Mongolia is vast semidesert and desert plains, grassy steppe, with mountains in west and southwest and the Gobi Desert in south-central part of the country.
The Mongols gained fame in the 13th century when under Chinggis Khaan they established a huge Eurasian empire through conquest. After his death the empire was divided into several powerful Mongol states, but these broke apart in the 14th century.
The Mongols eventually retired to their original steppe homelands and in the late 17th century came under Chinese rule.
Mongolia won its independence in 1921 with Soviet backing and a Communist regime was installed in 1924.
The modern country of Mongolia, however, represents only part of the Mongols' historical homeland; more ethnic Mongolians live in the Inner Mongolia Autonomous Region in the People's Republic of China than in Mongolia.
Following a peaceful democratic revolution, the ex-Communist Mongolian People's Revolutionary Party (MPRP) won elections in 1990 and 1992, but was defeated by the Democratic Union Coalition (DUC) in the 1996 parliamentary election.
The MPRP won an overwhelming majority in the 2000 parliamentary election, but the party lost seats in the 2004 election and shared power with democratic coalition parties from 2004-08. The MPRP regained a solid majority in the 2008 parliamentary elections but nevertheless formed a coalition government with the Democratic Party. In 2010 the MPRP voted to retake the name of the Mongolian People's Party (MPP), a name it used in the early 1920s.
Mongolia's major environmental issues include:
- limited natural freshwater resources in some areas;
- the policies of former Communist regimes promoted rapid urbanization and industrial growth that had negative effects on the environment;
- the burning of soft coal in power plants and the lack of enforcement of environmental laws have severely polluted the air in Ulaanbaatar;
- deforestation, overgrazing, and the converting of virgin land to agricultural production have increased soil erosion from wind and rain;
- desertification; and ,
- mining activities have had a deleterious effect on the environment
Mongolia is susceptible to dust storms; grassland and forest fires; drought; and "zud," which is harsh winter conditions.
Location: Northern Asia, between China and Russia
Geographic Coordinates: 46 00 N, 105 00 E
Area: 1,564,116 sq km(land: 1,553,556 sq km; water: 10,560 sq km)
Land Boundaries: 8,220 km (China 4,677 km, Russia 3,543 km)
Natural Hazards: dust storms; grassland and forest fires; drought; "zud," which is harsh winter conditions
Terrain: vast semidesert and desert plains, grassy steppe, with mountains in west and southwest and the Gobi Desert in south-central part of the country. The highest point is Nayramadlin Orgil (Huyten Orgil) (4,374 m) and its lowest point Hoh Nuur (560 m)
Climate: desert; continental (large daily and seasonal temperature ranges)
Topology of Mongolia. Source: Wikimedia Commons
Ecology and Biodiversity
Source: World Wildlife Fund
- Altai alpine meadow and tundra
- Sayan Alpine meadows and tundra
- Altai montane forest and forest steppe
- Great Lakes Basin desert steppe
- Junggar Basin semi-desert
- Sayan montane conifer forests
- Selenge-Orkhon forest steppe
- Khangai Mountains conifer forests
- Khangai Mountains alpine meadow
- Gobi Lakes Valley desert steppe
- Alashan Plateau semi-desert
- Eastern Gobi desert steppe
- Mongolian-Manchurian grassland
- Daurian forest steppe
- Trans-Bailkal conifer forests
The western region of Mongolia, with its several salt lakes, can be seen in this true-color image acquired from data collected by MODIS on October 15, 2001. The northernmost lake, named Uvs Nuur, is Mongolia's largest lake, and is home to over 220 species of birds. The lake has a salt content that is 5 times greater than that of ocean water, supports no fish life, and spans 335,000 hectares (873,000 acres). Also visible are the Russian Republics of Tyka, which borders Mongolia to the north, and Altay, which is west of Tyka. Source: Jacques Descloitres, MODIS Land Rapid Response Team, NASA/GSFC
People and Society
Population: 3,179,997 (July 2012 est.)
Life in sparsely populated Mongolia has recently become more urbanized. Nearly half of the people live in urban centers, including the capital, Ulaanbaatar. Semi-nomadic life still predominates in the countryside, but settled agricultural communities are becoming more common. Mongolia's birth rate is estimated at 25.1 births per 1,000 people (2009 est.). About 58% of the total population is under age 30, 47.8% of whom are under 14.
Ethnic Mongols account for about 94.43% of Mongolia's population and consist of Khalkha and other groups, all distinguished primarily by dialects of the Mongol language. Mongol is an Altaic language--from the Altaic Mountains of Central Asia, a language family comprising the Turkic, Tungusic, and Mongolic subfamilies--and is related to Turkic (Uzbek, Turkish, and Kazakh), Korean, and, possibly, Japanese. Among ethnic Mongols, the Khalkha comprise about 90% and the remaining 10% include Dorvod, Tuvan, and Buriat Mongols in the north and Dariganga Mongols in the east. Turkic speakers (Kazakhs, Turvins, and Khotans) constitute about 4% of Mongolia's population, and the rest are Tungusic-speakers. Most Russians left the country following the withdrawal of economic aid and collapse of the Soviet Union in 1991.
Traditionally, Buddhist Lamaism was the predominant religion. However, it was suppressed under the communist regime until 1990, with only one showcase monastery allowed to remain. Since 1990, as liberalization began, Buddhism has enjoyed a resurgence. About 4 million ethnic Mongols live outside Mongolia; about 3.4 million live in China, mainly in the Inner Mongolia Autonomous Region, and some 500,000 live in Russia, primarily in Buryatia and Kalmykia.
Ethnic Groups: Mongol (mostly Khalkha) 94.9%, Turkic (mostly Kazakh) 5%, other (including Chinese and Russian) 0.1% (2000)
0-14 years: 27.3% (male 437,241/female 419,693)
15-64 years: 68.7% (male 1,074,949/female 1,076,455)
65 years and over: 4% (male 54,415/female 70,565) (2011 est.)
Population Growth Rate: 1.469% (2012 est.)
Birthrate: 20.7 births/1,000 population (2012 est.)
Death Rate: 6.01 deaths/1,000 population (July 2012 est.)
Net Migration Rate: 0 migrant(s)/1,000 population (2012 est.)
Life Expectancy at Birth: 68.63 years
male: 66.16 years
female: 71.23 years (2012 est.)
Total Fertility Rate: 2.19 children born/woman (2012 est.)
Languages: Khalkha Mongol 90%, Turkic, Russian (1999)
Literacy (age 15 and over can read and write): 97.8% (2000 census)
Urbanization: 62% of total population (2010) growing at an annual rate of change of 1.9% (2010-15 est.)
The rugged and remote Altai Mountains (running diagonally from the upper left to lower right of the image) tower over the surrounding basin of desert, steppe, forest, and taiga ecosystems. The large lake at the top of the image is Uvs Nuur, which is approximately the size of Rhode Island. This part of the country is sparsely populated inhabited mostly by Kazakhs, who are Muslim and speak a Turkic language; the majority of the population of the rest of Mongolia are Buddhists who speak Mongolian and Russian. Most Mongolians that live outside of the few cities are nomadic and live in gers (sometimes called yurtas), or large tents with wooden frames. Western Mongolia is renowned for its endangered and rare species, including lynx, argarli sheep and snow leopards. The region is seismically active, with numerous hot springs and frequent earthquakes. The two red dots in this image signify grassland fires just over the border in Northern China. Source: NASA, Jeff Schmaltz
In 1206 AD, a single Mongolian state was formed based on nomadic tribal groupings under the leadership of Chinggis ("Genghis") Khan. He and his immediate successors conquered nearly all of Asia and European Russia and sent armies as far as central Europe and Southeast Asia. Chinggis Khan's grandson Kublai Khan, who conquered China and established the Yuan dynasty (1279-1368 AD), gained fame in Europe through the writings of Marco Polo.
Although Mongol-led confederations sometimes exercised wide political power over their conquered territories, their strength declined rapidly after the Mongol dynasty in China was overthrown in 1368. The Manchus, a tribal group which conquered China in 1644 and formed the Qing dynasty, were able to bring Mongolia under Manchu control in 1691 as Outer Mongolia when the Khalkha Mongol nobles swore an oath of allegiance to the Manchu emperor. The Mongol rulers of Outer Mongolia enjoyed considerable autonomy under the Manchus, and all Chinese claims to Outer Mongolia following the establishment of the republic have rested on this oath. In 1727, Russia and Manchu China concluded the Treaty of Khiakta, delimiting the border between China and Mongolia that exists in large part today.
Outer Mongolia was a Chinese province (1691-1911), an autonomous state under Russian protection (1912-19), and again a Chinese province (1919-21). As Manchu authority in China waned, and as Russia and Japan confronted each other, Russia gave arms and diplomatic support to nationalists among the Mongol religious leaders and nobles. The Mongols accepted Russian aid and proclaimed their independence of Chinese rule in 1911, shortly after a successful Chinese revolt against the Manchus. By agreements signed in 1913 and 1915, the Russian Government forced the new Chinese Republican Government to accept Mongolian autonomy under continued Chinese control, presumably to discourage other foreign powers from approaching a newly independent Mongolian state that might seek support from as many foreign sources as possible.
The Russian revolution and civil war afforded Chinese warlords an opportunity to re-establish their rule in Outer Mongolia, and Chinese troops were dispatched there in 1919. Following Soviet military victories over White Russian forces in the early 1920s and the occupation of the Mongolian capital Urgoo in July 1921, Moscow again became the major outside influence on Mongolia. The Mongolian People's Republic was proclaimed on November 25, 1924.
Between 1925 and 1928, power under the communist regime was consolidated by the Mongolian People's Revolutionary Party (MPRP). The MPRP left gradually undermined rightist elements, seizing control of the party and the government. Several factors characterized the country during this period: The society was basically nomadic and illiterate; there was no industrial proletariat; the aristocracy and the religious establishment shared the country's wealth; there was widespread popular obedience to traditional authorities; the party lacked grassroots support; and the government had little organization or experience.
In an effort at swift socioeconomic reform, the leftist government applied extreme measures that attacked the two most dominant institutions in the country--the aristocracy and the religious establishment. Between 1932 and 1945, their excess zeal, intolerance, and inexperience led to anti-communist uprisings. In the late 1930s, purges directed at the religious institution resulted in the desecration of hundreds of Buddhist institutions and imprisonment of more than 10,000 people.
During World War II, because of a growing Japanese threat over the Mongolian-Manchurian border, the Soviet Union reversed the course of Mongolian socialism in favor of a new policy of economic gradualism and buildup of the national defense. The Soviet-Mongolian army defeated Japanese forces that had invaded eastern Mongolia in the summer of 1939, and a truce was signed setting up a commission to define the Mongolian-Manchurian border in the autumn of that year.
Following the war, the Soviet Union reasserted its influence in Mongolia. Secure in its relations with Moscow, the Mongolian Government shifted to postwar development, focusing on civilian enterprise. International ties were expanded, and Mongolia established relations with North Korea and the new communist governments in Eastern Europe. It also increased its participation in communist-sponsored conferences and international organizations. Mongolia became a member of the United Nations in 1961.
In the early 1960s, Mongolia attempted to maintain a neutral position amidst increasingly contentious Sino-Soviet polemics; this orientation changed in the middle of the decade. Mongolia and the Soviet Union signed an agreement in 1966 that introduced large-scale Soviet ground forces as part of Moscow's general buildup along the Sino-Soviet frontier.
During the period of Sino-Soviet tensions, relations between Mongolia and China deteriorated. In 1983, Mongolia systematically began expelling some of the 7,000 ethnic Chinese in Mongolia to China. Many of them had lived in Mongolia since the 1950s, when they were sent there to assist in construction projects.
Until 1990, the Mongolian Government was modeled on the Soviet system; only the communist party--the MPRP--officially was permitted to function. After some instability during the first 2 decades of communist rule in Mongolia, there was no significant popular unrest until December 1989. Collectivization of animal husbandry, introduction of agriculture, and the extension of fixed abodes were all carried out without perceptible popular opposition.
The birth of perestroika in the former Soviet Union and the democracy movement in Eastern Europe were mirrored in Mongolia. The dramatic shift toward reform started in early 1990 when the first organized opposition group, the Mongolian Democratic Union, appeared. In the face of extended street protests in subzero weather and popular demands for faster reform, the politburo of the MPRP resigned in March 1990. In May, the constitution was amended, deleting reference to the MPRP's role as the guiding force in the country, legalizing opposition parties, creating a standing legislative body, and establishing the office of president.
Mongolia's first multi-party elections for a People's Great Hural were held on July 29, 1990. The MPRP won 85% of the seats. The People's Great Hural first met on September 3 and elected a president (MPRP), vice president (SDP--Social Democrats), prime minister (MPRP), and 50 members to the Baga Hural (small Hural). The vice president also was chairman of the Baga Hural. In November 1991, the People's Great Hural began discussion on a new constitution, which entered into force February 12. In addition to establishing Mongolia as an independent, sovereign republic and guaranteeing a number of rights and freedoms, the new constitution restructured the legislative branch of government, creating a unicameral legislature, the State Great Hural (SGH).
The 1992 constitution provided that the president would be elected by popular vote rather than by the legislature as before. In June 1993, incumbent Punsalmaagiyn Ochirbat won the first popular presidential election running as the candidate of the democratic opposition. In May 2009, Tsakhiagiin Elbegdorj defeated Nambaryn Enkhbayar in the first instance in Mongolia of an incumbent losing a presidential election. This was also the first election as president of a Democratic Party candidate.
Chronology of Mongolian History 1921-Present
March 13, 1921: Provisional People's Government declared independence of Mongolia.
May 31, 1924: U.S.S.R. signed agreement with Peking government, referring to Outer Mongolia as an "integral part of the Republic of China," whose "sovereignty" therein the Soviet Union promised to respect.
May-September 16, 1939: Large scale fighting took place between Japanese and Soviet-Mongolian forces along Khalkhyn Gol on Mongolia-Manchuria border, ending in defeat of the Japanese expeditionary force. Truce negotiated between U.S.S.R. and Japan.
July 1944: Vice President Henry A. Wallace became the highest-ranking U.S. Government official to visit Mongolia.
October 6, 1949: Newly established People's Republic of China accepted recognition accorded Mongolia and agreed to establish diplomatic relations.
October 1961: Mongolia became a member of the United Nations.
January 27, 1987: Diplomatic relations established with the United States.
December 1989: First popular reform demonstrations. Mongolian Democratic Association organized.
January 1990: Large-scale demonstrations demanding democracy held in sub-zero weather.
March 2, 1990: Soviets and Mongolians announced that all Soviet troops would be withdrawn from Mongolia by 1992.
May 1990: Constitution amended to provide for multi-party system and new elections.
July 29, 1990: First democratic elections held.
September 3, 1990: First democratically elected People's Great Hural took office.
February 12, 1992: New constitution went into effect.
April 8, 1992: New election law passed.
June 28, 1992: Election for the first unicameral legislature (State Great Hural).
June 6, 1993: First direct presidential election.
June 30, 1996: Election resulted in peaceful transition of power from former communist party to coalition of democratic parties. From 1998-2000, four prime ministers and a series of cabinet changes. In early 2000, Democratic Coalition dissolved.
July 2, 2000: Election resulted in victory for the former communist Mongolian People's Revolutionary Party (MPRP); first-past-the-post electoral system enabled MPRP, with 52% of the popular vote, to win 95% of the parliamentary seats; formation of new government by Prime Minister N. Enkhbayar.
June 27, 2004: Motherland-Democracy Coalition formed in early 2004 to contest the parliamentary election. Election resulted in roughly 50/50 split of parliamentary seats between former communist party and democratic opposition and formation of new government by Prime Minister Ts. Elbegdorj (Democratic Party).
November 2005: George W. Bush became the first U.S. president to visit Mongolia.
January 2006: MPRP ministers resigned from the government, and the government dissolved. A new coalition government was formed, led by the MPRP with the participation of four smaller parties.
October 2007: MPRP ousted its leader, Prime Minister M. Enkhbold, who resigned as Prime Minister. The new leader of the MPRP, Sanjaagiin Bayar, became Prime Minister and formed a new cabinet.
December 2007: Bayar's cabinet was approved.
July 1, 2008: Two days after parliamentary elections, and 1 day after the ruling MPRP claimed a landslide victory, a sizeable protest outside the MPRP headquarters turned violent. The MPRP headquarters was burned beyond repair and clashes between civilians and security forces left at least five people dead, 13 missing, hundreds injured and hundreds in police detention. President N. Enkhbayar declared a 4-day state of emergency, imposing a curfew, a ban on public gatherings, and a broadcast-news blackout (apart from the state broadcaster).
July and August 2008: Newly elected members of parliament from the opposition Democratic Party refused to take the oath of office, demanding, among other things, that the nine-member General Election Commission resign for alleged electoral irregularities.
May 2009: Former Prime Minister and Democratic Party legislator Tsakhiagiin Elbegdorj was elected as President of Mongolia in free and fair elections.
October-November 2009: Prime Minister Sanjaagiin Bayar resigned for health reasons, and Foreign Minister Sukhbaatariin Batbold was selected as Prime Minister. Prime Minister Batbold largely retained former Prime Minister Bayar's cabinet, with only a few changes.
December 2010: The MPRP changed its name to the Mongolian People's Party (MPP).
June 2011: Former President Enkhbayar founded a new party with the name “MPRP” in response to the MPP’s decision to drop the word “Revolutionary.”
August 2011: Vice President Joseph R. Biden visited Ulaanbaatar to commend Mongolia on its democratic tradition and contributions to international peace and security, and to pursue more robust economic ties between the United States and Mongolia.
Ulan Bator, Mongolia was initially founded as a Buddhist monastic centre in 1639. It is the capital and largest city of Mongolia with a population of just over one million. It is located at the junction of the Tuul and Selbe rivers in the north-central Mongolia.
In this image Ulan Bator is a silvery-grey. The city is surrounded by hills, mountains, and bare ground that appear various shades of brown and tan. Vegetation appears in dark green and areas shaded by mountains appear black.
This Landsat 5 image was acquired on May 20, 2007. Source: NASA GSFC Landsat/LDCM EPO Team
As the supreme government organ, the SGH is empowered to enact and amend laws, determine domestic and foreign policy, ratify international agreements, and declare a state of emergency. The SGH meets semiannually for 3-4 month sessions. SGH members elect a chairman and vice chairman who serve 4-year terms. SGH members have been popularly elected by district to 4-year terms. The SGH sits for the full 4 years until a subsequent parliamentary election and cannot be dissolved. In December 2011 the SGH adopted an election reform law to create 48 directly elected mandates in parliament and determine the remaining 28 seats via party lists. Parliamentary elections are next scheduled for June 24, 2012.
The president is the head of state, commander in chief of the armed forces, and head of the National Security Council. He is popularly elected by a national majority for a 4-year term and limited to two terms. The constitution empowers the president to propose a prime minister, call for the government's dissolution in consultation with the SGH chairman, initiate legislation, veto all or parts of legislation (the SGH can override the veto with a two-thirds majority), and issue decrees, which become effective with the prime minister's signature. In the absence, incapacity, or resignation of the president, the SGH chairman exercises presidential power until inauguration of a newly elected president. The president may also declare a state of emergency if the SGH is in recess and cannot be summoned in a timely manner; the SGH may then, upon reconvening, revoke such a declaration of emergency within 7 days of its issuance.
The government, headed by the prime minister, has a 4-year term. The prime minister is nominated by the president and confirmed by the SGH. Under constitutional changes made in 2001, the president is required to nominate the prime ministerial candidate proposed by a party or coalition with a majority of members of the SGH. The prime minister chooses a cabinet, subject to SGH approval. Dissolution of the government occurs upon the prime minister's resignation, the simultaneous resignation of half the cabinet, or after an SGH vote for dissolution.
Local hurals are elected by the 21 aimags (provinces) and by the nine districts of the capital, Ulaanbaatar. On the next lower administrative level, legislative bodies are elected by the provincial subdivisions (“soums”) and by the urban sub-districts (“khoroos”) of Ulaanbaatar’s nine districts.
Government Type: parliamentary
Capital: Ulaanbaatar - 949,000 (2009)
View on UlaanBaatar 2009. Source: Brücke-Osteuropa/Wikimedia Commons
Administrative divisions: 21 provinces (aymguud, singular - aymag) and 1 municipality* (singular - hot);
Independence Date: 11 July 1921 (from China)
Legal System: Mongolia accepts compulsory International Court of Justice (ICJ) jurisdiction; and accepts International criminal court (ICCt) jurisdiction.
The 1992 constitution empowered a General Council of Courts (GCC) to select all judges and protect their rights. The Supreme Court is the highest judicial body. Supreme Court justices are nominated by the GCC and confirmed by the president; the SGH must be made aware of the nominations but cannot block them. The Supreme Court is constitutionally empowered to examine all lower court decisions upon appeal and provide official interpretations on all laws except the constitution.
Specialized civil and criminal courts exist at all levels and are subject to Supreme Court supervision. Administrative courts exist at the province and city levels only and are also subject to Supreme Court supervision. Local authorities--district and city governors--ensure that these courts abide by presidential decrees and SGH decisions. At the apex of the judicial system is the Constitutional Court, which consists of nine members, including a chairman, appointed for 6-year terms, whose jurisdiction extends solely over the interpretation of the constitution.
Based on a tradition going back to the era of Chinggis Khan, the government of Mongolia expresses public commitment to restoring and protecting its natural resources. As a result of rapid urbanization and industrial growth policies under the socialist regime--particularly resource extraction--Mongolia's environment has been severely damaged. Protecting what remains has policy priority over reclaiming damaged land, although the government recently created a special restoration fund financed by polluter fees.
In 2010 the World Health Organization (WHO) identified Ulaanbaatar as having “the world’s worst air pollution,” with pollutant levels ranging from 10 to 121 times greater than WHO guidelines. The two primary sources of the pollution are the burning of soft coal (or any waste materials) for heating and cooking in inefficient stoves and coal-fired thermal power plants. Road traffic and process emissions from the brick and construction industries are other major contributors to the problem. In 2011 parliament passed the Law on Air Pollution Reduction in the Capital City, and significant efforts--including energy-efficient building and sustainable energy projects to reduce reliance on aging power plants--are underway to reduce air pollution by 50% in 2012.
Climate change has been identified by the Government of Mongolia as the most serious environmental issue facing the country. The annual mean temperature of Mongolia has increased three times more than the global average, and the frequency of extreme high temperatures has increased. The resulting desertification has significant consequences for Mongolia’s agriculture industry and the traditional nomadic herding lifestyle. Overgrazing by herders attempting to increase their incomes also is a significant contributor to desertification.
Mongolia’s water issues revolve around water management. An anticipated doubling of GDP over the next decade will shift the balance between user groups and potentially lead to degradation of both surface and ground water quality and quantity. The economic growth will be driven by large-scale mining projects primarily in the water-scarce south Gobi region; these will require large amounts of water for operations (primarily from underground aquifers) and to meet the needs of a large influx of employees. A plan to expand agricultural crop production combined with poor soil quality will lead to widespread use of fertilizer, which could potentially further degrade water quality.
International Environmental Agreements
Mongolia is party to international agreements on: Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Endangered Species, Environmental Modification, Hazardous Wastes, Law of the Sea, Ozone Layer Protection, Ship Pollution, Wetlands, and Whaling.
Total Renewable Water Resources: 34.8 cu km (1999)
Freshwater Withdrawal: 0.44 cu km/yr (20% domestic, 27% industrial, 52% agricultural)
Per Capita Freshwater Withdrawal:166 cu m/yr (2000)
Agricultural products: wheat, barley, vegetables, forage crops; sheep, goats, cattle, camels, horses
Irrigated Land: 840 sq km (2008)
Natural Resources: oil, coal, copper, molybdenum, tungsten, phosphates, tin, nickel, zinc, fluorspar, gold, silver, iron
Economic activity in Mongolia has traditionally been based on herding and agriculture, although development of extensive mineral deposits of copper, coal, molybdenum, tin, tungsten, and gold have emerged as a driver of industrial production. Soviet assistance, at its height one-third of GDP, disappeared almost overnight in 1990-91 at the time of the dismantlement of the U.S.S.R., leading to a very deep recession. Economic growth returned due to reform embracing free-market economics and extensive privatization of the formerly state-run economy. Severe winters and summer droughts in 2000-2001 and 2001-2002 resulted in massive livestock die-off and anemic GDP growth of 1.1% in 2000 and 1% in 2001. This was compounded by falling prices for Mongolia's primary-sector exports and widespread opposition to privatization. Growth improved to 4% in 2002, 5% in 2003, 10.6% in 2004, 6.2% in 2005, and 7.5% in 2006. Because of a boom in the mining sector, Mongolia had high growth rates in 2007 and 2008 (9.9% and 8.9%, respectively). Due to the severe 2009-2010 winter, Mongolia lost 9.7 million animals, or 22% of total livestock. This immediately affected meat prices, which increased twofold; GDP dropped 1.6% in 2009. Growth began anew in 2010, with GDP increasing 25.3% over 2009 as Mongolia emerged from the economic crisis. GDP growth in 2011 was expected to reach 16.4%. However, inflation continued to erode GDP gains, with an average rate of 12.6% expected in Mongolia at the end of 2011 and higher rates anticipated in 2012 as the government increases transfer and spending programs prior to the June 2012 parliamentary elections.
Besides mining (21.8% of GDP) and agriculture (16% of GDP), dominant industries in the composition of GDP are wholesale and retail trade and service, transportation and storage, and real estate activities. Mongolia's economy continues to be heavily influenced by its neighbors. For example, Mongolia purchases nearly all of its petroleum products from Russia. China is Mongolia's chief export partner and a main source of the "shadow," or "gray," economy. The gray--largely cash--economy is estimated to be at least one-third the size of the official economy, but actual size is difficult to quantify since the money does not pass through the hands of tax authorities or the banking sector. Remittances from Mongolians working abroad, both legally and illegally, constitute a sizeable portion. Money laundering is growing as an accompanying concern. Mongolia, which joined the World Trade Organization in 1997, is the only member of that organization to not be a participant in a regional trade organization. Mongolia seeks to expand its participation and integration into Asian regional economic and trade regimes.
Because of Mongolia's remoteness and natural beauty, the tourism sector offers potential for growth. Prior to the onset of the global economic crisis, spiking international commodity prices led to a surge of international interest in investing in Mongolia's minerals sector despite the absence of a policy environment firmly conducive to private investment; the end of the crisis brought a return of the attention of foreign investors. How effectively Mongolia mobilizes private international investment around its comparative advantages (mineral wealth, small population, and proximity to China and its burgeoning markets) will ultimately determine its success in sustaining rapid economic growth. Tax reforms enacted on January 1, 2007 and other mining policies helped government revenues jump 33% in 2007. Meanwhile, major amendments to the minerals law allowed the government to take an equity stake in major new mines. Major development slowed in late 2007 and early 2008 as Mongolia's parliament proved unwilling to move on major deals and declined to reform mining laws that observers said substantially varied from best practices. This frustrated many foreign and domestic investors and others who hoped to see Mongolia's promising mining sector grow rapidly. In 2009, sharp drops in commodity prices and the effects of the global financial crisis began to be felt in Mongolia's economy. The local currency dropped some 40% against the U.S. dollar, and two of the 16 commercial banks were taken into receivership, but a series of quick and effective moves, including a Stand-By Arrangement with the International Monetary Fund (IMF), helped maintain stability and kicked off a broad discussion on fiscal and financial reforms. That program concluded successfully in late 2010, but both the IMF and World Bank later criticized Mongolia for returning to potentially dangerous pro-cyclical policies in 2011, with fiscal spending likely to rise prior to the 2012 elections.
In summer 2009 the government negotiated an “Investment Agreement” with Rio Tinto and Ivanhoe Mines to develop the Oyu Tolgoi copper and gold deposit. On August 25, 2009, parliament passed four laws--one repealing the windfall profits tax, one adjusting corporate tax structures to accommodate large-scale projects, and two involving infrastructure--necessary to allow the signing of the deal. The deal was concluded in a gala signing ceremony on October 6, 2009, and the agreement went into full legal force 6 months later, on April 6, 2010. Although certain parliamentarians called for elements of the agreement to be renegotiated in late 2011, the Mongolian Government stood by the original investment agreement.
The economy grew 6.1% in 2010, largely on the strength of exports to nearby countries, and international reserves reached $1.6 billion in September, an all time high for Mongolia. Mongolia's economy continues to be heavily influenced by its neighbors. Mongolia purchases 95% of its petroleum products and a substantial amount of electric power from Russia, leaving it vulnerable to price increases.
Trade with China represents more than half of Mongolia's total external trade - China receives more than three-fourths of Mongolia's exports. Remittances from Mongolians working abroad are sizable, but have fallen due to the economic crisis; money laundering is a growing concern.
Mongolia joined the World Trade Organization in 1997 and seeks to expand its participation in regional economic and trade regimes.
GDP: (Purchasing Power Parity): $13.28 billion (2011 est.)
GDP: (Official Exchange Rate): $8.8 billion (2011 est.)
GDP- per capita (PPP): $4,500 (2011 est.)
GDP- composition by sector:
services: 56.3% (2011 est.)
Industries: construction and construction materials; mining (coal, copper, molybdenum, fluorspar, tin, tungsten, and gold); oil; food and beverages; processing of animal products, cashmere and natural fiber manufacturing
Currency: Togrog/Tugriks (MNT)