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Business Profile
Economy: The vast bulk of Mongolia’s working population is engaged in animal herding. Otherwise, large farms (formerly state owned) produce crops for domestic consumption, principally cereals, potatoes and vegetables. Industrial activity is dominated by production of food, hides and wool, especially high-quality cashmere – much of which is consigned for export – and mining. There are large deposits of coal which meet most of Mongolia’s energy requirements, as well as copper, fluorspar, tungsten, tin, gold, lead and molybdenum, a relatively rare metal of which Mongolia is one of the world’s largest producers. The output of the copper-molybdenum mine at Erdenet accounts for around half of Mongolia’s export earnings. Further significant reserves of mineral wealth have been located but are yet to be exploited; it is fairly certain that there are other large deposits as yet undiscovered. Crude oil extraction began in 1997, but Mongolia still relies on Russia to meet most of its domestic needs. Textiles and light engineering complete Mongolia’s main economic activities.
The country suffered badly from the collapse of the former Soviet Union: while Mongolia was not a constituent part of the Soviet Union, its economy was especially dependent on the USSR, with which it did 80 per cent of its trade; most of the rest was with its fellow members of the Council for Mutual Economic Assistance (COMECON). After some initial resistance by the MPRP (Mongolia’s historic ruling party), most of the economy has been steadily transferred to the private sector. This process was still underway in 2001 when a diverse collection of two dozen enterprises was earmarked for complete or partial sale. Unfortunately, structural difficulties and an unprecedented two consecutive years of the zhud (a uniquely Mongolian climatic phenomenon associated with very severe winters) have set back the country’s economic development. Russia and China are now Mongolia’s principal trade partners and South Korea is a major investor. In 1991, Mongolia joined the IMF and World Bank; in 2000, it became a shareholder (but not a ‘country of operation’) in the European Reconstruction and Development Bank. The EBRD provides support through the Mongolian Co-operation Fund. It is also a member of the Asian Development Bank and receives aid from the EU’s technical assistance programme.
Business: Suits are recommended; mediumweight for summer, and heavyweight for winter. Translator services should be arranged prior to departure for Mongolia, although an increasing number of executives speak English, and Russian is widely spoken. Office hours: Mon-Fri 0900-1800.
Commercial Information: The following organisation can offer advice: Mongolian Chamber of Commerce and Industry, Freedom Square 1, Democracy Street 1, Ulaanbaatar 210538 (tel: (1) 327 173; fax: (1) 324 620; e-mail: info@mongolchamber.mn; website: www.mongolchamber.mn).
Conferences/Conventions: For further information, contact the Mongolian Chamber of Commerce and Industry (see Commercial Information above).
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