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 declared its independence from the Manchu-led Qing Empire in 1911 and achieved limited autonomy until 1919, when it again came under Chinese control. The Mongolian Revolution of 1921 ended Chinese dominance, and a communist regime, the Mongolian People’s Republic, took power in 1924.
Northern Asia, between China and Russia
oil, coal, copper, molybdenum, tungsten, phosphates, tin, nickel, zinc, fluorspar, gold, silver, iron
Population - distribution
sparsely distributed population throughout the country; the capital of Ulaanbaatar and the northern city of Darhan support the highest population densities
Mongolian 90% (official) (Khalkha dialect is predominant), Turkic, Russian (1999)
ULAANBAATAR (capital) 1.377 million (2015)
- Conventional long form
- Conventional short form
- Local long form
- Local short form
- Mongol Uls
- Ulan Bator
- Geographic coordinates
- 47 55 N, 106 55 E
- Time difference
- UTC+8 (13 hours ahead of Washington, DC, during Standard Time)
- Daylight saving time
- +1hr, begins last Saturday in March; ends last Saturday in September
has not submitted an ICJ jurisdiction declaration; accepts ICCt jurisdiction
Foreign direct investment in Mongolia's extractive industries – which are based on extensive deposits of copper, gold, coal, molybdenum, fluorspar, uranium, tin, and tungsten - has transformed Mongolia's landlocked economy from its traditional dependence on herding and agriculture. Exports now account for more than 40% of GDP. Mongolia depends on China for more than 60% of its external trade - China receives some 90% of Mongolia's exports and supplies Mongolia with more than one-third of its imports. Mongolia also relies on Russia for 90% of its energy supplies, leaving it vulnerable to price increases. Remittances from Mongolians working abroad, particularly in South Korea, are significant.
- External debt stocks
- US$ 21,542,455,000
- Total tax rate (% of commercial profits)
- Real Interest Rate
- Manufacturing, value added (% of GDP)
- Current Account Balance
- US$ -948,455,403
- Labor Force, Total
- Employment in Agriculture
- Employment in Industry
- Employment in Services
- Unemployment Rate
- Imports of goods and services
- US$ 5,223,382,698
- Exports of goods and services
- US$ 5,666,856,674
- Total Merchandise Trade
- FDI, net inflows
- US$ 94,319,767
- Commercial Service Exports
- US$ 687,659,902
wheat, barley, vegetables, forage crops; sheep, goats, cattle, camels, horses
construction and construction materials; mining (coal, copper, molybdenum, fluorspar, tin, tungsten, gold); oil; food and beverages; processing of animal products, cashmere and natural fiber manufacturing
- copper, apparel, livestock, animal products, cashmere, wool, hides, fluorspar, other nonferrous metals, coal, crude oil
- China 84%, Switzerland 9% (2015)
- machinery and equipment, fuel, cars, food products, industrial consumer goods, chemicals, building materials, cigarettes and tobacco, appliances, soap and detergent
- China 39.9%, Russia 28.4%, Japan 6.4%, South Korea 6.2% (2015)
- Country Risk Rating
- A high-risk political and economic situation and an often very difficult business environment can have a very significant impact on corporate payment behavior. Corporate default probability is very high.
- Business Climate Rating
- The business environment is difficult. Corporate financial information is often unavailable and when available often unreliable. Debt collection is unpredictable. The institutional framework has many troublesome weaknesses. Intercompany transactions run major risks in the difficult environments rated C.
- Exploitation of colossal mineral resources
- Economy vulnerable to commodity price fluctuations
- High poverty and unemployment rates
- Internal political disputes
- Alarming level of corruption
- Very exposed to the Chinese economy
Growth continued to decline in 2016 because of slowing exports of coal and metals to China and also slower inflows of FDIs, against a background of weak commodity prices and worsening investor confidence.
In 2017, growth is expected to pick up slightly. The growth rate, will, however, remain well below the average observed between 2010 and 2014 (11.3 %). Mongolia's economy is expected to continue to be impacted by slack commodity prices, first and foremost the price of coal, and the decline in Chinese demand - the Middle Kingdom being the recipient of 90% of the country's exports. Nonetheless, the start of work on the second phase of the Oyu Tolgoi mine (one of the world's largest gold and copper reserves) should benefit the mining and construction sectors. However, foreign investment will still be limited by the challenging outlook for the mining sector, the Chinese downturn and the instability of the regulatory framework.
Meanwhile, private demand is likely to be hampered by the fiscal consolidation measures and monetary tightening (key rates raised by 450 basis points in August 2016 to 15%) introduced by the government in the second half of 2016.
Finally, subsistence agriculture based on cattle rearing remains vulnerable to climatic shocks and pandemics. In this context, in which the currency could depreciate again and oil prices increase, inflation will rise in 2017.
In 2016, the authorities revised the budget deficit sharply downwards. This adjustment is explained, in particular, by the inclusion of expenditure historically accounted for off-balance sheet. At the same time, the government has announced fiscal consolidation measures which should help the country embark on a process of deficit reduction from 2017. The country has also requested IMF support and could benefit from a loan of USD 1.5bn during 2017 in order to meet short-term repayment deadlines. However, there is very little room for maneuver on the budget, as the country is vulnerable to the volatility of budgetary resources from mining - structural reforms are needed and parliament is struggling to pass unpopular measures. As a result, the public debt will remain very high. Meanwhile, external debt has risen sharply and accounted for almost 210% of GDP in June 2016. External debt is mostly held by the private sector, with over half related to inter-company lending associated with FDIs.
Furthermore, after narrowing in 2016 because of lower imports, the current account deficit is expected to widen again in 2017. Imports of capital goods are likely to rise due to work starting on phase 2 of the Oyu Tolgoi mine. Meanwhile, despite improved relations between Rio Tinto, the main Oyu Tolgoi shareholder, and the government, FDIs will remain below potential. This is because the outlook for the mining sector is still uncertain and investors are worried about the country's financial stability. Accordingly, the tugrik will again be under downward pressure having depreciated by more than 20% since June 2016. Against this backdrop, the level of foreign exchange reserves could continue to fall, having fallen by over 53% between January 2014 and August 2016 and still representing less than 3 months of imports.
During the parliamentary elections held on 29 June 2016, the opposition (the Mongolian People's Party) won an overwhelming majority (65 out of 76 seats) and Erdenebat Jargaltulga was appointed prime minister in July. A result of popular discontent in response to the worsening economic situation, this huge majority should provide the government with relative stability, whereas previous governmental teams relied on fragile coalitions. The choice of prime minister, the former finance minister who favors operations in the country's mining sector, is testimony to the desire of the MPs to encourage foreign investment and implement more cautious economic policies.
However, governance shortcomings still form the country's Achilles heel and the risk of social tensions needs to be watched.