Mongolia's economy today. Mongolia's Economy: A Structural Analysis. Language and writing in Mongolia

UDC 338 (571.3) BAZAR BOLDBAATAR

BBK 65 (5Mo) candidate of economic sciences,

Senior Assistant of the Presidential Administration of Mongolia, Ulan Bator e-mail: [email protected]

FEATURES OF SOCIO-ECONOMIC DEVELOPMENT OF MONGOLIA IN THE TRANSITION PERIOD

The features of the socio-economic development of Mongolia in the post-socialist period, as well as trends in the development of the country's economy in the new millennium are considered. The socio-demographic problems facing the Mongolian society are characterized.

Key words: socio-economic development, economic growth, economic structure, standard of living, mortality rate, birth rate.

A characteristic feature of Mongolia, which must always be taken into account, is the geographical location between Russia and China - two great powers that have historically exerted a decisive influence on the development of economic and political processes in our country.

The country's territory is almost 1.560 million km2, and in terms of its size Mongolia ranks 17th in the world. The population of the country is over

2.6 million people.

Insufficient infrastructure development; a relatively large area combined with a low population density; severe, sharply continental climate, adversely affecting the development of agricultural production; dependence of the state of one of the key sectors of the economy - animal husbandry - on natural disasters; technological backwardness of the processing industries - all these factors had a negative impact on the general course of market reforms, increasing the tension in the national economy. The specifics of market reforms are associated with a narrow specialization of the economy and exports, a rather high energy and material consumption of production, and a relatively low competitiveness of finished products in the world market.

During the implementation of market reforms, the government of the country to stabilize

lization of the economy applied such measures of macroeconomic regulation as privatization, liberalization of foreign trade, devaluation of the national currency - the tugrik - and the encouragement of foreign investment.

The level of economic development is determined by the volume of production of GDP per capita. In order to be able to make a comparative analysis of the level of development of different countries, this indicator is calculated in US dollars. The conversion of the national currency into US dollars is carried out taking into account both the prevailing exchange rate and the purchasing power parity of the monetary unit of a given country. Using the purchasing power parity index allows one to obtain comparable characteristics of the achieved economic level, while the comparison obtained taking into account the exchange rate also reflects the influence of market factors on the value of the exchange rate. At the same time, as a rule, the currency of less developed countries is weaker in relation to the US dollar.

Although in the last five years the average growth of real GDP production was 7.3%, according to the World Bank1, which compared the level of economic development of 209 countries, Mongolia ranks 150th. For 2006, the volume of production of GDP per capita in Mongolia in terms of

BAZAR BOLDBAATAR

ley at the exchange rate amounted to about 1 thousand dollars. USA, and HDI - 0.6912, and our country is in the last indicator in 117th place among 175 countries. In terms of competitiveness index, Mongolia is gaining

3.6 points 3 out of 7 and ranks 92nd among 125 countries.

In the early 1990s. the gross domestic product has decreased significantly. The dynamics of GDP in the new millennium is described in the table.

During the transformation period, the transition from a centralized planned economy to a market economy, the economy of Mongolia, like other post-socialist countries, experienced a serious recession. But, unlike the CIS countries, this decline lasted only four years - from 1990 to 1993 Mongolia's gross domestic product declined by about 25%, while in the CIS countries - by 40-60%. In Russia, for example, the period during which there was a decrease in the volume of GDP production lasted nine years - from 1990 to 1998.

Economic growth began in 1994 in Mongolia, and by 2002 the pre-crisis level of GDP production was restored. To date, it has been exceeded by more than 30%. From this point of view, the economic

the development of Mongolia in the last decade can be considered quite satisfactory. The average annual rate of economic growth, which has been going on for 14 years, is more than 4%, and in 2003-2007. this figure reached 7%. If this trend continues, then Mongolia will slightly improve its economic and social position in comparison with other poor and developing countries, which average economic growth rates of 3.5-4.5% per year.

In industry, for the first time in 2001, a real growth of production was achieved by 15.5%. The reasons for this were an increase in the production of non-ferrous metals due to the successful operation of the Mongolian-Russian joint venture "Erdenet" and favorable weather conditions that did not cause a massive drop in livestock, as happened in 2000-2002.

The structure of the economy is poor. For example, agriculture produces about 20% of GDP, although more than 40% of the employed work in agriculture. In the gross domestic product, the share of industrial and agricultural products is approximately the same, while the share of trade and services is constantly increasing and averages 49-54%.

Dynamics of Mongolia's GDP in 2000-2005

Indicator Year

2000 2001 2002 2003 2004 2005

GDP (in prices of the given year), bln tugr 1 018.9 1 115.6 1 240.8 1 461.2 1 910.9 2 266.5

Growth,% 10.1 9.5 11.2 17.8 30.8 18.6

GDP (in 2000 prices), billion tugr 1 018.9 1 029.5 1 070.7 1 130.3 1 251.4 1 329.5

Real economic growth,% 1.1 1.0 4.0 5.6 10.7 6.2

Agriculture -15.9 -18.3 -12.4 +4.9 +17.7 +7.7

Industry +0.3 +15.5 +3.8 +4.8 +15.0 -0.9

Trade and services 15.3 6.1 11.6 6.1 6.3 9.1

GDP (in prices of the given year), mln USD USA 946.6 1,016.3 1 117.5 1,274.5 1,612.1 1,880.4

GDP deflator 9.0 8.4 6.9 11.6 18.1 11.6

GDP per capita, thousand tugr 462.2 460.1 504.6 586.9 758.7 888.4

GDP per capita, USD USA 396.0 419.1 454.5 511.9 640.1 737.0

GDP structure,% 100.0 100.0 100.0 100.0 100.0 100.0

Agriculture 37.0 29.1 24.9 20.7 20.1 20.9

Industry 20.7 21.9 22.0 22.5 25.3 29.9

Trade and services 42.3 49.0 53.1 56.8 54.6 49.2

Source: Mongolian economy and society in 2006: statistical office of Mongolia. Ulaanbaatar, 2007.

Izvestia IGEA. 2008. No 3 (59)

It should be noted that economic growth was largely achieved due to extensive factors. Due to the increase in the population, the number of employed people also increased from 800 to 900 thousand people by almost a quarter, although the share of the employed in the total working-age population decreased from 71% in 1989 to 60% at present. So the productivity of social labor has hardly increased over the past years. If we consider the changes in the structure of production, we can see that economic growth was largely due to an increase in the production of raw materials in industry.

Another source of economic development was the accelerated expansion of trade and services, whose contribution to GDP increased over the past years from MNT 1 38 billion to 169. At the same time, the share of trade and services in the country's GDP increased from 19% in 1989 to about 49% currently.

The economic growth that has taken place in recent years has been accompanied by a low level of real income per capita, which characterizes the consumption of goods and services by the population. The main social problem of Mongolia is the poverty of the population. In the opinion of many experts, with the growth of the average income of the population, the number of the poor has not decreased recently. The poorest strata of the population include families with low wages (income) of breadwinners, pensioners and the unemployed. The largest group of the poor is families with many children. To a certain extent, poverty is generated by the low employment of the population. Of the 1.5 million people of working age, only 900 thousand are employed. Although there are over 40 thousand officially registered unemployed, there is a large hidden unemployment, and many are employed in the informal sector.

The problem of declining living standards of the population is also becoming more acute under the influence of the consequences of the demographic explosion of the 60-80s. XX century Taking into account the continuing rate of population growth in 2006, the real

New production of GDP per capita in Mongolia in comparison with 2001 increased 2 times.

Another important indicator of the standard of living is the indicator of the average life expectancy. This figure is relatively low at 65 years old, mainly due to the extremely high infant mortality rate. Of the 1,000 live births in Mongolia, 29 die before the age of one year. 4-5 times more than in developed countries.

Noteworthy is the negative trend in the dynamics of mortality in Mongolia. The mortality rate is decreasing only in the child age group - up to 14 years. In the youth group - from 15 to 24 years old - over the past decade, it has largely remained unchanged. At the same time, in the group of people of working age - from 25 to 50 years old - this indicator increased. The mortality rate of persons of retirement age has especially increased.

In Mongolia, the birth rate remains relatively high, and therefore the proportion of the youth group with a lower mortality rate, and also declining, is growing in the population. Due to this, the overall mortality rate of the population is decreasing. The number of deaths per 1,000 inhabitants of the country decreased from 8.2 in 1989 to 6.4 people at the present time. The birth rate decreased more significantly: from 35.5 to 19.1 people per 1,000 population. But, as you can see, the birth rate is three times ahead of the death rate, and thanks to this, the population of Mongolia is increasing annually by 30 thousand or more people due to its own growth. If in 1989 the population of the country was 2.1 million people, now it has exceeded 2.6 million people.

Notes (edit)

1 http: / /worldbank.org/website/external/ datastatistics /.

2 United Nations Development Program. Human Development Report 2006

3 Competitiveness Report 2005-2006 United States International Development Agency.

Izvestia IGEA 2008. No. 3 (59)

Agriculture and animal husbandry were historically considered the basis. The lands of this state, located in the southeastern part of Asia, are rich in vast deposits of natural resources. The Mongols mine copper, coal, tin and gold. The mining industry of Mongolia accounts for a significant state and economic sector, but the extraction of raw materials is not the only industry in which the population of the country is involved.

History of economics

The history of industry in Mongolia dates back to 1924, the year of the proclamation of the Mongolian People's Republic. Prior to this period, there was no industry, no such thing as a working class. All that the population was engaged in was the processing of animal products, including the dressing of leather, sheepskin, rolling felt, blacksmithing and carpentry. Such types of production had handicraft features and were aimed at serving the on-farm needs of the local population. Manual production was represented by enterprises for the primary processing of wool and leather, carpentry, locksmith, blacksmith's and other workshops.

The only industry in Mongolia of that period was coal mines in the Nalaikha tract. In some regions of the country, foreigners illegally mined gold and precious metals.

In the first half of the last century, the Asian state was completely dependent on imported manufactured goods from abroad. That is why one of the primary tasks of the government of the republic was the creation of its own industrial enterprises. The young and economically immature state stood in the way of two problems: the lack of qualified personnel and material resources. The Soviet Union provided assistance in resolving these issues.

Industrial development period

In the first stages, the formation of the light and food industries of Mongolia began. The young republic of that time laid the foundation for the modern energy sector of the economy. Back in the 1920s, the widespread construction of processing enterprises began. In 1933, a brick, sawmill and mechanical factories began to work in Ulan Bator, and the first power plant was opened.

It is rather difficult to tell briefly about the industry of Mongolia. The progressive development of the light and food sectors of the economy needed a fuel and energy industry that could meet the pace of production growth. A certain leap in development was made by the coal industry of Mongolia. Most of the coal mines in Nalaikh were expanded and mechanized, and the development of new deposits began in the area of Under-Khan, Yugotszyr, Sain-Shande. The coal industry of Mongolia to a greater extent satisfied the domestic demand for solid fuel. In particular, local coal was used at the Ulaanbaatar unified power plant in 1939 and at small power plants.

In the same period, another specialization of Mongolian industry arose - metalworking enterprises, including an iron foundry. One by one, printing, paper factories, enterprises specializing in the manufacture of building materials, gold processing, etc. were erected.

Mongolia today

After the collapse of the USSR, aid from the Soviet republics, which accounted for almost a third of external GDP, stopped flowing, which led to a protracted recession in Mongolia's economy. Industries needed radical economic reforms.

The government of the country has taken a new course in the development of the country, aimed at building a market economy. In the course of the reforms, a number of radical decisions were adopted in most areas of the national economy. The state has ceased to control the pricing process. Through the liberalization of domestic and foreign economic activity, attempts were made to rebuild the banking system, the energy sector, programs for the privatization of land and the implementation of measures to attract foreign investment were developed and accepted for implementation. Mongolia participate in international tenders.

However, the reform process was stalled as a result of resistance from the communist movement and political instability caused by frequent changes of government.

The peak in the economic crisis came in 1996 after a series of natural disasters and a fall in world prices for copper and cashmere. But despite this, the next 1997 was recognized as the year of the country's economic growth. In the same year, Mongolia became a full member of the WTO. And although Russia's decision to ban the export of oil and oil products in 1999 had the most adverse effect on the state of Mongolia's economy, the country continued to move forward with confident steps.

Since 1999, by the decision of the WTO, this young and promising state has been annually provided with financial assistance by partner countries: China, Russia, South Korea, Japan. And although the economic indicators and the degree of industrial development in Mongolia can hardly be called advanced, many experts consider the economy of this country to be the most progressive in the world. In their opinion, the potential of the state is enormous, given the reserves of mineral raw materials, the development of which is still at an early stage.

The backbone of the industry: natural and labor resources

Despite the many deposits of valuable mineral raw materials, their development is not fully carried out due to numerous restrictions. In Mongolia, brown coal is mined at four deposits, and in the southern part of the country, in the region of the Taban-Tolgoi mountain range, deposits of coal have been discovered. According to preliminary data, geological reserves amount to billions of tons. There is an active development of small tungsten bowels and areas rich in fluorspar. The discovery of copper-molybdenum ores on Mount Erdenetiin-ovoo served as the basis for the creation of a mining and processing plant, around which the industrial town of Erdenet is located.

The oil industry of Mongolia has been actively developing since the middle of the last century. One of the main enterprises in this industry is the oil refinery in Sain Shanda, a city located near the border with the PRC.

Massive deposits of phosphorites were discovered near Lake Khubsugul. However, today the development of the field was suspended, not even allowing it to develop fully due to environmental hazards. It is known about the accumulation of zeolites in the bowels of the earth - Mongolia carried out searches for this material together with the USSR. However, today the extraction of these minerals of the aluminosilicate group, used in agriculture for biostimulation processes and adsorption, is practically not carried out due to a lack of funding.

The development of any Mongolia depends on labor resources. The population as of 2018 is 3.119 million people, of which about a third are citizens of working age. Part of the population (about 40%) is employed in agriculture, in industry in Mongolia - about 20%. The rest of the population works in the service sector, is engaged in private business and housekeeping. The unemployment rate is at 9%.

Food production

Briefly about the industry of Mongolia, which meets the needs of the population for food, we can say this: this sector of the economy accounts for about 40% of all production. The industry is actively developing the production of dairy and meat products. In small settlements (aimaks), numerous creameries and separator stations have been built. It should be noted that just a few decades ago Mongolia could not count on the production of commercial butter. Today it is one of the largest export positions.

Milk is the main ingredient for the food industry in Mongolia. A dairy plant operates in Ulan Bator, which processes tens of tons of milk and cream per day. All production processes at this enterprise have long been automated and mechanized. The capital dairy plant produces pasteurized dairy and sour milk products, butter, cottage cheese, sweet glazed curds, ice cream. This enterprise is the leading food processing plant in Mongolia.

Not far from Ulan Bator, there is a large meat processing plant equipped with modern technology, thanks to which the workshops of the plant demonstrate high production results. In the complex of the meat processing plant there are workshops for processing meat products, departments for the production of semi-finished products, sausages, canned food. Most of the goods in the meat processing industry are exported to other countries.

In addition to meat and dairy production, the food industry in Mongolia is represented by butter, confectionery, bakery, alcoholic beverages, fish and other industries. Several years ago, a new direction of the food industry began to develop rapidly in the republic - flour milling. Today the country meets the needs of its citizens for flour at the expense of the products of national producers. In addition to the mill in Ulan Bator, which produces more than 30 thousand tons of flour annually, there are a number of mechanized flour mills in aimags.

Industrial plant in Ulan Bator

Among the light industry factories in Mongolia, it is necessary, first of all, to note the industrial complex in the capital - this is one of the largest enterprises engaged in the processing of agricultural products. The industrial plant in Ulan Bator was built in 1934. Subsequently, this enterprise began to be called the forge of professional personnel in the industry of the times of socialism. The industrial complex consists of a complex of plants and factories equipped with modern equipment. There are wool-washing, cloth, worsted, felting-felt, shoe, saddlery and textile workshops. The Ulan Bator industrial complex also includes a chevro, chrome, sheepskin coat, tannery and other factories in its structure. The main products manufactured by the plant:

various woolen fabrics;
felt;
drape;
cloth;
footwear for all seasons;
felt boots;
camel wool blankets;
bags;
outerwear.

The products of the plant are in demand not only within the country, they are exported to other countries. The industrial plant seeks to expand the production area. With the development of this holding, its individual workshops have long acquired the status of independent enterprises.

Heavy Industry Progress

Over the past years, the country has seen positive dynamics in the development of energy, coal, oil, metalworking, mining, construction, woodworking and other industrial sectors. Average annual growth rates are higher than those in other former socialist republics. The rate of industrial growth in Mongolia surprises many economic experts, as this country, not so long ago considered the most backward, is confidently approaching the level of advanced powers.

In order to develop the main sectors of the national economy, the Mongols are striving to bring industrial production to a new level, corresponding to the world average. The government pays special attention to the creation and establishment of its own chemical-pharmaceutical, biological production, which plays a huge role in expanding the main sector of the economy - the livestock and agriculture of Mongolia. The industry, as already noted, employs approximately 20% of the working-age population, while almost 40% of the able-bodied citizens are engaged in cattle breeding, agriculture, and the cultivation of crops.

Industrialization of Mongolian cities and development of the coal industry

Briefly about the specializations and industries of Mongolia, which form the basis of the fuel and energy block of the country's economy, we can say that they are fundamental in the development of the national economy. Republic occupies the main place in this segment. Today in Mongolia, lignite and hard coal is mined at 13 large deposits. The most demanded product for export is coking and high-grade coal, which is mined in the Nalaikha region near Ulan Bator.

The coal basin of certain regions of Mongolia, in particular in the aimags of Uverhangai and Sukhe-Bator, the operating mines fully satisfy the demand for solid fuel not only in their settlements, but also in some neighboring ones. Not so long ago, new coal mines were commissioned and old enterprises were equipped with new equipment. This step naturally led to an increase in average annual production rates by more than 10-15%.

Along with coal deposits, during the development of deposits, natural reserves of ores, asbestos, limestone and other valuable raw materials are often discovered. Darkhan-Uul is considered to be one of the rapidly developing industrial centers. Here, within the Sharyn-Golsk coal basin, an industrial and energy complex is being built, which will provide coal to all spheres of the national economy and the needs of the population. That is why the Mongols call the city of Darkhan-Uul “the flower of friendship”. In the construction of this complex, significant assistance to the republic is provided by the countries of the former USSR (Russia, Kazakhstan), China, Japan, Canada. The main objects of the complex should be several large coal mining enterprises, a railway transport hub, a high-voltage power line and an elevator. Today, the process of the emergence of another economic and cultural center of Mongolia is taking place here.

Oil production, power generation

With the growth of the fuel base and industrial sectors in general, the production of electrical energy has to be brought to a new level. Until a few decades ago, electricity was not even heard in remote regions. Today, the need for electrification is explained not only by the household needs of the population, but primarily by the need for mechanization and automation of production in the country and an increase in the indicators of finished products. Local power substations operate in aimag centers.

Unlike other industrial sectors, oil refining is a relatively young specialization in the Mongolian industry. The industry is still in its infancy, but at the same time the country produces half of the gasoline for its own needs, the rest is imported.

The only major oil refining center is located in the Eastern Gobi. Not so long ago, a young city appeared here - Dzunbayan, in which infrastructure and cultural and household facilities are also located. The Eastern Gobi satisfies almost half of Mongolia's fuel needs.

In connection with the expansion of the manufacturing and processing industries, the indicators of electricity consumption in Mongolia are increasing every year, which prompts the government to consider the construction of new thermal power plants.

Mining of mineral ores and metals

The mining industry provides Mongolia with:

gold;
manganese;
tungsten;
magnetic iron ore;
lead ores;
rock crystal;
turquoise and other non-ferrous, precious metals;
salt.

Mining and processing enterprises are being built near the places of large deposits. Mongolia exports tungsten to other countries, and certain types of non-ferrous metals. Ferrous metallurgy in Mongolia is represented by a mechanical processing plant with an iron foundry in Ulaanbaatar. Agricultural equipment, hand tools, and small machinery are produced here for domestic and export sales.

Marble, limestone, asbestos, gypsum, mineral paints are mined in the republic. Extraction of raw materials of this type makes it possible to develop the industrial branch of building materials. Over the past few years, several dozen enterprises have been commissioned, including a house-building plant in Sukhbaatar. They are engaged in the production of lime, cement, bricks, slate and other construction products. Special attention should be paid to a large-panel house-building plant in the capital of Mongolia, a glass plant in Nalaikh, and a reinforced concrete and brick factories in Ulaanbaatar. The workshops use complex mechanized technologies. All enterprises are equipped with modern technology.

The production of building materials and their sale to the population at an affordable price is an important aspect for the people who were considered nomadic in the recent past. The Mongols' transition to a settled lifestyle is facilitated by the large-scale construction of comfortable houses, infrastructure facilities, and the development of a public transport network in cities and aimags.

Agrarian economy

The Ministry of Agriculture and Light Industry of Mongolia is doing everything to support the agricultural sector of the economy and create the most favorable conditions for its development. Agriculture throughout the history of this state has been at the heart of its economy. In the context of the transition to a market model, the importance of the agricultural sector has not diminished. It employs almost half of Mongolia's labor reserve, although 50-60 years ago this figure reached 80%. Agriculture provides over 40% of the total GDP. Mongols have the third largest livestock per capita in the world, behind Australia and New Zealand.

Almost until the middle of the last century, while the industry was going through the process of formation and transformation into an independent sphere, the agrarian economy remained the only production sector. Back in those days, finished products were exported, which made it possible to receive almost 60% of the national income. Over time, this share has decreased and today it is about 35-40%, and more than half of the export products are raw materials.

The most important economic indicators in this country depend on the level and rates of development of agriculture. In particular, the cost of agricultural raw materials is the main part of the cost of manufacturing goods for the light and food industries. The Ministry of Agriculture of Mongolia is constantly working on the creation of new concepts and methods that would make it possible to minimize costs and increase the productivity of finished products.

Pasture farming is the predominant economic activity that the Mongols are involved in. According to some reports, there are 12 head of cattle per person. In some aimags, livestock is a conventional monetary unit in transactions of a material nature. In contrast to animal husbandry, agriculture in modern Mongolia plays a secondary role.

Completion

The development of industry led to the formation of a working class according to the model of the proletariat of the USSR. The participation of the Soviet Union played an important role in the training of specialized workers. Some of the Mongols gained experience and knowledge by working at their enterprises under the supervision of sent Soviet craftsmen. They were trained in special circles, technical sections, training centers. Others were educated directly in the USSR. Thus, Mongolia is an example of a nationwide pursuit of economic prosperity for its country by developing industry, streamlining production processes and saving resources.

GOU VPO "REA im. G. V. Plekhanov "

Department of World Economy

Test

by discipline

"World economy"

"Analysis of the Mongolian Economy"

Performed:

3rd year student of FF

groups 2308

Bukhadeeva E.B.

Checked by: Ph.D.

Avturkhanov E.M.

Moscow city

Stages of economic development …………………………………………… ... 3

Type of economic development ………………………………………………… 5

The level of economic development …………………………………………… 6

Social structure of the economy ………………………………………………………………………………………………………………… ..... 6

Economic strategy and policy. Characteristic of GDP ……………… 7

Industry ……………………………………………………………… 7

Agriculture ……………………………………………………… ..... 9

Mineral resources ……………………………………………………… 9

Transport ………………………………………………………………… ... 10

Communication ……………………………………………………………………… .11

Quality and use of labor force ……………………………… .12

Foreign economic relations. The role of the country (region) in international production, international division of labor, economic integration …………………………………………………………………………………… 12

Forecast and development of economic ties with Russia ………………… 13

Forecast of socio-economic development of the country (region) …… ..16

Conclusion ……………………………………………………………………… 17

List of used literature ………………………………………… ... 18

Mongolia is a landlocked country in East Central Asia, bordered by Russia to the north and China to the south, west and east. With an area of 1,564,116 km² and a population of about 2.9 million people, Mongolia is the 19th largest country in the world, but at the same time it is one of the least populated countries. About 20% of the country's total population lives on less than $ 1.25 a day.

Mongolia's economy has traditionally been based on agriculture and cattle breeding. Mongolia also has vast deposits of minerals: copper, coal, molybdenum, tin, tungsten, gold, the development of which accounts for most of the industrial production.

Stages of economic development

Communist era. The country depended on the USSR for fuel, medicines, auxiliary raw materials for factories and power plants. The former USSR was also the main consumer of Mongolian industry. In late 1980, the government began to improve ties with non-communist Asia and Western countries, and tourism was launched. Soviet assistance, about one third of GDP, 80% of all international relations, disappeared practically overnight in 1990-91 during the collapse of the Soviet Union (1985-1991). Mongolia was in deep recession, which was prolonged by the (MPRP) reluctance of the Mongolian People's Revolutionary Party to undertake serious economic reforms.

Transition to a market economy. Between 1990 and 1993, Mongolia suffered from a three-dimensional increase in inflation, rising unemployment, shortages of basic commodities and the rationing system. During this period, production declined by one third. After reforms and a change in government policy towards promoting private entrepreneurship, economic growth began again in 1994-95. Unfortunately, as this growth was fueled in large part by oversaturation of bank loans, especially for the remaining state-owned enterprises, economic growth was accompanied by a severe weakening of the banking sector. GDP grew by 6% in 1995, mainly driven by a boom in copper prices.

The DUC (Democratic Union Coalition) government in 1996-2000 embarked on a course towards a free market economy, loosening price controls, liberalizing domestic and international trade, and attempting to restructure the banking system and the energy sector. National privatization programs were carried out, and the process of attracting foreign direct investment in oil production, cashmere companies and banks began. The reforms carried out by the ex-communist opposition to the MPRP and the political instability associated with the constant change of government left the country in crisis until the DSK government came to power Economic growth continued in 1997-99 after stopping in 1996 due to a series of natural disasters and an increase in world prices for copper and cashmere. Government revenues and export volumes, average real economic growth stabilized at 3.5% in 1996-99 due to the Asian financial crisis, the 1998 financial crisis in Russia and the deteriorating situation in the market for raw materials, especially copper and gold. In August and September 1999, the economy suffered from a temporary Russian ban on the export of oil and petroleum products. Mongolia joined the World Trade Organization (WTO) in 1997.

Present time. Mongolia's dependence on trade relations with China means that the global financial crisis will affect the Mongolian economy, which is characterized by a serious delay in economic growth. However, while all countries are in the process of post-crisis economic recovery, Mongolia suffers from itching in the winter (sea cattle from frost) 2009-2010, as a result of which there is a decrease in the number of livestock, which seriously affects the production of cashmere, which accounts for about 7% of the country's export earnings.

According to the World Bank and IMF estimates, real GDP growth contracted from 8% to 2.7% in 2009, while exports fell 26% from $ 2.5 billion to $ 1.9 billion after promising sustained growth until 2008. of the year. Because of this, it is projected that between 20,000 and 40,000 people. (0.7% and 1.4% of the population, respectively) will die because of poverty, which would not have happened if not the crisis.

In late 2009 and early 2010, however, the market began to recover again. Having identified problems and learning from its previous economic failures, the government is carrying out legislative reform and tightening fiscal policy, which assumes the development of the economy only in a positive direction. In February 2010, foreign assets were calculated at $ 1569449 million. New trade agreements are currently being formed and foreign investors are keeping a close eye on the "Asian wolf", the conventional name for the Mongolian economy. The term was coined by Renaissance Capital in the Blue Sky Opportunity report. They argue that Mongolia could become the new Asian tiger, or the non-stop “Mongolian wolf,” as they prefer to call the economy of Monogolia. Recent developments in the mining industry and the quantitative growth of foreign investors confirm that the Mongolian wolf is ready to leap. The aggressive name of the term reflects the development opportunities in the capital market, as well as the good prospects in the mineral resources industry. The Mongolian economy has a chance to retain its title of fast growing and developing economy.

UDC 339.9 (517.3)

A.P. Sukhodolov, Yu.V. Kuzmin

ECONOMY OF MONGOLIA IN GREATER EURASIA

The article presents the characteristics of the modern economy of Mongolia, its problems and difficulties. The main attention is paid to the analysis of Mongolia's foreign economic relations in East Asia with the main partners in the region. The 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 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 shape and showed themselves after 2014. Previously, they had 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 captured the economic, political, scientific, informational and cultural spheres. But it turned out that this was not so, and a lot began to change.

A serious structural reformation is taking place in the world, a multipolar economic order is being formed; the attempt by the United States after the collapse of the USSR to create a unipolar world, focused on one country, one currency, one liberal model of the economy, failed. The countries of the world did not accept this system, they explicitly and directly resisted it. Attempts to impose an American order in Western Asia through "color revolutions" also met with stiff resistance and opposition. The countries of Islamic civilization have their own values, which are more ancient and profound than the young American model, which is one of the Western models of the economy, and it does not represent the best part of it. The social market model, which is especially successful in France, Germany, and Sweden, may be more attractive in the world economy. Unfortunately, we have to admit that it is also exhausting its economic potential, needs a serious socio-economic adjustment and, apparently, this will happen in the coming years. In the last decade, the economic experience of Finland, Norway, 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.

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

by about 20%, the lowest point was in 1993 -40%. The volume of the mining industry has doubled and the volume of manufactured goods has decreased by 2.5 times (Graivoronsky, 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.) have led to a sharp decline in company profits, employment and state budget revenues. The lack of competition for raw materials in Mongolia and the purchase only by China led to a sharp decline in prices for copper, coal, agricultural raw materials.

Mongolia's GDP growth in 2014 was 7.9%, in 2015 - 2.3%. Previously, there were years when GDP growth reached 14% per year, when commodity prices were stable and high.

As you know, Mongolia has large world-class deposits of coal (Tavantolgoy), copper (Oyutolgoy, Erdenet), which have been developed and are already being exploited. Export of raw materials is the leading item of budget revenue, over 60% of budget revenue. 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 aggravated by the fact that the main buyer of this raw material is one buyer - China, which enjoys a monopoly position and dictates the pricing policy on the Mongolian market. In these conditions, the 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 in the world market are 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 affect the economic situation of the nomadic country. Currently (early September 2017) Mongolia is looking for options for transporting Mongolian-

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

Mongolia was already part of the Qing Empire and part of the Soviet bloc, so it wanted to maintain economic and political independence. Mongolia's policy statements of neutrality and the practical implementation of this provision have little agreement. At present, the economy of Mongolia is under the significant economic influence of powerful China (investments, foreign trade). During the last presidential campaign, all presidential candidates emphasized the high dependence of the Mongolian 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.

Great hopes in Mongolia pinned and are pinning on the so-called. Mongolia's "third neighbor" represented by the United States, Japan, South Korea, and Western European countries. Unfortunately, the scale of economic cooperation and investment is insignificant 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 United Arab Emirates, 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 link Mongolia with Japan and South Korea. Most 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 kindred Asian peoples. Mongolian youth also gravitate towards youth Korean culture. Both countries are perceived in Mongolia as Asian countries that have achieved outstanding results.

Main economic problems: a lack of investment, a small population (3 million people) and its uneven distribution in the center of the country, Ulan Bator (1.4 million people), political instability and frequent change of Mongolian governments (15 governments over 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, frequent lawsuits. The corruption component has led to a huge social stratification of Mongolian society and social instability. The Investment Forum in Ulaanbaatar in early September 2017 noted the need to develop specific and stable rules for attracting foreign capital, and reduce administrative obstacles.

Active mining leads to the displacement of Mongolian nomads from their traditional places of residence and the destruction of the environment. Desertification processes have also become rampant for Mongolia. Desertification processes in Mongolia have a natural basis associated with a warming world climate and the impact of the development of pastoralists, in connection with the mass breeding of livestock (80 million head of livestock), especially Mongolian goats.

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

In 2017, the Mongols won 73 medals out of 90 possible at the Asian Games. 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 world economic power that is interested in stable transport corridors China - Europe, the formation of transport corridors "One Belt - One Road", the new Alkaline Road includes Mongolia as one of the important links in these projects. Mongolia's inclusion in the system of international rail, air and road corridors will strengthen the country's economic position in the international economy, especially in Inner Asia. Mongolia is viewed as one of six options for China-Western Europe transport corridors. At present, the transport corridor from China through the countries of Central Asia is actively functioning, 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 Tien Jin - Ulan Bator - Ulan-Ude transport corridor in two versions: rail and road. The implementation of this Project is scheduled for early 2018. We are talking about the modernization of existing roads and improvement of border crossings, as well as the creation of modern infrastructure in transit countries.

Mongolia is improving the quality of the country's railways and highways, increasing the speed of transportation, and increasing the number of border checkpoints for passengers and goods. This will improve or re-create modern highways, international airports, and increase the number of modern jobs in the service and tourism sectors. Discussions also continue in Mongolia: what kind of railways to build in Mongolia: Russian or Chinese standards?

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

As you know, at present, China is 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 Transsib, therefore, it indirectly intensifies competition. China is actively creating hubs in the countries of the world, that is, warehouses of 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 rail corridor Harbin-Hamburg was launched. Also, for example, in Belarus, near Minsk, the so-called industrial park "Great Stone" is being created, on an area of 80 km2. This entire project is estimated at about $ 80 billion.

High rates of economic growth in the PRC, the emergence of a number of industries of the country's industrial production in 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 positions in the modern international economy, due to economic sanctions, the outflow of domestic and foreign capital from the country and an inadequate economic model of Russia's development. The serious strengthening of the geopolitical and military status of Russia so far compensates 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, so the very concept of strategic partnership for modern China is generally unacceptable. The state of JunGo (the Middle State or the Middle Empire) did not consider and considers 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 tactical, on the part of China, until it strengthens its position to the level of equal military-geopolitical potential of the United States or close, for direct competition and confrontation (emphasis added by the author). The Russian side needs to specifically calculate not only positive prospects, but also the difficulties and problems that will arise during the implementation of the Projects initiated and promoted by the Chinese side.

The economic superiority of the PRC in the near future will be supplemented by military-geopolitical superiority and a higher scientific level of world leadership. Expenditures on science and education in China, which exceed Russian ones by times, are already yielding their first fruits, and, in the near future, will show the whole world real scientific achievements of the world level.

Russia declares its economic, political and scientific interest in Russian-Mongolian cooperation, but so far it is incomparable with the size of the Sino-Mongolian economic cooperation, Chinese investments and opportunities. Mongolia's economy is increasingly dependent on China. The credits received 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 it are kept at a low level. The Chinese leadership reacted rather harshly to the visit of the Dalai Lama 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 a sense quite similar, although not identical. According to the structure of their exports to China, they are raw material suppliers for the rapidly growing Chinese economy, a kind of appendages of the economy or the periphery of the Chinese economy, which is rapidly moving towards world leadership. This cooperation is more in line with the national and economic interests of China, and not 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 the manufacturing industry, modern technologies in agriculture, energy and communications. It is necessary to create and develop another large city in order to relieve the overpopulation and environmental problems of the Mongolian capital. Investing 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, Tuva, Irkutsk Oblast and the Trans-Baikal Territory will make it possible by joint efforts to intensify the national economy and preserve independence, and improve the quality of life of the Mongolian population.

Sukhodolov Alexander Petrovich - Doctor of Economics, Professor, Rector, Baikal State University, 664003, Russian Federation, Irkutsk, st. Lenin, 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. Lenin, 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]

Mongolia Economy

Economy - at a glance:

Economic activity in Mongolia has traditionally been based on livestock and agriculture.

Mongolia has extensive mineral deposits.

The country hosts copper, gold, coal, molybdenum, feldspar, uranium, tin, tungsten, mining and processing industries account for most of foreign direct investment and government revenues.

Severe winters and summer droughts in 2000-2002 resulted in massive livestock deaths and zero or negative GDP growth.

In 2004-2008, GDP growth was around 9%, largely due to high copper prices and new gold discoveries.

In 2008, an inflation rate of almost 30% was recorded - the highest inflation rate in a decade.

In early 2009, the International Monetary Fund allocated $ 236 million under the "stand-by" program, and the country began to emerge from the crisis, although some instability in the banking sector remains.

In October 2009, the government passed long-awaited legislation to develop Oyu Tolgoi, one of the world's largest copper deposits.

Mongolia's economy remains heavily dependent on its neighbors. Mongolia buys 95% of oil and a significant amount of electricity from Russia, which leaves it vulnerable to price increases. Trade with China accounts for over half of Mongolia's total foreign trade - China receives about two-thirds of Mongolia's exports.

Remittances from Mongolians working abroad are significant, but have dropped due to the economic crisis; money laundering is a growing concern.

Mongolia joined the World Trade Organization in 1997 and is committed to expanding its participation in regional economic and trade regimes.

US $ 3,100 (2009)

4,030 million kWh (2009)

5,100 bbl / day (2009)

5,300 bbl / day (2009)

- $ 228.7 million (2009)

Country comparison to the world: 93

- $ 710 million (2008)

Export:

$ 1902 million (2009)

Country comparison to the world: 130