The level of economic development of Mongolia briefly. Mongolia is the new Asian tiger. Interest and penalties

Mongolia is a state located in East Asia, bordered by Russia, China and landlocked. Vast areas of the country, some of which are unsuitable for life, are unevenly populated. At the same time, Mongolia boasts a fast pace of economic development and a fairly high standard of living of the population. Mongolia has observer status in most international organizations.

Brief history of the state

The first attempts to establish a Mongolian state were made by disunited tribes that settled the territory of modern Mongolia 850 thousand years ago, in the 4th century BC. The Huns then united to fight the Chinese tribes and ruled the Mongolian steppe until 93 BC. Later, the Hunnic Empire was replaced by several Kyrgyz, Turkic and Mongol khanates. None of them managed to gain a foothold in the Mongol lands for a long time: a nomadic lifestyle, belligerence and insufficiently authoritative power - all this became the cause of disunity.

A more stable union of tribes went down in history as Khamag Mongol and became the basis of the future Mongol Empire led by Genghis Khan. But already from the end of the 13th century, cultural differences, the death of the strongest ruler, the endless redistribution of power and the heterogeneity of the population of the state became the reason for the beginning of the collapse of the Golden Horde.

Over the next few centuries, the Mongolian steppes were occupied by various rulers, empires and peoples: the Yuan Empire, the Northern Yuan Dynasty, the Chinese Qing Empire ruled by the Manchu Dynasty - until 1911. When the Xinhai Revolution thundered in China, putting an end to the empire, and a national revolution arose in Mongolia itself, statehood as such did not exist on the territory of modern Mongolia.

New Mongolia was recognized as an autonomous part of the Republic of China in 1915, and nine years later the independence of the state was proclaimed again (for the first time in 1911). However, until the end of World War II, the independence of Mongolia was recognized only by the USSR.

The Mongolian People's Republic was characterized by some features of Soviet power: repression, collectivization, destruction of monasteries, and later perestroika. Japan's aggression was reflected by the joint actions of the USSR and Mongolia. The modern history of Mongolia began with the adoption of a new Constitution in 1992 and a change in political course.

Government and politics

Mongolia, which has a diverse population, is a parliamentary republic. The head of state is the president, the executive branch is represented by the government, and the legislative branch is represented by the parliament, which is called the State Great Khural. Locally, power remains in the hands of local governments, which are elected for a term of four years.

In 2008, an internal political crisis occurred in Mongolia, which provoked mass unrest in the capital of the state (Ulaanbaatar) and caused a change of government and re-election of the president. Currently, the president of the state is Tsakhiagiin Elbegdorj, the ruling party is the Mongolian People's Party (MPP).

Geography of Mongolia

In terms of territory, the state ranks nineteenth in the world, being quite large. The area of ​​Mongolia is 1,564,116 km², which is comparable, for example, to half of Yakutia. Most of the country (geographically) is occupied by a plain with several towering ridges and mountain ranges. The Gobi Desert is located in the southern part of Mongolia.

All fresh water sources originate in the mountains and are fed by several large tributaries. Mongolia has a large number of lakes, many of which are temporary, that is, they form during the rainy season and disappear during drought.

The area of ​​Mongolia and the location of the state make the climate sharply continental. The average temperature in winter ranges from -25 to -35 degrees, in summer it is within the same values ​​with a plus sign. The amount of precipitation decreases from northwest to south.

Administrative division of the state

Mongolia, whose population is unevenly distributed throughout the state, is divided into 21 aimags, with a total of 329 soums, and the capital Ulaanbaatar. The largest city, as expected, is the capital, with one and a half million permanent residents. The administrative center is followed in terms of population by aimag Khuvsgel (114 thousand people), Dornogovi (109 thousand people) and Uverkhangai (100 thousand people).

A characteristic feature of Mongolia is the presence of temporary settlements, and therefore a different address system is used than the standard one. Thus, in Mongolia there are no usual names of cities, streets, house and apartment numbers, and addresses are replaced by digital codes that allow you to determine the location of an object on the ground with an accuracy of one meter. Moreover, the longer the code, the more accurately the location of the object can be determined. The system is suitable for use on a global scale and is actively used in digital cartography and navigation systems.

Economy of Mongolia

Mongolia's economy is developing extremely dynamically, and the state itself is the largest market in the entire Asia-Pacific region. According to the latest forecasts, the state's economy will grow at least 15% per year in the short term.

The main industries of Mongolia are represented by:

• mining (20% of GDP) and mineral resources;
• agriculture (16% of GDP);
• transport (13%);
• trade (also 13%).

Considering the employment of the population, it can be noted that the majority of able-bodied citizens are employed in agriculture (41%), slightly less in the service sector(29%) and trade (14%).

Mongolia imports petroleum products, equipment (both industrial and industrial) and consumer goods (the population is provided with everything necessary). The main partners in international trade are Russia, China, Japan and South Korea.

Financial sector

The Central Bank has the same functions as similar institutions in other countries. The currency of Mongolia is the Mongolian tugrik, which was introduced into circulation back in 1925. Today, the average exchange rate is: 2405 tugriks = 1 US dollar. Despite the fact that there is a national currency of Mongolia, the American dollar is also in circulation (used in almost all areas except for payment of government services) and the Russian ruble or euro, which are accepted in small shops (mainly in the capital) and markets.

By the way, prices in Mongolia pleasantly surprise tourists. You can purchase memorable souvenirs, products made from natural wool and leather, and carpets in the capital at a cost lower than in Russia. Food prices are moderate. So, lunch will cost an average of 6-7 dollars.

Population of the state: general characteristics

The population of Mongolia is characterized by monoethnicity, a predominant urban population (even despite large employment in agriculture), positive natural growth, a large number of dialects in the linguistic affiliation of the population and a diverse religious composition.

State population

The population of Mongolia as of 2015 is 3 million 57 thousand people. Residents of the capital account for one third of the total number of citizens. The nature of the settlement of citizens throughout the state will be discussed in more detail below.

Natural population growth is 28 people per 1000 citizens per year. This fact allowed the population of Mongolia to quadruple between 1950 and 2007. Back in 1918, the population of Mongolia was only 647 thousand people, and by 1969 it was already twice that. No reliable data on the number of inhabitants before 1918 has been preserved due to the difficult history of the formation of statehood, when the territories of Mongolia were part of other countries, and the indigenous population was oppressed.

Density and settlement of residents

The average population density of Mongolia is almost 2 people per square kilometer. This indicator caused the state to be placed in last place (195th line) in the list of population density of countries in the world. The most densely populated areas in Mongolia (5-6 people per square kilometer) are the Orkhon River valley and the mountainous areas of Khangai - the most habitable areas to the west of the capital.

Vast territories (40%) of the state are unsuitable for a comfortable life due to natural features. The population density is a record one person per 10-15 square kilometers, and some of the territories remain completely uninhabited.

Ethnic and national composition

Mongolia (the population is predominantly made up of representatives of the Mongolian group) is a mono-ethnic state. The dominant ethnic group is divided into several clans of Turkic origin, subethnic groups and close ethnographic groups.

In addition to the indigenous population, which totals just over 82%, the country is home to Turks, Russians and Chinese. There are only one and a half thousand Russians in Mongolia, while back in the late 80s there were as many as 20 thousand. Mostly Old Believers fled to the neighboring state to escape religious persecution in their homeland. There are currently several hundred Chinese living in Mongolia; in the 60s, the number of immigrants from China in Mongolia reached 25 thousand people.

Language and writing in Mongolia

The diversity of closely related ethnic groups predetermines minor, but still pronounced linguistic differences. State (Mongolian) includes several dialects:

• Oirat;
• directly Mongolian;
• Buryat;
• Hamnigansky.

Turkic dialects are also common:

• Kazakh;
• Tuvan;
• Tsaatan-Soyot.

Teaching in the capital of the state is also conducted in Kazakh.

In 1945, the Mongolian language was translated into Cyrillic with the addition of two more distinct letters. Old Mongolian is not used today, although attempts to restore the language have been made several times. In religious practices, Tibetan is still widely used to this day, in which works of art, religious and scientific treatises were written in past centuries.

Religious affiliation of the population

The main religion in Mongolia is modified Buddhism (53%). Moreover, in the capital the majority are Christian rather than Buddhist temples (197 versus 63). The majority of the population are atheists (38%). Religious diversity is also represented by Islam, shamanism, Christianity and some other religions.

Standard of living of the population

Mongolia, the standard of living of the population of which in most sources remains beyond the scope of the narrative, is a fairly developed state with a stable economy. There are still people in the country who lead a nomadic lifestyle, but their existence is made easier by the numerous benefits of civilization. The capital is similar to most modern cities. Thus, today Mongolia is confidently opening a “window to the big world.”

UDC 339.9(517.3)

A.P. Sukhodolov, Yu.V. Kuzmin

ECONOMY OF MONGOLIA IN THE GREATER EURASIA SYSTEM

The article presents characteristics of the modern economy of Mongolia, its problems and difficulties. The main attention is paid to the analysis of foreign economic relations of Mongolia in East Asia with the main partners in the region. Issues of foreign investment in the Mongolian economy, especially the country's raw materials sector, as well as the formation of China-Mongolia-Russia transport corridors are considered.

Key words: economy of Mongolia; raw materials; foreign investment; Russia; China; "third neighbor"; transport corridors; national interests.

A.P. Sukhodolov, Yu.V. Kuzmin

ECONOMY OF MONGOLIA IN THE SYSTEM OF GREATER EURASIA

The article presents the characteristics of the current economy of Mongolia, its problems and difficulties. The focus is on the analysis of foreign economic relations of Mongolia with its key partners in East Asia. The authors consider the issues of foreign investments into the Mongolian economy, namely the country's commodities sector and formation of the transport corridor China-Mongolia-Russia.

Keywords: Mongolia's economy; natural resources; foreign investments; Russia; China; the "third neighbor"; transport corridors; national interests.

The modern world economy has entered a zone of economic instability and reformatting. Economic data

processes and trends took explicit form and manifested themselves after 2014. Previously, they were of a hidden nature and manifested themselves in a very veiled form. For a long time, globalization seemed unshakable and eternal. The processes of globalization have become universal and have taken over the economic, political, scientific, information and cultural spheres. But it turned out that this was not so and a lot began to change.

A serious structural reform is taking place in the world, a multipolar economic order is being formed; The US attempt after the collapse of the USSR to create a unipolar world, focused on one country, one currency, one liberal economic model, failed. Countries around the world did not accept this system and clearly and directly resisted it. Attempts to impose American order in the countries of Western Asia through “color revolutions” also encountered stiff resistance and opposition. The countries of Islamic civilization have their own values, more ancient and deeper than the young American model, which is one of the Western economic models, and does not represent its best part. A social market model, which is especially successful in France, Germany, and Sweden, may be more attractive in the global economy. Unfortunately, we have to admit that it is also exhausting its economic capabilities, needs serious socio-economic adjustment and, apparently, this will happen in the coming years. In the last decade, the economic experience of Finland, Norway, and Denmark has been quite successful, where the interests of the elite and the population are harmoniously combined. Of course, these are very small countries where successful education systems, social assistance and support systems are possible in countries that are small in population and area.

Over the past 25 years, the economy of Mongolia has gone through a difficult path of transformation of the national economy from state-planned to market-based. Mass privatization of state property has been carried out in stages; now the share of the private sector is 80%. Along this path there were not only achievements, but also losses. The share of industrial production was reduced. In 1990-2003 gross industrial production declined

approximately 20%, the lowest point was in 1993 -40%. The volume of the mining industry doubled and the volume of manufacturing production decreased 2.5 times (Grayvoronsky, 2007, p. 25). The production of non-ferrous metals (copper), gold, coal, and oil is growing rapidly.

The economy of modern Mongolia is going through a difficult period of its development. The global economic crisis and the fall in demand and prices for Mongolia's raw materials (copper, coal, oil, etc.) led to a sharp reduction in company profits, employment and state budget revenues. The lack of competition for Mongolia's raw materials and purchases only by China led to a sharp decline in the price of copper, coal, and agricultural raw materials.

Mongolia's GDP growth in 2014 was 7.9%, in 2015 -2.3%. There have previously been years when GDP growth reached 14% per annum when commodity prices were stable and high.

As is known, Mongolia has large world-class coal deposits (Tavantolgoi), copper (Oyutolgoi, Erdenet), which have been developed and are already being exploited. Export of raw materials is the leading item of budget income, more than 60% of budget income. Therefore, the fall in world prices for raw materials immediately affects the economic situation of the country, the income of the population and its employment. This is the weak point of the modern Mongolian economy. This circumstance is also aggravated by the fact that the main buyer of these raw materials is one buyer - China, which enjoys a monopoly position and dictates the pricing policy on the Mongolian market. Under these conditions, diversification of the Mongolian economy (and above all the rapid development of manufacturing and knowledge-intensive sectors of the economy) and the search for new foreign economic partners on the world market is an urgent need for the stable development of modern Mongolia.

Mongolia is landlocked and this complicates its foreign economic relations. Its location between Russia and China, dependence on economic and political relations with neighboring countries seriously influence the economic situation of the nomadic country. Currently (beginning of September 2017) Mongolia is looking for options for transporting Mongolian-

of coal through the seaport of Vladivostok. This will allow you to avoid the low price offered by Chinese buyers, as it will allow you to enter alternative markets in East Asia (South Korea, Japan, etc.). It should also be noted that Mongolia has a fleet that flies under the Mongolian flag (more than 200 ships from various countries). Mongolia, within the framework of the Eastern Economic Forum in Vladivostok, addressed the issue of training Mongolian maritime specialists. The most difficult problem is railway tariffs for the transportation of goods; in this case, preferential tariffs are needed.

Mongolia was already part of the Qing Empire and the Soviet bloc, so it wanted to maintain economic and political independence. Statements about Mongolia's policy of neutrality and the practical implementation of this provision are in little agreement. Currently, Mongolia's economy is under significant economic influence from powerful China (investment, foreign trade). During the last presidential campaign, all presidential candidates emphasized the high dependence of the Mongolia economy on its southern neighbor and considered it necessary to expand Russian-Mongolian economic cooperation in order to balance relations in the Russia-Mongolia-China triangle.

Mongolia has placed and continues to place great hopes on the so-called. Mongolia’s “third neighbor” represented by the USA, Japan, South Korea, and Western European countries. Unfortunately, the scale of economic cooperation and investment is small and does not compensate for the scale of cooperation in the triangle. Modern Mongolia is actively expanding economic cooperation with countries that were not previously its active partners: Iran, the UAE, Israel, Turkey, etc. There are significant opportunities for expanding economic and scientific cooperation. For example, more than 400 Mongolian students are already studying in Turkey; in distant Australia - more than 200 students and undergraduates.

The largest and closest economic and political relations connect Mongolia with Japan and South Korea. The largest number of Mongolian migrants work and study

in South Korea, significant scientific ties between Mongolia and Japan, investment support for Mongolia also from Japan and South Korea, which are considered as close and related Asian peoples. The youth of Mongolia also gravitate toward Korean youth culture. Both countries are perceived in Mongolia as Asian countries that have achieved outstanding results.

Main economic problems: lack of investment, small population (3 million people) and its uneven distribution in the center of the country, Ulaanbaatar (1.4 million people), political instability and frequent changes of Mongolian governments (15 governments in 10 years), corruption and the export of capital.

Frequent changes of governments, changes in legislation in the field of mining and taxation in this area lead to an outflow of foreign investors and frequent lawsuits. The corruption component led to enormous social stratification of Mongolian society and social instability. The investment forum in Ulaanbaatar at the beginning of September 2017 noted the need to develop specific and stable rules for attracting foreign capital and reducing administrative obstacles.

Active mining leads to the displacement of Mongolian nomads from their traditional places of residence and the destruction of the environment. Also, desertification processes have reached threatening proportions for Mongolia. Desertification processes in Mongolia have a natural basis associated with global warming and the influence of the development of pastoralists, due to the massive breeding of livestock (80 million heads of livestock), especially Mongolian goats.

The Mongolian government and the country's scientific elite are interested in the development of the processing industry and knowledge-intensive production. Mongolian scientists and inventors offer various high-tech technologies that are supported by business and government agencies. Mongolian youth are talented and dynamic, they actively receive education at the best foreign universities, participate in scientific projects and win intellectual competitions. So, in August

ste 2017 at the Asian Games, the Mongols won 73 medals out of 90 possible awards. Over time, this can turn into quality. True, this also has a downside - the migration of talented Mongolian scientists abroad.

Mongolia's special position between two major powers: Russia and China has also acquired its economic advantages in recent years. The transformation of China into a global economic power that is interested in stable transport corridors China - Europe, the formation of the One Belt - One Road transport corridors, the new Silk Road includes Mongolia as one of the important links of these projects. The inclusion of Mongolia in the system of international railway, air and road corridors will strengthen the country's economic position in the international economy, especially in Inner Asia. Mongolia is considered as one of six options for transport corridors between China and Western Europe. Currently, a transport corridor from China through the countries of Central Asia is actively operating, which allows the Chinese side to successfully maneuver with other options and partners. In August 2017, a working meeting of representatives of transport structures of Russia, Mongolia and China was held in Ulan-Ude and it was decided to form the transport corridor Tianjin - Ulaanbaatar - Ulan-Ude in two versions: railway and road. Implementation of this Project is scheduled for early 2018. We are talking about modernizing existing roads and improving border crossings, as well as creating modern infrastructure in transit countries.

Mongolia is improving the quality of the country's railways and roads, increasing the speed of transportation, and increasing the number of border crossing points for passengers and goods. This will improve or re-create modern roads, international airports, and increase the number of modern jobs in the service and tourism sectors. Discussions also continue in Mongolia: which railways should be built in Mongolia: Russian or Chinese standards?

Construction of a new railway has begun from Erdenet to the border with Tyva; in the future, it is planned to connect it with the road along Tyva, which is just being built. This will dramatically shorten the route to Europe and reach the developed regions of Southern Siberia.

As you know, China is currently actively creating a system of transport corridors to Europe through the countries of Central Asia, partially affecting Russia. This corridor is shorter in time than the Russian Trans-Siberian Railway, and therefore indirectly increases competition. China is actively creating hubs in countries around the world, that is, warehouses for Chinese products, roads, bridges and other transport corridors necessary for the rapid delivery of Chinese goods or their production in a given territory. For example, the world's longest freight railway corridor Harbin-Hamburg was launched. Also, for example, in Belarus, near Minsk, the so-called Great Stone Industrial Park is being created, on an area of ​​80 km2. The entire project is estimated at approximately $80 billion.

High rates of economic growth in the PRC, the emergence of a number of sectors of the country's industrial production to leading positions in the world, the formation of a new transport system and logistics in Northeast Asia, including the so-called “New Silk Road”, will create significant problems and difficulties for the Russian economy, which is losing its economic position in the modern international economy, due to economic sanctions, the outflow of domestic and foreign capital from the country and the economic model of Russia’s development that is inadequate to the requirements of the time. The serious strengthening of Russia's geopolitical and military status has so far compensated for the economic bloc, but in the future this will manifest itself in an increasingly negative light.

Strategic partnership with China also has its limits; the very concept of strategic partnership is generally unacceptable for modern China. The JunGuo State (Middle State or Middle Empire) did not and still views neighboring countries and peoples as strategic partners, but only as temporary allies, and not always with equal rights.

nym. We consider this political, economic and military partnership to be tactical on China’s part until it strengthens its position to a level equal to or close to the military-geopolitical potential of the United States, for direct competition and confrontation (emphasis added by the author). The Russian side needs to specifically calculate not only the positive prospects, but also the difficulties and problems that will arise during the implementation of Projects initiated and promoted by the Chinese side.

The economic superiority of the PRC in the near future will be complemented by military-geopolitical superiority and a higher scientific level of world leadership. Expenditures on science and education in China, which are many times greater than in Russia, are already bearing their first fruits, and in the near future they will show the world real world-class scientific successes.

Russia declares economic, political and scientific interest in Russian-Mongolian cooperation, but so far this is not comparable with the size of Sino-Mongolian economic cooperation, Chinese investments and opportunities. Mongolia's economy is increasingly dependent on China. The received loans will have to be repaid in the near future; it has not yet been possible to find other buyers of Mongolian raw materials and prices for them remain low. The Chinese leadership reacted rather harshly to the Dalai Lama’s visit to Mongolia, and most importantly did not provide the promised loan of $4 billion.

In general, the position of Russia and Mongolia in the Russia-Mongolia-China triangle is in some sense quite similar, although not identical. According to the structure of their exports to China, they are suppliers of raw materials for the fast-growing Chinese economy, a kind of appendage of the economy or the periphery of the Chinese economy, which is rapidly moving towards world leadership. This cooperation is more consistent with the national and economic interests of China, and not of Russia and Mongolia. Further development in this direction will have negative consequences for the economies of Russia and Mongolia, especially the Mongolian economy, which is seriously dependent on the PRC.

The Mongolian economy needs to dramatically increase its manufacturing industry, modern technologies in agriculture, energy, and communications. Another large city must be created and developed in order to relieve the overpopulation and environmental problems of the Mongolian capital. Investing in breakthrough Mongolian technologies in certain areas (medicine, alternative energy, electronics, etc.) will make it possible to use the accumulated intellectual potential of Mongolian scientists. The intensive development of regional economic relations between Mongolia and Buryatia, Tyva, the Irkutsk region and the Trans-Baikal Territory will make it possible through joint efforts to intensify the national economy and maintain independence, and improve the quality of life of the population of Mongolia.

Sukhodolov Alexander Petrovich - Doctor of Economics, Professor, Rector, Baikal State University, 664003, Russian Federation, Irkutsk, st. Lenina, 11, e-mail: [email protected]

Kuzmin Yuri Vasilievich - Doctor of Historical Sciences, Professor, Department of World Economy and International Business, Baikal State University, 664003, Irkutsk, st. Lenina, 11, e-mail: [email protected].

Alexander P. Sukhodolov - D.Sc. in Economics, Professor, Rector, Baikal State University, 11 Lenin St., 664003, Irkutsk, the Russian Federation, e-mail: [email protected].

Yuri V. Kuzmin - DSc in History, Professor, Department of World Economy and International Business, Baikal State University, 11 Lenin St., 664003, Irkutsk, Russian Federation, e-mail: [email protected].

For 1970-2018 Mongolia's GDP at current prices increased by $12.8 billion (65.6 times) to $13.0 billion; the change occurred by $0.29 billion due to a population increase of 1.8 million, as well as by $12.5 billion due to an increase in GDP per capita by $4,012.0. The average annual GDP growth in Mongolia was $0.27 billion or 9.1%. The average annual growth of Mongolia's GDP in constant prices was 5.0%. The world share increased by 0.0094%. The share in Asia increased by 0.0024%. The minimum GDP was in 1970 ($0.20 billion). The maximum GDP was in 2018 ($13.0 billion).

For the period 1970-2018. GDP per capita in Mongolia increased by $4,012.0 (26.9 times) to $4,167.0. The average annual increase in GDP per capita at current prices was $83.6 or 7.1%.

The change in Mongolia's GDP is described by a linear correlation-regression model: y=0.23x-461.8, where y is the estimated value of Mongolia's GDP, x is the year. Correlation coefficient = 0.815. Coefficient of determination = 0.665.

Mongolia GDP, 1970

Mongolia GDP in 1970 it was equal to 0.20 billion dollars, ranked 143rd in the world and was at the level of the GDP of Mauritius (0.21 billion dollars), the GDP of Aruba (0.20 billion dollars). Mongolia's share of GDP in the world was 0.0058%.

In 1970, it was equal to 155.0 dollars, ranked 156th in the world and was at the level of GDP per capita in Comoros ($163.0), GDP per capita in Madagascar ($160.0), GDP per capita in Palestine ($158.0), GDP per capita in Afghanistan ($157.0), GDP per capita in Central African Republic ($151.0), GDP per capita in Uganda ($151.0), GDP per capita in Togo ($145.0). Mongolia's per capita GDP was $769.0 less than the world's per capita GDP ($924.0).

Comparison of the GDP of Mongolia and its neighbors in 1970. Mongolia's GDP was 99.8% less than China's GDP ($92.6 billion). Mongolia's per capita GDP was greater than China's per capita GDP ($112.0) by 38.4%.

Comparison of Mongolia's GDP and leaders in 1970. Mongolia's GDP was less than the US GDP ($1,073.3 billion) by 100%, the USSR GDP ($433.4 billion) by 100%, Germany's GDP ($215.8 billion) by 99.9%, Japan's GDP (212.6 billion dollars) by 99.9%, France's GDP (148.5 billion dollars) by 99.9%. GDP per capita in Mongolia was less than GDP per capita in the USA ($5,121.0) by 97%, GDP per capita in France ($2,853.0) by 94.6%, GDP per capita in Germany ($2,747.0) ) by 94.4%, GDP per capita in Japan ($2,026.0) by 92.3%, GDP per capita in the USSR ($1,788.0) by 91.3%.

Mongolia's GDP potential in 1970. With a GDP per capita at the same level as the US GDP per capita ($5,121.0), Mongolia's GDP would be $6.5 billion, which is 33.0 times its actual level. With a GDP per capita at the same level as the world's GDP per capita ($924.0), Mongolia's GDP would be $1.2 billion, which is 6.0 times its actual level. With a GDP per capita at the same level as East Asia's GDP per capita ($331.0), Mongolia's GDP would be $0.42 billion, which is 2.1 times its actual level. With a GDP per capita at the same level as Asia's GDP per capita ($247.0), Mongolia's GDP would be $0.32 billion, which is 59.4% higher than the actual level.

Mongolia GDP, 2018

Mongolia GDP in 2018 was 13.0 billion dollars, ranked 136th in the world and was at the level of the GDP of Madagascar (13.9 billion dollars), the GDP of Brunei (13.6 billion dollars), the GDP of Equatorial Guinea (13.3 billion dollars), GDP of Nicaragua ($13.1 billion), GDP of Niger ($12.8 billion), GDP of Armenia ($12.4 billion), GDP of the Bahamas ($12.4 billion). Mongolia's share of GDP in the world was 0.015%.

GDP per capita in Mongolia in 2018 was equal to $4,167.0, ranked 129th in the world and was at the level of GDP per capita in Jordan ($4,264.0), GDP per capita in Sri Lanka ($4,245.0), GDP per capita in Armenia ( $4,237.0), GDP per capita in Samoa ($4,216.0), GDP per capita in Algeria ($4,136.0), GDP per capita in Tuvalu ($4,079.0), GDP per capita in El Salvador ($4,064.0 dollars), GDP per capita in the Marshall Islands ($4,029.0), GDP per capita in Indonesia ($3,906.0). Mongolia's per capita GDP was $7,063.0 less than the world's per capita GDP ($11,230.0).

Comparison of GDP of Mongolia and its neighbors in 2018. Mongolia's GDP was 99.2% less than China's Russia's GDP ($1,660.5 billion). GDP per capita in Mongolia was less than GDP per capita in Russia ($11,534.0) by 63.9%, GDP per capita in China ($9,617.0) by 56.7%.

Comparison of Mongolia's GDP and leaders in 2018. Mongolia's GDP was less than the US GDP ($20,580.2 billion) by 99.9%, China's GDP ($13,608.2 billion) by 99.9%, Japan's GDP ($4,971.3 billion) by 99.7%, Germany's GDP ($3,949.5 billion) by 99.7%, UK GDP ($2,855.3 billion) by 99.5%. GDP per capita in Mongolia was less than GDP per capita in the USA ($62,981.0) by 93.4%, GDP per capita in Germany ($47,993.0) by 91.3%, GDP per capita in the UK ($42,889.0) ) by 90.3%, GDP per capita in Japan ($39,087.0) by 89.3%, GDP per capita in China ($9,617.0) by 56.7%.

Mongolia's GDP potential in 2018. With a GDP per capita at the same level as the US GDP per capita ($62,981.0), Mongolia's GDP would be $196.6 billion, which is 15.1 times its actual level. With a GDP per capita at the same level as East Asia's GDP per capita ($12,914.0), Mongolia's GDP would be $40.3 billion, which is 3.1 times its actual level. With a GDP per capita at the same level as Russia's best neighbor ($11,534.0), Mongolia's GDP would be $36.0 billion, 2.8 times its actual level. With a GDP per capita at the same level as the world's GDP per capita ($11,230.0), Mongolia's GDP would be $35.1 billion, which is 2.7 times its actual level. With a GDP per capita at the same level as Asia's GDP per capita ($7,006.0), Mongolia's GDP would be $21.9 billion, which is 68.1% higher than the actual level.

Picture. Mongolia GDP, 1970-2018

Picture. GDP per capita in Mongolia, 1970-2018

Picture. GDP growth in Mongolia, 1970-2018

Mongolia GDP by Expenditure

Money

Suffice it to say that from 2000 to 2014, Mongolia’s GDP grew more than 10 times, from 1.1 billion to 11.7 billion dollars. During the crisis year of 2009, the country's economy fell by 1.1%, and already in 2011 it grew by 17.5%. In recent years, the growth rate began to slow down, but still remained impressive. So in 2014 the growth was 9.1%.

Of course, this is the effect of not just a low, but an ultra-low base. For a long time, Mongolia was included in the low-ranking top of the poorest countries in the world. In 2000, the country's GDP per capita at purchasing power parity (PPP) was $3.3 thousand. For comparison: China in the same year had a PPP GDP per capita of $2.8 thousand, South Korea - $16.4 thousand, Russia - $10.4 thousand, USA - $36.4 thousand.

Mongolia's real neighbors were such “great” countries as Yemen, Bolivia, Congo, Turkmenistan, etc.

By 2014, Mongolia's GDP according to PPP reached $11.8 thousand, China - the same $11.8 thousand, South Korea - $35.2 thousand, Russia - $24.8 thousand, USA - $54.6 thousand.

Now Mongolia neighbors Tunisia, Egypt, Peru, and Jordan.

In 15 years, the nation has opened a window, if not into Europe, then at least into the league of civilized countries. This is a historic achievement. No exaggeration.

The Mongolian economic miracle is of a rental nature. By the mid-2000s, the sluggish export of cashmere and leather lost relevance amid the boom in the development of unique mining deposits in the south of the country. Coal, copper, gold, rare earths - all this went on sale and began to generate impressive income. With a population of less than three million, Mongolia has only proven reserves of valuable resources worth $2.75 trillion.

Thus, if the circumstances are favorable, Mongolia will face the fate of Kuwait, JSC and Qatar, where the small local population is literally drowning in money received from the export of raw materials.

However, coal and copper are still not oil, and Ulaanbaatar is far from Dubai. Prices for mining products are volatile and highly dependent on the balance of supply and demand. Now there is an excess supply on the market, but the problem with demand is that China, which is the main importer of Mongolian coal, is noticeably slowing down. The fall in prices has already affected the economy of Mongolia; the GDP growth forecast for 2015 does not exceed 5-7%.

We must understand that for Mongolia, China is both a savior and a destroyer rolled into one. Today, 87-89% of Mongolian exports go to China. Monstrous distortion. The role of an energy appendage of the Chinese Empire does not suit a significant part of the Mongolian elite. The situation is complicated by the fact that historically the Chinese and Mongols treat each other very coolly - the Chinese fought for centuries with the nomadic peoples of the northern steppes.

At the same time, China is not only the main market for Mongolian products, but also a key investor. The country's authorities are working on plans to build a network of main roads and railways that will form a single transport corridor between China, Mongolia, Russia and the countries of Central Asia, which is essentially a modern analogue of the Great Silk Road. Mongolia does not have the tens of billions of dollars needed to build such a road network. But the PRC has them.

Another problem of Mongolia is the lack of access to the world's oceans. And here again we cannot do without China, which provides Mongolia with transit to its own ports in the Yellow Sea.

A Special Economic Zone has been successfully operating on the border between Mongolia and China for several years. There is a rise in light industry here.

Let's give an example: a bicycle factory is being built on the border on the Mongolian side. Much of the investment is in China, with workers living on the Chinese side and crossing the border every morning to get to the machines. As a result, the Chinese factory produces bicycles with the “made in Mongolia” label, which allows them to be sold in Western markets at reduced tax rates. The plant is jointly owned by Chinese and Mongolian companies, which makes such a business scheme extremely beneficial for all participants in the process.

At the same time, the Mongolian establishment is gradually coming to the understanding that the rental economy oriented towards China is not a panacea for all ills. In recent years, attempts have been made to diversify the national economy. The real estate market, trade, and services are developing at a galloping pace. Ulaanbaatar in 2015 looks like a giant anthill: entire residential areas and huge shopping and entertainment malls are being built in the fields from scratch.

Local businessmen dream of turning Ulaanbaatar into a global financial center on par with Singapore, Hong Kong and Shanghai. So far these are only bold dreams, but certain progress in this direction is already visible. So in the very center of Ulaanbaatar there is a beautiful high-rise building with a proud sign: “International commercial centre”. The matter is not limited to this - the country has adopted liberal legislation that maximally protects the right to private property and business in general. Add to this a soft tax and customs regime, and we get the potential of a tempting semi-offshore country in the very center of Asia.

Power

Mongolia is a functioning parliamentary democracy. For such a poor Asian country, this is surprising, given that all of its closest neighbors follow authoritarian models. Mongolia holds free general elections, power changes regularly, and the State Great Khural exercises real control over the executive branch. To understand: the government of the country is formed by the Khural, which also has the right of veto on all key issues.

The core of political life is the constant confrontation between the two largest political parties: the socialist MPRP and the liberal DPM. Parliamentary crises occur in the country from time to time, sometimes turning into open clashes. However, somehow the local elite manages to maintain a fragile balance of power. With some reservations, we can conclude that market progressives are now in power in the country, committed to decisive reforms and further integration of the country into the river of world capitalism.

And yet, speaking about the development of Mongolia, the political risks cannot be overestimated. General direct elections in a poor agricultural country are fraught with the rise to power of populists, socialists and nationalists. The local descendant of the CPSU, the MPRP, regularly wins elections and claims dominance in the political field.

Today in Mongolia, a large-scale constitutional reform is on the agenda, which, according to the Democrats, should lead the country to some semblance of the German political model with a strong prime minister, a nominal president and a de facto two-party parliament. The success or failure of these ambitious undertakings will largely determine Mongolia's political landscape in the coming years.

On the path of reform, Mongolian progressives are not trying to reinvent the wheel. They simply take the best world examples and try to implement them, adjusted to Mongolian realities. A fairly successful anti-corruption campaign is underway in the country. In 2014, Mongolia took 80th place in Transparency International’s international corruption perception ranking, ahead of India (85th place), China (100th place) and, of course, Russia (136th place). In the not-so-distant year 2011, Mongolia was in 120th place in the ranking. As they say, feel the difference.

Mongolia has adopted an extremely strict law against the illegal enrichment of officials. Every servant of the sovereign is obliged to publish on the Internet not only a declaration of income, but also of expenses. Any purchases worth more than 3 million tugriks (about $1.5 thousand) are subject to official declaration.

New government buildings in Mongolia, including, for example, the Ulaanbaatar City Hall, are being built from glass. Demonstration of transparency of the state apparatus.

Although the complete victory over corruption is still far away. Clanism and nepotism flourish in Mongolia. The tradition of bribes and “gifts” is deeply rooted and difficult for foreigners to understand.

Nationalism is strong in Mongolia. The obvious and easily explained cult of Genghis Khan, combined with the still extremely low standard of living and archaic consciousness of the rural population, often produces an explosive effect.

Among other things, Mongolia is experiencing a very peculiar variation of the Weimar syndrome. In every museum or souvenir shop in the country, a map hangs in a place of honor, with arrows showing who, how and in what year the Mongols conquered. In private conversations with Mongolian politicians and businessmen, the refrain is an unspoken longing for the greatness lost by Timujin's descendants.

The myth of Great Mongolia from the Mediterranean to the Pacific Ocean is certainly one of the defining features of the local ethnic group and national consciousness.

Future

Mongolia is a country with big problems. A harsh climate, lack of access to the seas, an illiterate and small local population, high dependence on rental income and the favor of China, undefeated corruption, militant nationalism raising its head...

The list of troubles and threats could go on for a long time. But all this recedes before the wind of change, before the sight of a nation that is rising from its knees. Not on TV, but in reality.

You arrive in Ulaanbaatar expecting to see a large village with yurts and flocks of sheep grazing in the city center, but what you see is a stunningly colorful, rapidly growing metropolis with high-rise buildings made of glass and concrete, five-star hotels and eight-lane streets.

A breath of freedom is felt in Mongolia, brought by the life-giving movement of world capital and the political will of local reformers. This is not a figure of speech. A simple example: the Mongolian budget pays 100% of tuition if their student is admitted to the TOP 20 world universities, and 50% if they are admitted to the TOP 100. When allocating a subsidy, only one condition is set, according to which, upon completion of training, a Mongolian citizen is obliged to return to his homeland and work here for at least three years. There is an exception to this rule - a student can stay to live abroad if he is offered a high position in a Western company.

This policy is having an effect. Just five to seven years ago in Mongolia there were only a few dozen students enrolled in foreign universities, but today there are thousands. Thus, the current Prime Minister of the country, Chimadiin Saikhanbileg, was educated at George Washington University in Washington, which in itself says a lot.

Education in Mongolia is seen as a profitable investment that serves to increase GDP or increase the country's prestige in the eyes of world powers. A smart and very modern approach.

What about Russia? Nothing. The “great northern neighbor” frankly slept through the Mongolian economic and humanitarian boom.

In the SEZ on the border with China, factories and roads are being built, and in the SEZ in the area of ​​Kyakhta and Altanbulag, the wind blows garbage and desert thorns. The PRC buys everything from Mongolia - from coal to meat, and Russia cannot even arrange the import of lamb to the border Ulan-Ude and Chita. They have a market, and we have import substitution.

The USSR took 98% of Mongolia's exports, today China takes 87%.

The Mongolian generation 40+ speaks Russian with virtually no accent, and the generation 20+ learns English, Chinese, Korean, and looks at Russians as a visiting curiosity.

Even at the beginning of the 2000s, the Mongolian army was dissecting in Soviet caps with Kalashnikov assault rifles, and now special forces units, armed and equipped according to the American model, are parading along Red Square.

The abolition of the visa regime between Russia and Mongolia is an absolutely necessary and correct measure. But visas should have been abolished not now, but ten years ago. Perhaps then Mongolia’s drift towards China and the Asia-Pacific countries would not be so one-sided.

However, the abolition of visas is fruitful in any case. There is no doubt that in a year or two there will be no less Russians in Ulaanbaatar than there are Koreans or Indians. The attractiveness of the country for foreign investment is obvious and all the more relevant against the backdrop of the increasingly deteriorating economic and political situation within Russia itself. Russians are still poorly informed about the state of affairs in modern Mongolia, but with an open border this situation will change quickly.

Mongols say their country lies under the “eternal blue sky.” And today this sky is open to everyone.

Mongolia is one of the former Eastern Bloc countries with economies in transition. EconomyMongolia is mainly agricultural.

After a long period of stagnation (from 1990 to 2002, economic growth ranged from +3 to −3% per year), today the country is experiencing economic growth, which ranges from 5.3% to 10% per year; At the same time, the main growth is in the services sector, whose share has increased to almost 40% of GDP, and in the mining of copper and gold due to an increase in world market prices for them. True, the growth in recent years has not affected the poor part of the population: about 40% of Mongolia’s population lives below the poverty line, the same as in 1990. The difficult years of reforms, although they led to an increase in the share of the private sector of the economy to 80%, but further exacerbated social differences and the difference in living standards between urban and rural areas.

According to the UN World Nutrition Programme, the proportion of chronically undernourished people in Mongolia averages 43%. Infant mortality is very high. 58 out of a thousand newborns die in infancy. During the cold season, many children and teenagers huddle in heating pipe tunnels near Ulaanbaatar. The bottom of these tunnels is covered in excrement and infested with rats. Representatives of humanitarian organizations estimate that the number of people living in the tunnels is approximately 4,000 to 10,000 people.

Due to very infertile lands, long winters, low rainfall, the nomadic tradition of the population and a short growing season (only 95-100 days a year), agriculture in Mongolia is very poorly developed. However, against this background, highly specialized animal husbandry arose. At the same time, 5 types of livestock are bred here. Livestock products and the use of the physical strength of farm animals are an integral part of the nomadic lifestyle of the local population. Thus, sheep are bred for wool, milk, meat, goats for producing hides and milk, yaks for producing milk, leather, meat, and horses and camels are used as a means of transport, for transporting goods and for producing milk.

Mongolia's traditional agricultural products include meat, milk, sheep's wool and cashmere, as well as small amounts of grain, potatoes and vegetables.

Modern agriculture developed slowly in this country. The era of socialism was marked by collectivization, which began in the 1930s. By 1959, 100% of agriculture was collectivized. In 1960, its share of national income was reduced to 22.9%, but it still employed 60.8% of Mongolia's working population. After the country joined the Council for Mutual Economic Assistance in 1962, the volume of assistance to its agriculture from the USSR and other CMEA members, primarily Czechoslovakia and Hungary, increased.

In the late 1980s, agriculture still constituted a significant part of the economy of the Mongolian People's Republic. In 1985, it employed 33.8% of the working population, but generated only 18.3% of national income. The country's industries primarily processed food and timber for domestic use, and animal products such as hides and hides for export. In 1986, almost 60% of Mongolia's exports were agricultural products.

After the end of the socialist economic system, profound changes occurred regarding the ownership structure in the country's agriculture. However, its economic orientation still remains dependent on natural conditions and traditions. Thus, in 2006, 80% of income from agriculture came from livestock farming. But now 97% of livestock farming was concentrated in private hands. Subsequently, the share of agriculture and livestock farming continued to decline and in 2011 amounted to less than 20% of the gross national product (in 1995 it was 38%). However, the agricultural sector still employs a third of the country's population.

Mongolia is one of the 10 countries in the world with the largest mineral reserves, but to date only a third of them have been fully explored, and these are almost 6,000 deposits of various minerals, including coal, copper, uranium (about 2% of world reserves) , oil, gold, silver, fluorite, molybdenum, zinc and diamonds.

Deposits of copper and coal are still developed mainly by open-pit mining. This leads to large-scale changes in the landscape and corresponding consequences for the flora and fauna of the country.

The country's official unemployment rate is 2.8%, although this is likely a gross underestimate. High inflation was successfully contained after 1996, and since then its level has been around 4%. Mongolia's external debt is about US$1.86 billion.

In 2007, the volume of exports of goods in monetary terms amounted to 1.95 billion US dollars, of which 41.6% were copper concentrate, 12.1% gold, 9% zinc concentrate, 9% cashmere and 6% stone coal. They imported mainly petroleum products, machinery and equipment, various installations, automobiles, electronics and food products. In 2007, 72% of all exports went to China, followed by Canada, which accounted for 9% of Mongolia's exports.

The country's largest suppliers in the same year were Russia (34%), China (31%), Japan (6%) and South Korea (5.5%). To reduce dependence on its two immediate neighbors, Mongolia is implementing the so-called “third neighbor” policy.

Thus, the volume of trade with Germany reached 82 million euros in 2008, and there is a clear upward trend. The volume of exports to Germany amounted to 15.4 million euros, and the volume of imports from this Western European country amounted to 66.6 million euros.

There are also several agreements with the EU on trade policy, customs and textiles. In addition, Mongolia is a member of important international organizations such as the WTO, the World Bank, and the Asian Development Bank.

The country's state budget expenditures in 2009 amounted to 1.6 billion US dollars, and revenues amounted to 1.4 billion US dollars. Thus, we can talk about a budget deficit of 4.6% of GDP.

Mongolia's public debt amounted to US$1.6 billion in 2008, or 33.1% of GDP.