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Mongolia
Area: 1,566,500 sq km (602,829 sq mi)
Population: 2.5m (estimate) - 1.6 persons per sq km
Capital City: Ulaanbaatar (lit. 'red hero') Population: 1 million
People: 86% Khalkh Mongols, Kazakhs (6%), 8% other
Language(s): Khalkh Mongol, Kazakh
Religion(s): Tibetan Buddhism, Shamanism, Muslim (in south-west)
Currency: Togrog (MNT)
Major political parties: Mongolia has 15 political parties, but the principal ones are the Mongolian People's Revolutionary Party (MPRP), Mongolian Democratic Party (DP), Mongolian Civil Will and Republican Party (CWRP). The CWRP, DP and the New Socialist Democratic Party formed the Motherland-Democracy Coalitions to contest the June 2004 General Election. It disolved in 2005.
Government: Supreme legislative power vested in the 76-member Ikh Hural (Parliament), elected by universal adult suffrage for four years. Ikh Hural recognises the president on his election and appoints the Prime Minister (subject to the President's agreement) and members of the Cabinet, which is the highest executive body. President is the Head of State and Commander-in-Chief of the Armed Forces, and is directly elected for a term of four years.
President: Nambaryn Enkhbayar (MPRP)
Prime Minister: Miyegombo Enkhbold (MPRP)
Foreign Minister: Nyamaa Enkhbold (MPRP)
Membership of international groupings/organisations: Asian Development Bank (ADB), Asia –Europe Meeting (ASEM), Customs Co-operation Council (CCC), European Bank for Reconstruction and Development (EBRD), Economic and Social Commission for Asia and the Pacific (ESCAP), Food and Agriculture Organisation (FAO), International Atomic Energy Agency (IAEA), International Bank for Reconstruction and Development (World Bank), International Civil Aviation Organisation (ICAO), International Criminal Police Organisation (INTERPOL), International Development Association (IDA), International Finance Corporation (IFC), International Fund for Agricultural Development (IFAD), International Labour Organisation (ILO), International Monetary Fund (IMF), International Telecommunications Union (ITU), Non-Aligned Movement (NAM), United Nations (UN), United Nations Educational, Scientific and Cultural Organisation (UNESCO), United Nations Industrial Development Organisation (UNIDO), Universal Postal Union (UPU), World Health Organisation (WHO), World Intellectual Property Organisation (WIPO), World Meteorological Organisation (WMO).
GEOGRAPHYMongolia is a huge landlocked country, more than six times the size of the UK, sandwiched between Russia and China. It is also one of the highest countries in the world, with an average elevation of 1580m. Mongolia can be divided into six distinct zones including desert, steppe, mountain and taiga. The southern third of Mongolia is dominated by the Gobi Deserts (there are seven). Climatic extremes are the norm, with temperatures ranging from -30°C in winter to +40°C in summer.
HISTORYThe Mongolian State was founded in 1206 by Genghis Khan. From 1691, Mongolia was part of the Manchu Empire. After the fall of the Manchus in 1911, 'Outer Mongolia' declared independence. With Soviet help, a revolutionary government seized power in 1921 and, in 1924, the Mongolian People's Republic was established. Stalinist one-party rule by the Mongolian People's Revolutionary Party (MPRP) lasted until 1990 when, following a popular campaign of mass demonstrations calling for political and economic reform, the first multi-party elections took place.
Recent political events The fourth parliamentary elections since the introduction of multi-party democracy were held on 27th June 2004. The MPRP was widely expected to win, with the opposition Motherland Democracy Coalition (MDC) gaining an increased number of seats. Following the polling, however, the projected unofficial results showed that both the MPRP and the MDC had won 36 seats each. The Republican Party won a single seat and three independents with close ties to the Coalition won the remaining three seats.
Talks between the MPRP and the (MDC) led to an agreement to form a government of national unity. Tsakhiagiin Elbegdorj was appointed Prime Minister. The new Government was approved by Parliament and sworn in on 28 September 2004.
However, On 11 January 2006, 10 ministers of the MPRP, who formed a majority in the cabinet (10 of 18), resigned in protest at the country's domestic political course. This ended the coalition government of the MPRP, Democratic Party and other smaller parties (the MDC).
Prime Minister Ts Elbegdorj (Democratic Party) stepped down as Prime Minister and Parliament was dissolved. The MPRP subsequently gained agreement from other small political parties to form a new coalition government, with Miyegombo Enkhbold as Prime Minister. He leads the ‘National Unity Government’ which comprises Ministers from three different political parties, including the MPRP, the Motherland Party and the New National Party. In June 2006 the MPRP won a by-election giving it a majority of one seat in Parliament. But the coalition continues for now.
The transition to democracy and a market economy continues to be difficult, but Mongolia remains committed to the process and retains donor confidence. The key difficulty is the economy, where the transition to a market system has yet to make inroads on poverty and unemployment levels. The pace of reform has so far been slow.
Parliamentary election are due in June 2008 and Presidential elections in 2009.
ECONOMYBasic Economic FactsGDP: US$1.2bn
GDP per head: US$500 (2002)
Annual Growth: 1.1% (2002); 5.7% in 2003
Inflation: 1.6% (2002)
Major Industries: Mining, cashmere, agriculture
Major trading partners: China, Republic of Korea, Russia
Exchange rate: GBP £1 = 2301 Togrogs, US$1 = 1165 Togrogs
OverviewIn 1991, Mongolia embarked on an ambitious economic reform programme, following the disintegration of the USSR and the socialist trading system. Reforms included price and trade liberalisation, the reduction of lending to state owned enterprises, the creation of a commercial banking system and a massive programme of privatisation which saw the proportion of the economy in private hands rise from 4% to over 70% between 1990 and 2000. Privatisation is now almost 100% completed.
Economic performance has improved significantly in recent years. GDP growth has remained at 7% during 2005 and 2006, supported by good weather conditions, high international mineral prices, increased foreign investment in the mining sector and consumer spending supported by higher incomes and growing remittances. Industrial production is up nearly 17%, mostly driven by the mining sector but agriculture and construction are also doing well. Inflation is down to 7% and the budget is in credit at around 9% of GDP.
Agriculture still accounts for more than a fifth of GDP and around 40% of the population are nomadic herders. The mining sector accounts for a quarter of GDP and 70% of Mongolia’s exports. Other growth sectors are textiles and clothing, food processing, construction and services. The Government has identified the development of the mining, manufacturing and processing, financial services, infrastructure, ICT and tourism sectors as economic priorities.
Mongolia has been a member of the WTO since 1997. Mongolia was granted GSP+ status in July 2005 permitting much greater access to EU countries, although conditions are still not fully ready to take advantage of this. In 2006, Mongolia became an EBRD country of operation, a member of ASEM (Asia-Europe Meeting) and in addition, the European Commission has opened a Technical Office in Ulaanbaatar.
Economic challengesHowever, growth has not benefited everyone - over 30% of the population are classed by the World Bank as living in poverty, rising to over 40% in rural areas. Unemployment and growing disparities between rural and urban areas are growing concerns. In order to combat these problems, the Government has created a national development plan, the Economic Growth Support and Poverty Reduction Strategy.
In addition, there are structural weaknesses in the private sector. Newly privatised companies are often badly structured and corporate governance is weak. Although the Government has made progress in financial sector reform, the high cost of finance remains a barrier to doing business. The presence of EBRD should help ease the situation. Infrastructure is underdeveloped and the development of market-oriented institutions is at an early stage.
Mining and mineralsThere are around 6,000 deposits of 80 minerals in Mongolia , principally gold, copper, iron, tin and uranium coal and some small reserves of oil and gas. Estimates have placed the country’s gold and copper reserves as amongst the highest in the world. Exploration for oil has begun in the Gobi Desert. However, Mongolia needs outside assistance and investment in order to develop these reserves. At the same time it does not want to lose control of its natural resources to its geographical neighbours, Russia and China, either at the point of production or through monopoly customers. This concern presents Mongolia with a dilemma over the best way to attract foreign investment.
The recent steep rises in copper and gold prices have led to widespread public concern that foreign investors are making huge profits with little benefit to the people of Mongolia. The government responded to public pressure by bringing in a number of legislative changes, including a new Minerals Law to replace the more investor-friendly 1997 Minerals Law and introducing a windfall tax of 68% on gold and copper, to the dismay of foreign investors.
External tradeMain import goods included petroleum products, equipment and machinery, foodstuffs and electrical appliances whereas main export goods were gold, copper, cashmere and other goods of animal origin. The vast majority of trade is with Russia, China, followed by the United States and South Korea. Mongolia regards the UK as one of its principal European trading partners, probably second to Germany.
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