mongolian economic analysis
TRANSCRIPT
7/23/2019 Mongolian Economic Analysis
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Submitted by: Munhtulga Sodnompil( )
Submitted to: Dr.Shi(拾已宇)
International Business Year 1I-Shou universityInternational business department
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Mong
olian
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ContentsContents ...........................................................................................................21 Introduction ...................................................................................................32 Main body ................................................................................................... .42.1 UN statement…………………………………………………………………….72.2 Mongolian ministry of finance’s statement……………………………………! Conclusions .................................................................................................11"eferences .....................................................................................................12
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Introduction
#$en e%eryone sees Mongolia& t$ey 'ill (robably t$in) about *eng$is+,a$n. Not so
muc$ of t$em )no' about (resent Mongolian social life. 2- years ago our economy
suffered tri(le+digit inflation& rising unem(loyment& s$ortages of basic goods& and
food rationing. fter 'e mo%ed into /emocratic country& economic gro't$ began
again. 0$is re(ort 'ill analye t$e (resent Mongolian economy . nd consider recent
gro't$ in our economy.
0$e re(ort is di%ided into four main sections.
It 'ill first consider economic acti%ity in Mongolia and some introductions.
It 'ill t$en go on to describe economic gro't$ of Mongolia.
0$e t$ird (art com(ares current Mongolian economic situation.
inally& some conclusions 'ill be dra'n as to Mongolian go%ernment’s economic
(olicy.
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Main body
conomic acti%ity in Mongolia $as traditionally been based on agriculture and t$ebreeding of li%estoc)..
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Mongolias e5tensi%e mineral de(osits& $o'e%er& $a%e attracted foreign in%estors&and t$e country is undergoing an economic transformation t$roug$ its miningboom. Mongolia $olds co((er& gold& coal& molybdenum& fluors(ar& uranium& tin& andtungsten de(osits& among ot$ers& '$ic$ account for a large (art of foreign directin%estment and go%ernment re%enues. 6o%iet assistance& at its $eig$t one+t$ird of*/& disa((eared almost o%ernig$t in 1- and 11 at t$e time of t$edismantlement of t$e U66". 0$e follo'ing decade sa' Mongolia endure bot$
dee( recession& because of (olitical inaction and natural disasters& as 'ell aseconomic gro't$& because of reform+embracing& free+mar)et economics ande5tensi%e (ri%atiation of t$e formerly state+run economy. 0$e country o(ened afledgling stoc) e5c$ange in 11. Mongolia 8oined t$e #orld 0rade 9rganiation in17 and see)s to e5(and its (artici(ation in regional economic and trade regimes.*ro't$ a%eraged nearly : (er year in 2--4+-; largely because of $ig$ co((er(rices and ne' gold (roduction. <y late 2--;& t$e country 'as faced 'it$ e5ternals$oc)s from t$e global financial crisis& and a s$ar( dro( in commodity (ricesslas$ed go%ernment re%enues. */ dro((ed 1.3: in 2--. In early 2--& t$eInternational Monetary und reac$ed a =23! million 6tand+by rrangement 'it$Mongolia and t$e country $as largely emerged from t$e crisis. 0$e ban)ing sector
is reco%ering and t$e go%ernment $as started to enact greater su(er%isionregulations. In 9ctober 2--& Mongolia (assed long+a'aited legislation on anin%estment agreement to de%elo( t$e 9yu 0olgoi mine& considered to be amongt$e 'orlds largest unta((ed co((er de(osits. not$er similarly lengt$y (rocess isunder'ay for an in%estment agreement for t$e massi%e coal mine at 0a%an 0olgoi>it is under re%ie' by t$e National 6ecurity. 0$e economy gre' !.4: in 2-1- and17.3: in 2-11& largely on t$e strengt$ of commodity e5(orts to nearby countries.0rade 'it$ C$ina re(resents more t$an $alf of Mongolias total e5ternal trade +C$ina recei%es more t$an -: of Mongolias e5(orts. Mongolia (urc$ases ?: ofits (etroleum (roducts and a substantial amount of electric (o'er from "ussia&lea%ing it %ulnerable to (rice increases. In t$e face of antici(ated gro't$ in mining
re%enues& t$e country is gra((ling 'it$ t$e c$allenge of a%oiding an o%er$eatedeconomy. /ue to se%ere 'inter 'eat$er in 2--+1-& Mongolia lost 22: of its totalli%estoc)& and meat (rices doubled. "ene'ed concerns are surfacing o%ercontrolling inflation& '$ic$ 'as more t$an 1-: for muc$ of 2-1-+11& due in (art tosoaring food (rices. *o%ernment s(ending + on line to increase as muc$ as 7?:o%er 2-11 + $as added to concerns o%er inflation. "emittances from Mongolians'or)ing abroad& (articularly in 6out$ ,orea& are significant. Money+laundering is agro'ing concern.
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2009 2010 2011
-5
0
5
10
15
20
GDP-real growth rate
Unemployment rate
rom t$is c$art 'e can see our */ is rising and unem(loyment is decreasing eac$ year. lso our */+(er ca(ita rose from 41--= to 4;--=. 9n t$e ot$er $and our economy debtis still 2 billion dollars.
mount Commodities artners5(ort =4.;1; billion @2-11
est.Acountry com(arison to
t$e 'orldB 11
=2.- billion @2-1-
est.A
co((er& a((arel&
li%estoc)& animal(roducts& cas$mere&
'ool& $ides& fluors(ar&
ot$er nonferrous
metals& coal& crude oil
C$ina 2.1:& "ussia
2:& Canada 1.:@2-11 est.A
Im(ort =?.;1 billion @2-11
est.A
country com(arison to
t$e 'orldB 121
=3.-; billion @2-1-
est.A
mac$inery and
eui(ment& fuel& cars&
food (roducts&
industrial consumer
goods& c$emicals&
building materials&
cigarettes and
tobacco& a((liances&
soa( and detergent
C$ina 3-.7:& "ussia
24.?:& U6 ;.1:&
Da(an 7.4:& 6out$
,orea ?.?: @2-11
est.A
0$is economic gro't$ $as translated into some benefits for t$e (eo(le of Mongolia.o%erty $as been on a do'n'ard trend o%er t$e (ast decade. Most recently& itdecreased from 3.2 (ercent in 2-1- to 2.; (ercent in 2-11. 6ubstantial (rogress$as also been made in regard to se%eral Millennium /e%elo(ment *oals @M/*sA at
t$e national le%el& t$oug$ significant regional dis(arities (re%ail.
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he !ol" #conomy
0$e term 'as notably coined by "enaissance Ca(ital in t$eir re(ort + Mongolia’sE<lue 6)y 9((ortunity. 0$ey state t$at Mongolia is set to become t$e ne' sian0iger & or EMongolian #olfE as 'e (refer& and are Eunsto((ableE. #it$ t$e recent
de%elo(ments in t$e mining industry and foreign interest increasing at an astonis$ingrate& it is claimed t$eir #olf conomy loo)s ready to (ounce. 0$e term’s aggressi%etitle mirrors t$e country’s attitude in t$e ca(ital mar)et en%ironment& and 'it$ne'found mineral (ros(ects it $as t$e c$ance to retain its title as t$e fastest gro'ingeconomy in t$e region.
Ban$s
0$e ban)ing sector is $ig$ly concentrated& 'it$ four ban)s $olding a significantma8ority mar)et s$areB
•Fac<an) + Fac<an) is a community de%elo(ment ban) and microfinanceinstitution $eaduartered in Ulaanbaatar& 'it$ a nation+'ide net'or) of 1--offices and 13- staff as of Dune 2-12.
• ,$an <an) + ,$an <an) $as 21 regional branc$ offices t$roug$out t$ecountry& eac$ of '$ic$ su(er%ises an additional 1? to 2? smaller branc$es inits area.
• *olomt <an) + *olomt <an) started in 1? and no' manages around 23: of t$e assets in t$e domestic ban)ing system.
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• 0rade and /e%elo(ment <an) + 0/< 'as formed in 1- and is t$us t$e
oldest ban) in Mongolia. It $as a net'or) of 2; branc$es and settlement
centers& !- 0Ms& 13-- 96 terminals& and InternetG6M6 ban)ing t$roug$out
t$e country
%& independent e'pert arns economic
roth in Monolia is not bene"itin the poor 7 /ecember 2-12 H #$ile t$e Mongolian economy $as e5(erienced continued
gro't$& t$is $as not benefited t$e country’s (oor& a United Nations inde(endent
e5(ert 'arned& urging t$e *o%ernment to ado(t (o%erty reduction strategies based
on $uman rig$ts a((roac$es.
#$ile some (arts of t$e country are being transformed& (o%erty remains %ery $ig$and is becoming entrenc$ed not only in rural areas but also in urban centres as t$e
income ga( 'idens and ineuality increasesJsaid t$e 6(ecial "a((orteur on e5treme
(o%erty and $uman rig$ts& Magdalena 6e(Kl%eda& follo'ing a %isit to t$e Central
sian country.
6$e added& 0$e fact t$at (o%erty le%els remain $ig$ and t$ere are increasing
ineualities is a clear demonstration t$at t$e benefits of economic gro't$ $a%e not
tric)led do'n to t$e (oor.J
Ms. 6e(Kl%eda e5(ressed concern about t$e c$allenges faced by %ulnerable grou(s
affected by (o%erty and social e5clusion in Mongolia& suc$ as 'omen& c$ildren&
(ersons 'it$ disabilities& older (ersons& migrants& $erders and nomadic
communities> et$nic minorities> lesbian& gay& bise5ual and transgender (eo(le>
(ersons li%ing 'it$ LIGI/6& and stateless (ersons.
/uring $er fi%e+ day %isit& Ms. 6e(Kl%eda met 'it$ senior
*o%ernment officials& donor agencies& international
organiations& financial institutions& ci%il society
and communities li%ing in (o%erty bot$ 'it$in t$eca(ital& Ulaanbaatar& and surrounding districts& as 'ell
as rden soum in t$e 0u% (ro%ince.
0$e 6(ecial "a((orteur urged
t$e *o%ernment to
immediately address
t$e critical
needs of t$e
(oorest and most
marginalied&
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ensuring t$at t$eir rig$ts are (rotected and t$ey are (ro%ided 'it$ adeuate
resources and access to basic ser%ices.
I $a%e found t$at& for t$e most (art& Mongolia $as establis$ed a robust legal
frame'or)& recogniing t$at e%eryone must en8oy t$e rig$ts to education& $ealt$&
$ousing& food& etc. H$o'e%er& t$e la's do not necessarily translate into t$e e%eryday
reality for many Mongolians&J s$e said& stressing t$at t$ere are se%ere
im(lementation ga(s in almost all social (olicies& ranging from domestic %iolence to
traffic)ing.J
ccountability mec$anisms to monitor t$e im(lementation and (rogress of (o%erty
reduction strategies 'ill be necessary& Ms. 6e(Kl%eda noted.
Mongolia must foresee t$e necessary budgetary im(lications and ensure
sustainability in t$e long term and im(lement t$e strategy 'it$ strong cross+sectorialcoordination t$roug$ t$e leaders$i( of a designated ministry&J s$e said. 0$ose li%ing
in (o%erty in Mongolia can 'ait no longer.J
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&e't * years Monolian economic policy by
Monolian ministry o" "inance
In t$e future& account of t$e de%elo(ment of mining& increasing of em(loyment andforeign in%estment& stoc) de%elo(ment etc 'e estimated t$at our economic gro't$'ill not be less t$an 1?:.lso 9yu+0olgoi’s gold and co((er mining is a big(romotion for our economy '$ic$ is start mining from 2-13.
2012 2013 2014 2015 2016
0
50000
100000
150000
200000
250000
300000
350000
Assumed growth of GDP(illion !ugrug)
Assme! growth o"
GDP#$%ll%on &grg'
In 2-12 inflation rate is 1?: and because of economic gro't$ 'e $a%e been
e5(ecting our inflation rate 'ill be 13.1 in coming years. If go%ernment )ee( $olding
inflation and not su((ort demand& inflation rate could be under 1-:. urt$ermore&foreign in%estment in mining is increasing and our e5(ortation@gold& co((erA (rice is
rising on t$e 'orld mar)et our e5c$ange rate could increase in ne5t 4 years.
ssume of go%ernment debt
0$is year go%ernment enacted t$e (ro8ect '$ic$ is called dministration ofgo%ernment debtJ. In t$is (ro8ect 'e set t'o goalsB
1. 0o decrease internal debt by ste( by ste(. 0o fund ?-: of go%ernmentneeds from internal debt.
2. 0o decrease e5ternal debt by ;-:. In 2-14 year decrease foreignliabilities by ?-:.
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2012 2013 2014
0
50100
150
200
250
300
350
400
450
500
Assumed Go"ernment bonds
Go(ernment )on!s
2012 2013 2014
0
1000
2000
3000
4000
5000
6000
7000
8000
Assumed go"ernment debt
Assme! go(ernment
!e)t
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+onclusion
It $as been s$o'n& t$erefore& t$at 'e can clearly see t$ere is economicgro't$ in Mongolia. <ut still be$ind a lot of countries. 0$e most im(ortant t$ing is
Mongolian (eo(le can’t get t$e (rofit from t$is economic gro't$. o%erty and
unem(loyment rate is still $ig$. 9ur go%ernment not only 8ust focus on economic but
also s$ould im(ro%e social life. I am sure t$at our economy 'ill become strongest in
sia in t$e near future. In my o(inion& only young generations can de%elo( bot$
economy and social life. nd mining is not t$e only 'ay to de%elo(& education is t$e
most im(ortant t$ing. %ery good e5am(le is t$at after t$e defeat of 'orld 'ar II
*ermany suffered from recession. <ut t$ey in%ested all of t$eir budget in education
and today 'e can see t$at 'as rig$t decision and economic gro't$ is related toeducation. 0$us 'e can’t 8ust t$in) about $o' to de%elo( our economy& 'e also $a%e
to im(ro%e education system es(ecially $ig$ sc$ool education system. #e bordered
'it$ "ussia and C$ina& bot$ $a%e a strongest economy of t$e 'orld. 6o if 'e use
t$is ad%antages our economy 'ill be more and more stronger.
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,e"erences
1.$tt(BGGmof.go%.mn
2.$tt(BGG'''.'orldban).org
3.$tt(BGG'''.un.org
4.$tt(sBGG'''.cia.go%G
?.$tt(BGGen.'i)i(edia.orgG
!.$tt(BGG'''.google.com
7.$tt(BGG'''.forum.mn
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