MONGOLIA



Mongol Uls

COUNTRY OVERVIEW

LOCATION AND SIZE.

Formerly known as Outer Mongolia, the Republic of Mongolia is a landlocked country located between the Russian Federation and the People's Republic of China. The country has an area of 1,565,000 square kilometers (604,246 square miles), slightly smaller than the state of Alaska. Mongolia's capital city, Ulaanbaatar, is located in the northeast of the country, 200 kilometers (124 miles) from the Russian border.

POPULATION.

The population of Mongolia was estimated at 2,650,952 in July 2000. It has almost doubled since the 1960s, due to improved health and medical facilities, and longer life expectancy. In 2000 the birth rate stood at 21.53 per 1,000 while the death rate stood at 6.14 per 1,000. The estimated annual population growth rate is 1.54 percent; if the current trend remains unchanged, the population is expected to double once more within the next 25-30 years.

With ethnic Mongols making up almost 90 percent of the population, Mongolia is ethnically homogenous (uniform). Kazakhs make up 4 percent, and other ethnic groups, including Chinese and Russians, round out the total. The Mongolian population is young, with 34 percent below the age of 15 and just 4 percent older than 65. Urbanization started only in the 1960s, but by the late 1990s almost 58 percent of Mongolians lived in urban areas. Ulaanbaatar and its suburbs are home to 773,700 people, or nearly one-third of the country's total.

At the beginning of the 20th century, the Mongolians were under threat of extinction due to the absence of medical services, high infant mortality, diseases and epidemics, and natural disasters. After independence in 1921, the government in this sparsely populated country began promoting population growth. This policy reversed the decline and stimulated a rapid increase in the population during the second half of the 20th century. However, population density remains one of the lowest in the world, with about 1.6 people per square kilometer (3.9 people per square mile). The country's low population can be explained in part by its geographic and climatic extremes: Mongolia is home to soaring mountains and burning deserts, including the Gobi Desert in the southern third of the country; because of the country's high average altitude, winters are long and temperatures extreme.

ANIMAL HERDING.

Animal herding is the most important sector of Mongolian agriculture, providing almost two-thirds of agricultural production. It provides a source of income, food, and a mode of transportation for a significant part of the population as well as being an important part of Mongolia's exports. Mongols still migrate around vast prairies, raising horses, sheep, goats, cattle, and camels. By the second half of the 1990s, the livestock population had reached a record high of 31.2 million, almost 90 percent of which was privately owned. With the liberalization of international trade, many herders turned to raising goats to produce valuable cashmere, and the number of goats almost doubled to 11 million between 1992 and 1998. In 1998 Mongolia produced 502.1 tons of cashmere, but fluctuations in the world price of this commodity have hurt profits. Overgrazing of pasture land, especially by goats, could potentially cause environmental degradation in the fragile prairie ecosystem, and there are limited resources available to reverse the trend.

CROP CULTIVATION.

In 1998 Mongolia produced 194,900 tons of cereals (down from 330,700 tons in 1994), 65.2 tons of potatoes, and 45.7 tons of vegetables. Crop cultivation is limited, due to the harsh continental climate (the growing season is just more than 100 days long) and a shortage of arable (cultivatable) land, though this sector plays an important role in sustaining self-sufficiency in foodstuffs. After the privatization of the large state-controlled farms in the 1990s, crop production fell sharply, a decline blamed on a lack of management skills, funds, and technologies, and on an ill-considered and ill-implemented privatization program. Other sectors of Mongolian agriculture include forestry, fishery, and fur production, all relatively minor.

MINING.

Copper, gold, molybdenum and fluorspar concentrates are the major natural resources of export significance in Mongolia. In 1998 Mongolia exported 485,000 tons of copper concentrate, valued at $124 million; around 12.5 tons of gold, valued at $117.2 million; and 4,131 tons of molybdenum concentrate, valued at $12.1 million. Export of these mineral resources provided around 60 percent of total export earnings in 1998. Mongolian coal reserves are estimated at approximately 100 billion tons, but the country extracts coal mainly for domestic consumption, at a level of around 5.1 million tons per year.

Mining is a relatively new sector in the Mongolian economy. Although the country is rich in various natural resources, until the 1970s they were under-exploited. Major mining plants were built in the 1970s with Soviet assistance. The biggest, Erdenet and Darhan, are situated in the north of the country, close to the Russian border. In the 1990s, the Mongolian government struggled to attract international investors into the mining sector. Mongolia still largely relies on Russian technology in this sector of the economy, although Russian involvement began to diminish during the 1990s as multinational corporations started to move into the mining sector.

In the mid-1990s, oil reserves were discovered, estimated at around 5 billion barrels, that could be used both for domestic consumption and for export to China. Extraction of oil from Tamsag basin began in 1997 and completion of an oil refinery is expected in Nalaikh, near Ulaanbaatar, in 2002. International investment is needed to develop its oil reserves at full scale.

MANUFACTURING.

Mongolia's manufacturing sector accounted for 24 percent of GDP in 1998, employing 12.4 percent of the labor force in the production of agricultural products, garments, leather goods, and carpets. During the era of state-controlled industry (1924-91), these goods were produced mainly in small and medium-sized, state-owned enterprises for export to the Soviet Union and Eastern Europe. Russia was also the main market for Mongolia's food processing industry, which produced sausages and canned meat.

The manufacturing industry was one of the fastest growing sectors of the economy in the 1970s and 1980s, but because of excessive state control, it was relatively inefficient and made low quality products. In the 1990s, the government introduced a privatization program aimed at stimulating private initiative and increasing productivity, but the sector could not compete internationally because of a lack of management skills, lack of investments, and inefficient technologies. A steep recession, which threatened thousands of jobs and provoked social protests, followed. Between 1994 and 1998, production of leather footwear declined from 407,000 pairs to 33,000, leather coats from 35,000 to zero, sheepskin coats from 57,000 to 1,000, and woolen fabrics from 77,000 square meters to 5,000 square meters.

DEPENDENCIES

Mongolia has no territories or colonies.

BIBLIOGRAPHY

Akiner, Shirin, editor. Mongolia Today. London: Routledge,1991.

Economist Intelligence Unit. Country Report: Mongolia, November 2000. London: Economist Intelligence Unit, 2000.

Fletcher, Sanjay, Catriona Purfield, and Sergei Dodzin. Mongolia. Statistical Annex. Washington, D.C.: World Bank, January 2000.

Human Development Report Mongolia 2000: Reorienting the State. Ulaanbaatar: UNDP and Government of Mongolia, 2000.

Mongolia: Toward a Market Economy. Washington, D.C.: WorldBank, December 1992.

The Mongol Messenger. <http://www.mongolnet.mn/mglmsg> .Accessed February 2001.

Nixon, F.I., B. Walters, B. Suvd, and P. Luvsandori, editors. The Mongolian Economy: A Manual of Applied Economics of an Economy in Transition. Aldershot, UK: Edward Elgar, 2000.

UB-Post . <http://www.ulaanbaatar.net/ubpost> . AccessedFebruary 2001.

United Nations in Mongolia. <http://www.un-mongolia.mn> .Accessed February 2001.

U.S. Central Intelligence Agency. The World Factbook, 2000. <http://www.cia.gov/cia/publications/factbook> . Accessed June 2001.

—Rafis Abazov

CAPITAL:

Ulaanbaatar (formerly spelled Ulan Bator).

MONETARY UNIT:

Mongolian tughrik (togrog) (MT), equal to 100 mongos. There are coins of 1, 5, 10, and 50 mongos. Paper money comes in notes of 1, 5, 10, 20, 50, 100, 500, 1,000, 5,000, and 10,000 tughriks.

CHIEF EXPORTS:

Copper, gold, non-ferrous metals and animal products, including cashmere, wool, livestock.

CHIEF IMPORTS:

Machinery and equipment, chemicals, industrial consumer goods, fuel and food products, including sugar and tea.

GROSS DOMESTIC PRODUCT:

US$6.1 billion (1999 est.).

BALANCE OF TRADE:

Exports: US$454.3 million (1999 est.). Imports: US$510.7 million (1999 est.).



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