Economic Development in Mongolia

Mongolian economy has evolved rapidly in recent decades. It has a number of particular features which makes it interesting to study from a development perspective. One is the landlocked condition which limits its development potential. Another is its high dependence on a few products and natural resources like minerals, energy and agriculture. A third is the large scale of its natural resources with its low population density. This report aims to present a detailed analysis of the abovementioned aspects of the Mongolian economy and its development. It sheds light on conditions for sustainable economic development in the country. The objective is to mobilize available resources to enhance Mongolia¡¯s self-sufficiency and reduce its vulnerability and dependency on its two economically, politically and militarily powerful neighbors. This is conducted in a descriptive and simple but illustrative way. The report provides general information about the Mongolian economy and society compared with its neighbors serving as reference for investors, planners and decision-makers. The report is divided into five main parts. The first part contains a general introduction to the economy of Mongolia. The second part is on the development and the role of the key economic sectors including agriculture, industry and services. The third part elaborates on the development and role of the mining and energy sectors in the development of the economy. The fourth part is an analysis of the international economic relations and the dependence on foreign countries. The last part is on the future directions of development. This report is expected to provide a complete picture of the national economy, its evolution, current state and future possible directions and potential. The empirical and illustrative part is mainly based on data at the aggregate national level, covering the last two decades but mainly the period from 2004 to 2009.