Mongolia Institute for Sustainable Economic Development

Mongolia is a landlocked country bordered by Russia to the north and China to the east, south and west. With an area of more than 1.5 million square kilometers, it is the world’s seventh largest country. The southern third of Mongolia is dominated by the Gobi Desert that continues southward into China. While part of the desert is true desert, much of it is classed as desert steppe and has sufficient grass to support scattered herds of sheep, goats, and camels. Much of the rest of the country is comprised of grasslands and the southern continuation of the Russian steppes. The northern margin of Mongolia is forested with high mountain ranges. As much of the country is open, most of the area is accessible motor vehicle.

The climate in Mongolia is extreme continental. Temperatures are extreme in winter (as low as -50^oC) and summer (as high as 40^oC). In Ulaanbaatar, July is the warmest and wettest month, with an average temperature of 17^oC and an average rainfall of 76 mm, while January is the coldest and driest month, with an average temperature of -25^oC and no precipitation. Rainfall and temperature throughout Mongolia are variable depending on elevation.

Mongolia is divided into 21 aimags (provinces) that are further subdivided into 313 sums (counties). These divisions are used to govern the country and enforce laws passed by Ikh Hural, the Mongolian parliament. Ulaanbaatar, Mongolia’s capital city, is located in the north central part of the country and features Mongolia’s only international airport. The local airline, MIAT, serves about 20 domestic communities as well as international destinations and the Trans-Mongolian Railway connects to the Trans-Siberian Railway in the north and the Chinese rail system to the south.  Ulaanbaatar is by far the largest city, but other important cities include Darkhan, Erdenet, and Choibalsan.

The population of Mongolia is reported to be about 2.7 million and is relatively homogenous in terms of ethnicity, language and religion. It is also a young country with more than 60 per cent. of the population below the age of 30. Approximately one third of the Mongolian population lives in the capital city of Ulaanbaatar with a large portion of the remainder living as nomads throughout the country.  Mongolia is the world's most sparsely populated country, with a population a density of 1.7 persons per km².  About 45% of these people are nomadic, herding livestock the same way their ancestors did for thousands of years.  Nomads live in traditional felt tents called gers, which can be disassembled in two hours and moved to better pasture.  About one million people live in Ulaanbaatar, 60% in ger districts surrounding the city.

Mongolia has a very long history and is often associated with its most famous leader, Genghis Khan, who ruled during the 13th century. In 1921, Mongolia fell under the influence of the United Soviet States of Russia, which dominated the politics and economy of the country until 1990 when the country’s transition to democracy and a free market economic system began.

The Mongolian Constitution, adopted in 1992, established an elected legislature and a directly elected President. The Prime Minister is nominated by and serves on behalf of the majority party in the parliament. The Constitution enshrines the concepts of democracy, freedom of speech and judicial independence.

The first multiparty elections were held in July 1990 at which the Mongolian People’s Revolutionary Party (the ‘‘MPRP’’) became the dominant political party. While there are several other active political parties, the Democratic Party is the only true rival to the MPRP.

Since 1991, Mongolia has been making a concerted effort to implement a comprehensive economic reform program aimed at moving the country toward a free market economy. One of the primary objectives of this program has been to encourage foreign investment to stimulate economic growth and several laws have been adopted in that regard.

The economy is dominated by agriculture and mining, and mining provides circa 60% of export earnings. Tourism is a small but significant contributor to the national economy. Growth was 10.6% in 2004, 5.5% in 2005, 7.5% in 2006, and 9% in 2007 largely because of high copper prices and new gold production. Mongolia benefits from close trade links with its two largest neighbors, China and Russia.