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Mongolia-Industry





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Mongolia Index

Mongolia's lakes and rivers teem with freshwater fish. Mongolia has developed a small-scale fishing industry, to export canned fish. Little information was available on the types and the quantities of fish processed for export, but in 1986, the total fish catch was 400 metric tons in live weight.

Industry

In 1924 Mongolian industry was limited to the Nalayh coal mine, an electric power plant in Ulaanbaatar, and various handicrafts. Gross industrial output (measured in constant 1967 prices), was 300,000 tugriks. Industry developed very slowly in the first two decades of the Mongolian People's Republic, primarily because Mongolia's benefactor, the Soviet Union, provided few resources to invest in industrialization. With Soviet advice, however, Mongolia adopted an industrial strategy that was based on the exploitation of natural resources and agriculture and it has followed this strategy since. The first steps to develop industry began in the 1930s. In 1933 the Union of Artisans was organized. In 1934 the Choybalsan industrial combine, the flagship of Mongolian industry, began operating in Ulaanbaatar. The combine, a joint Mongolian-Soviet company transferred to Mongolian control in 1935, had its own power plant, cloth factories, tanneries, and wool-scouring mill that produced blankets, felt, footwear, leather coats, and soap. Coal production at Nalayh rose in the 1930s, and in 1938 the narrowgauge railroad connecting the mine with the capital's powergenerating station was completed. In 1940 industry accounted for 8.5 percent, and construction for 0.8 percent, of national income. Gross industrial output rose to 124.7 million tugriks.

Industry began to develop substantially after World War II, when Soviet aid increased and Soviet-style central planning was introduced, and, in the 1950s, when Chinese assistance started. Most industrialization occurred in Ulaanbaatar; smaller food combines and livestock-product processing plants were scattered throughout the country. In the 1950s, major projects completed with Soviet assistance included the modernization of the Choybalsan industrial combine; the expansion of production at the Nalayh coal mine; the opening of oil wells in Buyant-Uhaa (Sayn Shand); and the construction of four felt-rolling mills, a water supply plant, and leather-processing factories. Chinese aid was given primarily in the form of construction projects; Chinese laborers built roads, bridges, housing, and a hydroelectric power plant. By 1960 industry and construction accounted for 14.6 percent and 6.7 percent, respectively, of national income. Gross industrial output (in constant 1967 prices) was 676.8 million tugriks.

Industrialization took a big step forward after 1960. Largescale investment by the Soviet Union and other East European countries took place with Mongolia's entry into Comecon in 1962. This assistance enabled Mongolia to diversify industry geographically and sectorally. Major industrial centers were built at Darhan and Choybalsan in the 1960s and at Erdenet and Baga Nuur in the 1970s and the 1980s. After 1970 the scope of industry expanded beyond processing of agricultural products; exploitation of minerals developed on a large scale, and the energy and the construction industries, which supported such development, also grew. In 1970 industry and construction accounted for 22.6 percent and 5.8 percent of national income, respectively; in 1985 they accounted for 32.4 and 4.9 percent of national income, respectively. Gross industrial output (in constant 1967 prices) was 1,733.2 million tugriks in 1970 and 6,244.4 million tugriks in 1985.

In the late 1980s, industry was concentrated in several urban centers. Baga Nuur was a coal-mining and energy production center. Bor Ondor produced fluorite. Choybalsan had a coal mine, a meat-packing plant, a foodstuffs combine, and a wool-scouring mill. Darhan was close to the Sharin Gol coal mine and produced construction materials, foodstuffs, and light industrial products. Erdenet, home of the copper and molybdenum processing combine, also manufactured carpets and processed timber. Hotol was the location of major limestone deposits and a cement production center. Ulaanbaatar, the oldest industrial center, specialized in coal and energy production, food processing, livestock-product processing, and textiles (see fig. 10; fig. 11).

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Figure 11. Industry, 1985

Source: Based on information from USSR, Council of Ministers, Main Administration of Geodesy and Cartography, Mongolskaia Narodnaia Respublika, ekonomicheskaia karta dlia srednei shkoly (Mongolian People's Republic Economic Map for the Middle School), Moscow, 1985.

Changes in government organizations responsible for industry reflected the regime's efforts to spur industrial development. In 1968 the Ministry of Industry, originally established in 1938, was abolished; the Ministry of Food Industry was transformed into the Ministry of Food and Light Industries. That same year, the Ministry of Geology became the Ministry of Fuel, Power, and Geology. In 1972 the Ministry of Food and Light Industries established industrial producers' associations modeled on Soviet producers' associations. The industrial producers's asociations grouped ministry enterprises according to their specialization in clothing, flour and fodder, footwear, hides and skins, and wool. In 1976 the Ministry of Fuel, Power, and Geology was divided into the Ministry of Fuel and Power Industry and the Ministry of Geology and Mining. In 1986 the Ministry of Construction and Construction Materials Industry and the State Committee for Construction, Architecture, and Technical Control were dissolved, and the State Construction Committee was established. In December 1987, the Ministry of Forestry and Woodworking, the Ministry of Geology and Mining, the Ministry of Fuel and Power Industry, and the Ministry of Food and Light Industries were replaced by the Ministry of Agriculture and Food Industry, the Ministry of Light Industry, and the Ministry of Power, Mining Industry, and Geology. Government organizations also concerned with industry in the late 1980s were the State Construction Committee and the Ministry of Social Economy and Services, formed in 1972 to supervise handicraft production and the artels, or handicraft producers' associations.

The Ministry of Environmental Protection also was formed in 1987 out of the Forestry and Hunting Economy Section of the Ministry of Forestry and Woodworking, the State Land and Water Utilization and Protection Service of the Ministry of Agriculture, and the Main Hydrometeorological Administration of the Council of Ministers; it dealt with industrial pollution. Environmental degradation of the Hovsgol Nuur-Selenge Moron-Lake Baykal ecosystem was a concern of both Mongolian and Soviet authorities. To limit ecological damage, the Ministry of Environmental Protection took steps to close the Hatgal woolscouring mill on Hovsgol Nuur, to end shipping of gas and oil in the summer, and to cease carbon-monoxide-producing motor transportation across the ice during the winter. Plans to open the Urandosh strip mine on the banks of Hovsgol Nuur also were postponed. Other measures to alleviate environmental pollution included closing thermal power stations in Ulaanbaatar and moving industrial facilities outside the city in order to reduce air pollution. Strip mining in Mongolia--particularly at the Baga Nuur, Erdenet, and Sharin Gol mines--had created large slag heaps of concern to environmentalists. Other sources of ecological degradation were the dumping of industrial, agricultural, and household waste into small rivers and lakes.

Data as of June 1989



BackgroundThe Mongols gained fame in the 13th century when under Chinggis KHAN 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 won its independence in 1921 with Soviet backing and a Communist regime was installed in 1924. The modern country of Mongolia, however, represents only part of the Mongols' historical homeland; more Mongols live in the Inner Mongolia Autonomous Region in the People's Republic of China than in Mongolia. Following a peaceful democratic revolution, the ex-Communist Mongolian People's Revolutionary Party (MPRP) won elections in 1990 and 1992, but was defeated by the Democratic Union Coalition (DUC) in the 1996 parliamentary election. The MPRP won an overwhelming majority in the 2000 parliamentary election, but the party lost seats in the 2004 election and shared power with democratic coalition parties from 2004-08. The MPRP regained a solid majority in the 2008 parliamentary elections but nevertheless formed a coalition government with the Democratic Party. The prime minister and most cabinet members are MPRP members.
LocationNorthern Asia, between China and Russia
Area(sq km)total: 1,564,116 sq km
land: 1,553,556 sq km
water: 10,560 sq km
Geographic coordinates46 00 N, 105 00 E
Land boundaries(km)total: 8,220 km
border countries: China 4,677 km, Russia 3,543 km

Coastline(km)0 km (landlocked)

Climatedesert; continental (large daily and seasonal temperature ranges)

Elevation extremes(m)lowest point: Hoh Nuur 518 m
highest point: Nayramadlin Orgil (Huyten Orgil) 4,374 m
Natural resourcesoil, coal, copper, molybdenum, tungsten, phosphates, tin, nickel, zinc, fluorspar, gold, silver, iron
Land use(%)arable land: 0.76%
permanent crops: 0%
other: 99.24% (2005)

Irrigated land(sq km)840 sq km (2003)
Total renewable water resources(cu km)34.8 cu km (1999)
Freshwater withdrawal (domestic/industrial/agricultural)total: 0.44 cu km/yr (20%/27%/52%)
per capita: 166 cu m/yr (2000)
Natural hazardsdust storms; grassland and forest fires; drought; "zud," which is harsh winter conditions
Environment - current issueslimited natural fresh water resources in some areas; the policies of former Communist regimes promoted rapid urbanization and industrial growth that had negative effects on the environment; the burning of soft coal in power plants and the lack of enforcement of environmental laws severely polluted the air in Ulaanbaatar; deforestation, overgrazing, and the converting of virgin land to agricultural production increased soil erosion from wind and rain; desertification and mining activities had a deleterious effect on the environment
Environment - international agreementsparty to: Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Endangered Species, Environmental Modification, Hazardous Wastes, Law of the Sea, Ozone Layer Protection, Ship Pollution, Wetlands, Whaling
signed, but not ratified: none of the selected agreements
Geography - notelandlocked; strategic location between China and Russia
Population3,041,142 (July 2009 est.)
Age structure(%)0-14 years: 28.1% (male 436,391/female 418,923)
15-64 years: 67.9% (male 1,031,819/female 1,033,806)
65 years and over: 4% (male 52,430/female 67,773) (2009 est.)
Median age(years)total: 25.3 years
male: 24.9 years
female: 25.7 years (2009 est.)
Population growth rate(%)1.493% (2009 est.)
Birth rate(births/1,000 population)21.05 births/1,000 population (2009 est.)
Death rate(deaths/1,000 population)6.12 deaths/1,000 population (July 2009 est.)

Net migration rate(migrant(s)/1,000 population)NA (2009 est.)
Urbanization(%)urban population: 57% of total population (2008)
rate of urbanization: 1.2% annual rate of change (2005-10 est.)
Sex ratio(male(s)/female)at birth: 1.05 male(s)/female
under 15 years: 1.04 male(s)/female
15-64 years: 1 male(s)/female
65 years and over: 0.77 male(s)/female
total population: 1 male(s)/female (2009 est.)
Infant mortality rate(deaths/1,000 live births)total: 39.88 deaths/1,000 live births
male: 42.99 deaths/1,000 live births
female: 36.61 deaths/1,000 live births (2009 est.)

Life expectancy at birth(years)total population: 67.65 years
male: 65.23 years
female: 70.19 years (2009 est.)

Total fertility rate(children born/woman)2.23 children born/woman (2009 est.)
Nationalitynoun: Mongolian(s)
adjective: Mongolian
Ethnic groups(%)Mongol (mostly Khalkha) 94.9%, Turkic (mostly Kazakh) 5%, other (including Chinese and Russian) 0.1% (2000)

Religions(%)Buddhist Lamaist 50%, Shamanist and Christian 6%, Muslim 4%, none 40% (2004)
Languages(%)Khalkha Mongol 90%, Turkic, Russian (1999)

Country nameconventional long form: none
conventional short form: Mongolia
local long form: none
local short form: Mongol Uls
former: Outer Mongolia
Government typeparliamentary
Capitalname: Ulaanbaatar
geographic coordinates: 47 55 N, 106 55 E
time difference: UTC+8 (13 hours ahead of Washington, DC during Standard Time)
Administrative divisions21 provinces (aymguud, singular - aymag) and 1 municipality* (singular - hot); Arhangay, Bayanhongor, Bayan-Olgiy, Bulgan, Darhan-Uul, Dornod, Dornogovi, Dundgovi, Dzavhan (Zavkhan), Govi-Altay, Govisumber, Hentiy, Hovd, Hovsgol, Omnogovi, Orhon, Ovorhangay, Selenge, Suhbaatar, Tov, Ulaanbaatar*, Uvs
Constitution13-Jan-92

Legal systemblend of Soviet and German systems that employ "continental" or "civil" code; case-precedent may be used to inform judges, but all decisions must refer to the law as written; constitution ambiguous on judicial review of legislative acts; has not accepted compulsory ICJ jurisdiction

Suffrage18 years of age; universal
Executive branchchief of state: President Tsakhia ELBEGDORJ (since 18 June 2009)
head of government: Prime Minister Sukhbaatar BATBOLD (since 29 October 2009); First Deputy Prime Minister (Norov ALTANKHUYAG (since 20 September 2008); Deputy Prime Minister Miegombyn ENKHBOLD (since 6 December 2007)
cabinet: Cabinet nominated by the prime minister in consultation with the president and confirmed by the State Great Hural (parliament)
elections: presidential candidates nominated by political parties represented in State Great Hural and elected by popular vote for a four-year term (eligible for a second term); election last held 24 May 2009 (next to be held in May 2013); following legislative elections, leader of majority party or majority coalition is usually elected prime minister by State Great Hural
election results: in elections in May 2009, Tsakhia ELBEGDORJ elected president; percent of vote - Tsakhia ELBEGDORJ 51.24%, Nambaryn ENKHBAYAR 47.44%, others 1.32%

Legislative branchunicameral State Great Hural 76 seats; members elected by popular vote to serve four-year terms
elections: last held 29 June 2008 (next to be held in June 2012)
election results: percent of vote by party - NA; seats by party - MPRP 46, DP 27, others 3

Judicial branchSupreme Court (serves as appeals court for people's and provincial courts but rarely overturns verdicts of lower courts; judges are nominated by the General Council of Courts and approved by the president)

Political pressure groups and leadersother: human rights groups; women's groups
International organization participationADB, ARF, CP, EBRD, FAO, G-77, IAEA, IBRD, ICAO, ICCt, ICRM, IDA, IFAD, IFC, IFRCS, ILO, IMF, IMO, Interpol, IOC, IOM, IPU, ISO, ITSO, ITU, ITUC, MIGA, MINURCAT, MINURSO, MONUC, NAM, OPCW, OSCE (partner), SCO (observer), UN, UNCTAD, UNESCO, UNIDO, UNMIL, UNMIS, UNWTO, UPU, WCO, WFTU, WHO, WIPO, WMO, WTO
Flag descriptionthree equal, vertical bands of red (hoist side), blue, and red; centered on the hoist-side red band in yellow is the national emblem ("soyombo" - a columnar arrangement of abstract and geometric representation for fire, sun, moon, earth, water, and the yin-yang symbol)

Economy - overviewEconomic activity in Mongolia has traditionally been based on herding and agriculture. Mongolia has extensive mineral deposits. Copper, coal, gold, molybdenum, fluorspar, uranium, tin, and tungsten account for a large part of industrial production and foreign direct investment. Soviet assistance, at its height one-third of GDP, disappeared almost overnight in 1990 and 1991 at the time of the dismantlement of the USSR. The following decade saw Mongolia endure both deep recession because of political inaction and natural disasters, as well as economic growth because of reform-embracing, free-market economics and extensive privatization of the formerly state-run economy. Severe winters and summer droughts in 2000-02 resulted in massive livestock die-off and zero or negative GDP growth. This was compounded by falling prices for Mongolia's primary sector exports and widespread opposition to privatization. Growth averaged nearly 9% per year in 2004-08 largely because of high copper prices and new gold production. Until late 2008 Mongolia experienced a soaring inflation rate with year-to-year inflation reaching nearly 40% - the highest inflation rate in over a decade. In late 2008 falling commodity prices in this import-reliant country helped lower inflation but by that time, the country had begun to feel the effects of the global financial crisis. Falling prices for copper and other mineral exports have reduced government revenues and are forcing cuts in spending. The global credit crisis has stalled growth in key sectors, especially those that had been fueled by foreign investment. Mongolia's economy continues to be heavily influenced by its neighbors. Mongolia purchases 95% of its petroleum products and a substantial amount of electric power from Russia, leaving it vulnerable to price increases. Trade with China represents more than half of Mongolia's total external trade - China receives about 70% of Mongolia's exports. Remittances from Mongolians working abroad both legally and illegally are sizable but have fallen due to the economic crisis; money laundering is a growing concern. Mongolia settled its $11 billion debt with Russia at the end of 2003 on favorable terms. Mongolia, which joined the World Trade Organization in 1997, seeks to expand its participation and integration into Asian regional economic and trade regimes.
GDP (purchasing power parity)$9.499 billion (2008 est.)
$8.714 billion (2007 est.)
$7.929 billion (2006 est.)
note: data are in 2008 US dollars
GDP (official exchange rate)$5.243 billion (2008 est.)
GDP - real growth rate(%)9% (2008 est.)
9.9% (2007 est.)
8.6% (2006 est.)
GDP - per capita (PPP)$3,200 (2008 est.)
$3,000 (2007 est.)
$2,700 (2006 est.)
note: data are in 2008 US dollars
GDP - composition by sector(%)agriculture: 18.8%
industry: 38.5%
services: 42.7% (2008)
Labor force1.068 million (2008)

Labor force - by occupation(%)agriculture: 34%
industry: 5%
services: 61% (2008)
Unemployment rate(%)2.8% (2008)
3% (2007)
Population below poverty line(%)36.1% (2004)
Household income or consumption by percentage share(%)lowest 10%: 2.9%
highest 10%: 24.9% (2005)
Distribution of family income - Gini index32.8 (2002)
44 (1998)
Budgetrevenues: $1.71 billion
expenditures: $1.95 billion (2008)
Inflation rate (consumer prices)(%)28% (2008 est.)
9% (2007 est.)

Stock of money$521.2 million (31 December 2008)
$504.7 million (31 December 2007)
Stock of quasi money$1.288 billion (31 December 2008)
$1.53 billion (31 December 2007)
Stock of domestic credit$1.743 billion (31 December 2008)
$1.183 billion (31 December 2007)
Market value of publicly traded shares$412 million (31 December 2008)
$612.2 million (31 December 2007)
$112.6 million (31 December 2006)
Economic aid - recipient$159.5 million (2006)

Agriculture - productswheat, barley, vegetables, forage crops; sheep, goats, cattle, camels, horses
Industriesconstruction and construction materials; mining (coal, copper, molybdenum, fluorspar, tin, tungsten, and gold); oil; food and beverages; processing of animal products, cashmere and natural fiber manufacturing

Industrial production growth rate(%)3% (2006 est.)

Current account balance-$1 billion (2008 est.)
-$23 million (2007 est.)
Exports$2.539 billion (2008)
$1.889 billion (2007)

Exports - commodities(%)copper, apparel, livestock, animal products, cashmere, wool, hides, fluorspar, other nonferrous metals, coal
Exports - partners(%)China 74%, Canada 9.4%, Russia 3.3% (2008)
Imports$3.615 billion (2008)
$2.117 billion (2007)

Imports - commodities(%)machinery and equipment, fuel, cars, food products, industrial consumer goods, chemicals, building materials, sugar, tea
Imports - partners(%)Russia 34.1%, China 29.1%, South Korea 7.6%, Japan 7.4% (2008)

Debt - external$1.6 billion (2008)
$1.438 billion (2007)

Stock of direct foreign investment - at home$NA
Stock of direct foreign investment - abroad$NA
Exchange ratestogrog/tugriks (MNT) per US dollar - 1,267.51 (2008), 1,170 (2007), 1,165 (2006), 1,205 (2005), 1,185.3 (2004)

Currency (code)togrog/tugrik (MNT)

Telephones - main lines in use165,000 (2008)
Telephones - mobile cellular1.796 million (2008)
Telephone systemgeneral assessment: network is improving with international direct dialing available in many areas
domestic: very low fixed-line density; there are multiple mobile cellular service providers and subscribership is increasing rapidly; a fiber-optic network has been installed that is improving broadband and communication services between major urban centers with multiple companies providing inter-city fiber-optic cable services
international: country code - 976; satellite earth stations - 7
Internet country code.mn
Internet users330,000 (2008)
Airports45 (2009)
Roadways(km)total: 49,249 km
paved: 2,671 km
unpaved: 46,578 km (2008)

Military branchesMongolian Armed Forces: Mongolian Army, Mongolian Air Force; there is no navy (2009)
Military service age and obligation(years of age)18-25 years of age for compulsory military service; conscript service obligation - 12 months in land or air defense forces or police; a small portion of Mongolian land forces (2.5 percent) is comprised of contract soldiers; women cannot be deployed overseas for military operations (2006)
Manpower available for military servicemales age 16-49: 865,425
females age 16-49: 860,669 (2008 est.)
Manpower fit for military servicemales age 16-49: 706,774
females age 16-49: 740,550 (2009 est.)
Manpower reaching militarily significant age annuallymale: 28,251
female: 27,344 (2009 est.)
Military expenditures(% of GDP)1.4% of GDP (2006)
Disputes - internationalnone

Electricity - production(kWh)3.979 billion kWh (2008)
Electricity - production by source(%)fossil fuel: 100%
hydro: 0%
nuclear: 0%
other: 0% (2001)
Electricity - consumption(kWh)3.491 billion kWh (2008)
Electricity - exports(kWh)15.8 million kWh (2008)
Electricity - imports(kWh)197.5 million kWh (2008)
Oil - production(bbl/day)3,216 bbl/day (2008)
Oil - consumption(bbl/day)15,000 bbl/day (2008 est.)
Oil - exports(bbl/day)0 bbl/day (2007 est.)
Oil - imports(bbl/day)17,680 bbl/day (2008)
Oil - proved reserves(bbl)0 bbl
Natural gas - production(cu m)0 cu m (2008 est.)
Natural gas - consumption(cu m)0 cu m (2008 est.)
Natural gas - exports(cu m)0 cu m (2008)
Natural gas - proved reserves(cu m)0 cu m (1 January 2009 est.)
HIV/AIDS - adult prevalence rate(%)less than 0.1% (2007 est.)
HIV/AIDS - people living with HIV/AIDSfewer than 500 (2007 est.)
HIV/AIDS - deathsfewer than 200 (2003 est.)
Literacy(%)definition: age 15 and over can read and write
total population: 97.8%
male: 98%
female: 97.5% (2000 census)

School life expectancy (primary to tertiary education)(years)total: 13 years
male: 12 years
female: 14 years (2006)
Education expenditures(% of GDP)5% of GDP (2004)








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