Mongolia country information

Although in the early 1990s the main sector was animal husbandry, the biggest turnaround over the past five years has been in the services sector where average value-added growth has been at 9.1% in 2005. The backbone of the real GDP growth has been mainly the mining and livestock sector, such as the exports of few commodities such as gold, copper, and cashmere.

In 2007, Mongolia’s GDP growth was at 9.9 %. Economic growth has been primarily driven by agriculture (which contributed 3.4 percentage points to economic growth), and services (which contributed 4.3 percentage points). In the agriculture sector, the December 2007 annual livestock census reported an increase of 15 percent of livestock from 34.8 to 40.3 mln livestock.

Mongolia is experiencing a boom in its mining sector which brings new opportunities as well as major risks. Mongolia has a range of potential world-class mineral deposits, and has attracted considerable foreign investment in exploration in recent years.

Rapid rural-urban migration, and degradation of natural resources (forests, wildlife, pasture land) are challenges, which require urgent attention. The capital city Ulaanbaatar has grown from about a quarter to nearly half the population in recent years, rapidly increasing pressure on land and water, utilities, and services and contributing to increasingly hazardous levels of air pollution. In rural areas, pastureland is being degraded due to a combination of desiccation and overgrazing. Forest and wildlife is being lost to illicit harvesting; in some areas at alarming rates.

While boosting the economy, market forces have increased the disparity between the living standards of rural and urban populations. There is a widening income gap between haves and have-nots. An estimated 33 percent of the population now lives below the poverty line.