet been resolved.
Not all is well with other projects either. For example, the Australian mining company Hancock Prospecting recently divested itself of its assets in the country after reviewing a new law that would allow any mine to be declared strategic and the license holder to be disenfranchised at any time. Investors also complain about the growing nationalism. The cult of Genghis Khan and the imperial past, apparently, are not the best companions for development in the modern world.
The Other Side of China
The second problem, which is also the source of growth in the 2000s, is China. Mongolia is sandwiched between Russia and China and has no access to the sea. Now China is practically the only buyer of Mongolian raw materials, it absorbs more than 80% of exports and is the source of 49% of foreign direct investment (FDI).
But the problem is not only geographical, but also price. The surge in demand for raw materials in China has caused investment to rise. In the same copper market, additional volumes of the commodity will come from Brazil, Peru, Chile and Zambia in the coming years, which could lead to an oversupply. If Chinese demand (42% of world copper consumption) cannot absorb it, prices will go down. The probability of this is high - China's GDP growth is slowing down, and industrialization can be considered almost complete (more than 90% of the population under the age of 30 out of countryside already employed in non-agricultural sectors). This means that the pace of urbanization is unlikely to be as high as in the recent past. Meanwhile, the share of construction and infrastructure in copper consumption is more than 50%. An urban dweller in China, according to Nomura, already accounts for 37 square meters. m of living space against 35 in Japan, 33 in the UK and 22 in Russia. In addition, 75.6% of the total housing stock was built quite recently, after 2000. Barclays economists predict that in the event of a sharp slowdown in economic growth in China (to 3% of GDP per year), the price of copper could fall to $2.5 thousand per ton, which puts the Oyu Tolgoi project on the brink of profitability.
Other resource histories of Mongolia are also under threat. For example, Tavan-Tolgoi with huge coal reserves. China needs coking coal to make steel, and steel is taken away mainly by the same construction and infrastructure. If China slows down, coal and iron ore prices, which have now reached the levels of the 2009 crisis, are likely to continue to fall.
Non-resource sectors of the economy do not look brilliant against the background of raw material megaprojects. The country is already experiencing symptoms of the "Dutch disease": the cost of labor in the agricultural sector is growing (the aforementioned cashmere has doubled in price in three years), the labor force is being washed away by mining.
Conditions for small and medium-sized businesses are not ideal - in the Doing Business 2015 ranking, the country ranks 72nd. One of the bottlenecks is international trade: 172nd out of 189. The poor cost and time performance of cross-border trade is partly due to geographic location- there is no access to the sea, and is not expected.
The Global Competitiveness Report 2014-2015 rating from the World Economic Forum WEF notes the low competitiveness of the economy: 98th out of 144 (underdeveloped infrastructure, macroeconomic instability high budget deficit, small domestic market). Among the main obstacles, businessmen polled by WEF name inefficient bureaucracy (13.8% of respondents) and insufficiently qualified workforce (9.6%). The level of corruption, according to the survey, is also high (8.5%; for comparison, in Russia - 14.3%), but still this is not the main problem of the economy, it is worth mentioning here that the ex-president of the country Nambaryn Enkhbayar is serving his term just for corruption.
In 2009, Enkhbayar, a protege of the ex-communist Mongolian People's Revolutionary Party, lost the presidential election to oppositionist Elbegdorj, an activist in the 1990 democratic revolution. This was preceded by a split in the coalition government in the summer of 2008, which provoked riots in Ulaanbaatar, in connection with which Nambaryn Enkhbayar considers the trial politically motivated. Nevertheless, in August 2012, the court found the ex-president guilty on a number of episodes (illegal privatization of the Orgoo hotel, the Ulaanbaatar Times newspaper, in which his younger sister received 49% of the shares, etc.). However, Enkhbayar will soon be released - the sentence was eventually reduced, the term was reduced from four years to 2.5.
“Clanism is still very strong,” says Yuri Kruchkin. “Almost every Mongol remembers his ancestry to at least the seventh generation, and if someone gets to power or money, he drags everyone along with him. Former Prime Minister Sukhbaataryn Batbold recently complained : he owns the Genghis Khan Hotel, his numerous relatives work there, the qualifications are not very good, but you can’t fire him - people won’t understand.
Test
by discipline
"World economy"
on the topic:
"Analysis of the economy of Mongolia"
Performed:
3rd year FF student
groups 2308
Bukhadeeva E.B.
Checked by: Ph.D.
Avturkhanov E.M.
Moscow city
2010
Content.
Mongolia is a landlocked country in East Central Asia, bordered by Russia to the north and China to the south, west and east. With an area of 1,564,116 km? and with a population of about 2.9 million people, Mongolia is a country that ranks 19th in the world in terms of area, but at the same time is one of the most sparsely populated countries. About 20% of the entire population of the country live on less than $1.25 a day.
The economy of Mongolia is traditionally based on agriculture and cattle breeding. Mongolia also has extensive mineral deposits: copper, coal, molybdenum, tin, tungsten, gold, the development of which accounts for most of the industrial production.
Mongolia is an agro-industrial country. Mongolia today trades with more than 80 countries of the world. The trade turnover is more than 2 billion US dollars. If until the 1990s, 90% of Mongolian foreign trade was occupied by trade with the USSR, today more than 40% is trade with Russian Federation and the People's Republic of China, and the rest is occupied by trade with such highly developed countries as Japan, the USA, South Korea, and Switzerland.
Although more people live in cities, Mongolia's economy is still centered on industries such as agriculture and mining. Mineral resources such as copper, coal, molybdenum, tin, tungsten and gold make up a significant part of the country's industrial production.
Between 1924 and 1991 The MPR received large financial and economic assistance from the USSR. At the peak of this assistance, one third of its GDP is accounted for. In the early 1990s and the following decade, the Mongolian economy experienced a severe recession followed by stagnation. Extensive droughts in the summer and winter of 2001 and 2002 had a severe impact on agriculture and led to a marked slowdown in the country's GDP growth. Mongolia has a high inflation rate. The global financial crisis has caused a recession in many industries dependent on exports and investment from abroad.
Due to Mongolia's harsh continental climate, agriculture remains vulnerable to natural disasters in the form of severe drought and cold. The country consists of small arable land, but about 80% of the territory is used as pasture. Most of the rural population is engaged in grazing livestock consisting of sheep, goats, cattle, horses and camels. Mongolia has more livestock per capita than any other country in the world. Wheat, potatoes and other vegetables are also grown, in addition to tomatoes and watermelons. GDP PPP: $9.48 billion (2008) GDP per capita PPP (2008): $3,200 Unemployment rate: 2.8% (2008).
Industrial growth - 4.1% in 2002. Electricity production in 2005 - 3.24 billion kWh. Electricity consumption - 3.37 billion kWh. Electricity export - 18 million kWh. Electricity import - 130 million kWh.
Mining industry. Despite the abundance of mineral deposits, their development is still limited. There are 4 brown coal deposits in Mongolia (Nalaikha, Sharyngol, Darkhan, Baganur). In the south of the country, in the region of the Taban-Tolgoi mountain range, hard coal was discovered, the geological reserves of which amount to billions of tons. Medium deposits of tungsten and fluorspar have long been known and are being developed. Copper-molybdenum ore found in Treasure Mountain (Erdenetiin ovoo) led to the creation of a mining and processing plant, around which the city of Erdenet was built. Oil was discovered in Mongolia in 1951, after which an oil refinery was built in Sain-Shanda, a city southeast of Ulaanbaatar, near the border with China (oil production ceased in the 1970s). Near Lake Khuvsgul, giant deposits of phosphorites were discovered and even their mining began, but soon, due to environmental considerations, all work was reduced to a minimum. Even before the start of reforms in Mongolia, with the help of the USSR, zeolites, minerals of the aluminosilicate group, were successfully searched for, which are used in animal husbandry and agriculture as adsorbents and biostimulants.
Currently, the main branch of the extractive industry is coal (mainly lignite). Most of the coal production is concentrated at the Sharyn-Gol open-pit mine (annual production of over 1 million tons), near the city of Darkhan, as well as at the Nalaya mine (with a capacity of over 600 million tons). There are a number of smaller cuts in the area of Under-Khan and others. Electricity production - at thermal power plants (the largest thermal power plant in Darkhan). Manufacturing industry. The sectoral light and food industries account for more than one second of gross industrial output and more than one second of employed workers. The largest enterprises are: an industrial plant with 8 factories and plants in Ulaanbaatar, Choibalsanei, etc. In the building materials industry, an important place among enterprises is occupied by a house-building plant in Ulaanbaatar, cement and brick factories in Darkhan.
Initially, the local industry was based almost exclusively on the processing of animal raw materials, and the main types of manufactured products were woolen fabrics, felt, leather goods, and food products. Lots of new industrial enterprises appeared in Mongolia after the end of the Second World War - especially in the 1950s and early 1960s, when the country received significant financial assistance from the Soviet Union and China. In the 1980s, local industry provided approximately 1/3 of the national product of Mongolia, while in 1940 it was only 17%. After the end of World War II, the share of heavy industry in the total volume of industrial production increased significantly. There are more than two dozen cities with enterprises of national importance: in addition to the already named Ulaanbaatar and Darkhan, the largest are Erdenet, Sukhebaatar, Baganur, Choibalsan. Mongolia produces more than a thousand types of industrial and agricultural products, most of which are consumed domestically; furs, wool, leather, leather and fur products, livestock and livestock products, phosphorites, fluorites, molybdenum ore are exported.
Agriculture has always been the backbone of the Mongolian economy. In the context of the transition to the market, its importance has increased. It employs 50% of the country's population (in 1950 - about 80%), it provides more than 40% of GDP. In terms of livestock per capita, we rank third in the world, second only to Australia and New Zealand. Until the early 1940s, when industry formed into an independent sphere, agriculture was the only industry material production in the country. Back in 1950, it produced 60% of the national income. Further, its share was reduced: in 1970 - to 25%, in 1975 - to 22.4%. At present, it has increased slightly - up to almost 30%. At the same time, over 50% of export products are accounted for by agricultural raw materials, and taking into account products from it - over 70%.
Level and pace of development Agriculture largely determine the most important national economic proportions. Traditional industries such as light and food industries completely depend on its condition, since the cost of agricultural raw materials constitutes the main part of their production costs. Pasture animal husbandry still remains the main type of economic activity. To date, Mongolia is among the leading countries in the world in terms of livestock per capita (approximately 12 heads per person).
On the basis of the law on foreign investment adopted in 1990, citizens of other states were given the opportunity to own shares of various types of enterprises - from firms with 100 percent foreign capital to joint companies. New laws were passed regarding taxation and banking, credit and debt. In May 1991, a law on privatization came into force, according to which state property could pass into the hands of "law-abiding" citizens (that is, those who had not previously committed serious crimes) permanently residing in the country. Each citizen was given a special investment coupon that could be bought, sold or given to any other person. Holders of such coupons became active participants in special auctions, with the help of which state property was privatized. Later, in 1991, "state farms" and cooperative livestock associations were liquidated, and the transfer of land and livestock to private ownership began.
Mongolia as a member of the World Trade Organization in March 2005 submitted its trade policy to the members of this organization for discussion, which is quite liberal. In 2002, the Government of Mongolia established uniform 5% customs rates for most imported goods. For the further development of Mongolia's foreign trade, the decision of the European Union to include Mongolia as a developing country vulnerable economy and as a landlocked country to the GSP+ program. Thus, from July 1, 2005, Mongolian goods began to be imported into the European market without customs duties.
The total turnover in foreign trade for the first half of 2008 amounted to 2 971.3 million US dollars, including export 1 276.3 million dollars, import - 1 695.0 million dollars. The deficit amounted to 418.7 million US dollars, which is more by 386.5 million US dollars compared to the same period last year. The total trade turnover in comparison with the same period of 2007 increased by 74.3%, export - by 52.6%, import - by 95.2%. The negative balance of foreign trade was significantly affected by the growth of imports, which is 42.6 points higher than the volume of exports.
Imports are mainly oil products, equipment and spare parts, vehicles, metals, chemicals, building materials, food and consumption. In 2004, imports amounted to $1 billion.
In 2005 imported goods came from: Russia - 34.5%, China - 27.4%, Japan - 7.1%, South Korea - 5.3%. In the total volume of imports, mineral products increased by $196.4 million, pulp, paper, cardboard and products from them - by $189.2 million, vehicles - by $133.7 million, cars, electrical equipment, televisions, spare parts - by $92.3 million. dollars, metallurgical products - by 68.1 million dollars, foodstuffs - by 37.2 million dollars.
Mongolian exports are: minerals (copper, molybdenum, tin, spar concentrate), raw materials of animal origin (wool, cashmere, leather, fur), consumer goods (leather, sheepskin, leather goods, carpets, cashmere, camel knitwear, wool blankets and cashmere). The subsoil of the country is rich in mineral resources, including vast deposits of coal, iron ore, tin, copper, uranium, oil, zinc, molybdenum, phosphorus, tungsten, gold, fluorite and semi-precious stones.
Export: (2.5 billion dollars in 2008) - copper, molybdenum concentrate, meat, livestock, livestock products, goat down, wool, skins, coal. The main buyers in 2008 are China (76%), Canada (9%), Russia (3%). Imports: ($3.6 billion in 2008) - fuels, machinery, automobiles, food, industrial consumer goods, chemicals, building materials, sugar, tea. The main suppliers in 2008 are Russia (35%), China (29%), Japan (8%). External debt- 1.6 billion dollars (in 2008).
Mongolia is a member of the World Trade Organization (since 1997). The main trading partners of the country are China and Russia, and Mongolia's economy is largely dependent on these countries. In 2006, 68.4% of Mongolia's exports went to China, while imports accounted for only 29.8%. Mongolia imports about 95% of oil products, and a significant share of electricity from Russia, which makes the country extremely dependent economically.
The main types of transport in Mongolia are: rail, road, air, water. The Mongolian Railway is a railway in the territory of Mongolia. The official name is the Russian-Mongolian Joint-Stock Company "Ulaanbaatar Railway". Railway transport occupies a share of 80% of all freight and 30% of all passenger traffic in Mongolia. After the democratic revolution in the 1990s, there was a decline in freight and passenger traffic in Mongolia. But already in 2001, passenger traffic indicators recovered to the previous level and amounted to 4.1 million passengers per year. By 2005, the volume of freight traffic also recovered.
Train of the Trans-Mongolian Railway in the Gobi Desert Today, the Mongolian Railway is one of the leading sectors of the economy of Mongolia, on the work of which the economic development of the whole country largely depends. At the beginning of 2005, the technology of operational work of the Mongolian Railway was fundamentally changed, as a result of which the qualitative and quantitative indicators of the road were improved: the turnover of wagons was doubled and the average weight of trains was increased. The total length of railways for 2004 is 1810 km.
Automobile transport. Highways in Mongolia, 75 thousand km, according to state accounting, But they are almost entirely unpaved, that is, in any direction there are half a dozen rolled paths, some of them lead to a yayla, a watering hole, a somon or a settlement that has not yet migrated from these places And how consequently, you can not travel without a guide! Cattle breeders only know directions. No one cares where any of these roads will lead. The driver of a truck, a UAZ jeep, a guide in an off-road minibus know their roads by signs. There are no pointers. Road culture in the pre-conception period. A map is often a source of misinformation. Mountain rivers have demolished bridges, now there is no one to restore them, they have rolled new roads on the plain in the desert, where it is possible to ford the rivers.
The asphalt pavement of roads starts from Erdene, which is 72 km east of Ulaanbaatar, the road is paved to the first capital of Genghis Khan Kharkhorin and continues for 300 km to the aimag center of Arvaikheer. The soils in Mongolia are stony, in the mountains the road is made of large rubble and small cobblestones, and in the desert it is made of coarse sand and fine gravel. Transitional form from one state of the road to another "washboard" wave wheel modulation of the soil by heavy machines.
Air Transport. As of 2006, there were 44 airports in Mongolia. Of these, 12 had runways with artificial turf. Ten of these bands had a length in the area from 2438 to 3047 meters, and the other two - between 1524-2437 meters.
Chinggis Khaan International Airport, located in the suburbs of Ulaanbaatar, is the only international airport in Mongolia. Direct flights are operated to Berlin, Moscow, Beijing, Hohhot, Seoul, Yekaterinburg, Irkutsk, Ulan-Ude and Tokyo.
The remaining 32 airports have unpaved runways. On two of them, the runway is over 3047 meters, on three - between 2438-3047 meters, on twenty-four - between 1524-2437 meters, on two more - between 914-1523 meters, and one airport, the runway of which has a length less than 914 meters. There is also one heliport in Mongolia.
As of June 2007, the airlines operating in Mongolia are: MIAT (Mongolyn Irgeniy Agaaryn Teever), Aero Mongolia, and Izinis Airways. They operate both domestic and international flights. Water transport. In Mongolia, 580 km of rivers and lakes are available for navigation, but more or less water transport is developed only on Lake Khubsugul. The Selenga and Orkhon are also navigable (the length of the navigable sections is 270 and 175 km, respectively), but water transport is not well developed on them, although a border boat on the Selenga River patrols the Russian-Mongolian border. Lakes and rivers freeze in winter; navigation usually opens in May and ends in September.
Marine fleet. Mongolia is the second (after Kazakhstan) country in the world in terms of territory, which does not have access to any sea. However, this did not prevent her from registering her ship register (The Mongolia Ship Registry Pte Ltd) in February 2003. Starting from the moment of registration, Mongolia has been steadily increasing the number of ships flying its flag. And in 2003, revenues to the treasury amounted to about $20,000,000.
Back in the early 1990s, they began to rebuild banking system, as a result, it became a two-tier one - the Central Bank ceased to engage in conventional banking At the same time, banks with private and public capital got the opportunity to work. The prerequisites for such a transition were created only with the adoption in mid-1991 of the Law on Banks and the Law on Mongolian Bank (on central bank). The main direction of the transformations was the rejection of the state monopoly, the formation of a banking system that meets the requirements of market relations and meets generally accepted standards and norms.
At present, the main factors determining the place of the Central Bank in the Mongolian economy are the system existing laws, the relationship of his measures with economic policy, principles of interaction with the banking system. The Law on the Central Bank fixes its complete independence in the field of direct activity.
So, in a short period, a new monetary system has been created in the country, which is one of the key elements economic mechanism and driving force of the market economy. Commercial banks became the main creditors and subjects of investment. Today there are 16 commercial banks in Mongolia; 40% more than in 1994. Naturally, the Central Bank (Mongolbank) occupies a leading place in the country's banking system. It develops the main directions of monetary policy and determines the specific tasks that must be addressed in the coming year.
During the entire period of transition to a market economy, financial stabilization is a priority of monetary policy. If until 1996 the achievement of this goal was associated mainly with anti-inflationary measures, then present stage the problems of maintaining economic growth and creating conditions for investment activity are brought to the fore. At the same time, thanks to a relatively tight monetary and budgetary policy, it was possible to reverse the negative trends in the economy and keep inflation and inflation under control. exchange rate. As a result, after a sharp decline in production, which lasted four years, in 1994 the recovery resumed. In particular, an increase in GDP began, which in 1995 amounted to 6.3%, in 1996 - 2.6%, in 1997 - 3.3%, in 1998 - 3.5%. At the same time, there was a tendency to reduce the rate of price growth. If in 1992, at the very peak of inflation, its index reached 325%, then in the following years this sphere was brought under control, and in 1998 it amounted to only 6%.
Despite the generally positive nature of economic development, there is still, in my opinion, the threat of inflationary surges in Mongolia due to a decline in production in some industries, dependence on imports, a large budget deficit, as well as the growth of unresolved social problems in society. Because of this, Mongolbank is still faced with the task of ensuring stability national currency, restructuring the banking system and maintaining macroeconomic stability.
Most complex elements reforms were the reorganization of the monetary system and the liberalization of foreign trade. The small size and excessive dependence on imports made the Mongolian economy particularly sensitive to changes in the exchange rate of the Tugrik. In this area, the Central Bank and the government faced a dilemma: to accept a flexible or fixed exchange rate.
Source - http://www.legendtour.ru/
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