2. 7
Country Profile
Vast, sparsely populated and steeped in tradition
Nomadism continues to influence national culture
Embracing modernity while linked to the past
Mining and agriculture underpin the economy

3. 8 COUNTRY PROFILE
The capital, Ulaanbaatar, is run as an independent municipality
Eastern promises
Old traditions join modern life in this resource-rich country
Bounded by Russia to the north and China to the gols burst onto the global stage, however, with the
south, Mongolia is a vast country and sparsely popu- Eurasian empire established by Chinggis (Genghis)
lated – larger than Western Europe, but with a popu- Khan in the 13th century. At its height, Chinggis’ empire
lation of under 3m people. The country of wind-swept stretched from Poland to Vietnam and held over 100m
steppes, plains and deserts is famous for its nomadic people. Upon his death, however, Chinggis’ territory
tradition, still influential despite rapid development. was divided into four khanates (a political entity ruled
However, stable and democratically-ruled Mongolia is by a khan), which gradually crumbled, although one
also emerging as a key centre for mining investment, achieved fame as the Yuan Dynasty of Kublai Khan. The
with important mineral reserves and a number of Mongols eventually retrenched to their original home-
major projects due to enter production soon. lands, and by the late 17th century submitted to the
GEOGRAPHY: Mongolia, covering a surface area of rule of the Chinese Qing dynasty.
1.56m sq km, is the 19th largest country in the world. The Bogd Khan, Mongolia’s Buddhist spiritual leader,
The country is entirely land-locked, with land borders declared the country’s independence in 1911 upon
that stretch 8220 km. Its geography is characterised the fall of the Qing dynasty. The new Chinese govern-
by plains, steppes and deserts – notably the Gobi ment, however, still considered “Outer Mongolia” as
desert in the south of the country – while parts of the part of the republic and used the Russian Revolution
north, far west and south-west are more mountain- in October 1919 as a pretext to occupy the territory.
ous. The far west hosts the country’s highest peak, the Bolshevik Russia supported the formation of a com-
4374-metre-high Huyten Orgil (Khüiten Peak), which munist Mongolian government and army, which
sits astride part of the western frontier where Mon- expelled the Chinese forces. The Mongolian People’s
golia, Russia, China and Kazakhstan come together. Government was declared in 1921, and after the Bogd
The capital, Ulaanbaatar, has a population of around Khan’s death in 1924, the full independence of the
1.1m according to the 2010 census and is located Mongolia’s People’s Republic was declared.
slightly north-east of the centre of the country. The The new republic was strongly influenced by the Sovi-
mountainous northern province of Khövsgöl, named et Union. The dictator Khorloogiin Choibalsan, who
after a lake with the same name, is known for its ruled from 1928 to 1952, collectivised livestock,
dynamic population, as well as for being a stronghold destroyed Buddhist monasteries, and purged tens of
of shamanism and related practices. thousands of citizens, mainly monks. Mongolia con-
In the south of the country, the Gobi desert, despite tinued to side with Moscow even after the Sino-Sovi-
the images of endless sand conjured by the name, is et split in the 1960s, with tens of thousands of Sovi-
known for its diverse scenery and landscapes, includ- et troops stationed in Mongolia in the 1980s.
ing glaciers, canyons and oases, as well as for host- With the advent of glasnost and perestroika in the
ing the country’s largest mineral deposits. late 1980s, however, the first cracks in Mongolian
HISTORY: Present-day Mongolia has been inhabited communism began appearing. Protests and hunger
by modern humans for approximately 40,000 years, strikes orchestrated by the Mongolian Democratic
with major political systems developing in the first Union toppled the communist government in 1990.
millennium BC. A succession of nomadic tribal con- The constitution was amended to allow opposition
federations, including the Xiongnu, Xianbei, Rouran, parties, and multi-party elections were held in the
Khitans, and Khamag Mongols, ruled over large parts same year. The former state party, the Mongolian Peo-
of the steppe between 200 BC and 1200 AD. The Mon- ple's Revolutionary Party, retained power until 1996,
www.oxfordbusinessgroup.com/country/Mongolia

4. COUNTRY PROFILE 9
when it lost in elections and peacefully relinquished
control. Since then, Mongolia’s young democracy has
seen sporadic political crises, but is currently charac-
terised by relatively little violence and a healthy con-
sensus for multiparty politics.
NATIONAL GOVERNMENT: Having ended decades
of communist rule in 1990, Mongolia is governed by
a mixed presidential-parliamentary system. Candi-
dates for the presidency are nominated by the single-
chamber, 76-seat parliament, known as the State Great
Khural, and elected by popular vote for a maximum of
two four-year terms. The president acts as the head
of state and chief of the armed forces and is obliged
to appoint as prime minister the candidate present-
ed to him by the parliamentary majority.
The prime minister appoints a cabinet that must be
approved by the State Great Khural. Parliamentary
elections are also held every four years. While Mon-
golia has a long legal tradition stretching back to the
yasa (written code of law) of Chinggis Khan, the con-
The constitution promotes freedom of worship; around half of the population is Buddhist Lamaist
temporary legal system has been strongly influenced
by that of the Soviet Union. Protestant denominations. The constitution and the
LOCAL GOVERNMENT: Mongolia is administratively government both provide for freedom of worship.
divided into 21 regions, known as aimag, with the LANGUAGE: Around 90% of Mongolians speak Mon-
capital city, Ulaanbaatar, operating as an independ- gol, most of them using the Khalkha Mongol dialect,
ent municipality. Each province elects a local khural which is the official language of Mongolia and which
to parliament and is sub-divided into administrative since 1963 has been written in the Cyrillic alphabet
regions (sums) that have local representative bodies. due to the strong influence of the Soviet Union. How-
POPULATION: The current estimated size of Mongo- ever, the traditional Mongolian alphabet is gradually
lia’s population is just under 3m (growing at an annu- being reintroduced. Turkic languages – principally
al rate of 1.49%), making it the 134th-largest country Kazakh – are also spoken, mainly in the west of the
by population. Its small population, combined with country. Russian was spoken fairly widely in the past,
Mongolia’s vast geographical size, makes the country sustained by the large number of immigrants from
the least densely populated nation in the world. the Soviet Union, however, many left following its col-
The country is fairly ethnically homogenous, with lapse and the language does not have as wide an
approximately 95% of the population being of Mon- influence any longer.
gol origin, around 90% of whom hail from the Khalkha CULTURE & HERITAGE: Nomadism (and in particu-
Mongol ethnic group, who speak the Khalkha dialect lar nomadic herding of livestock) and Buddhism are
of Mongol. Other Mongol ethnic groups include the two of the most important influences on Mongolian
Buriat, Dorvof and Tuvad groups. However, the pop- culture. While most Mongolians are now settled into
ulation has a substantial Turkic ethnic minority of urban areas, a significant number of city-dwellers
around 5% of the population – most of whom are eth- nonetheless continue to live in gers, traditional round
nic Kazakhs – who make up the majority of the pop- wood and felt tents that were specifically designed
ulation of the western-most province of Bayan-Ulgii. for the nomadic lifestyle.
RELIGION: According to figures from 2004, approxi- The most popular traditional sport is Mongolian
mately half of the Mongolian population is Buddhist wrestling, known as bukh. Together with horseracing
Lamaist, a sect of Tibetan Buddhism. Most Buddhist and archery, this is the mainstay of the famous sum-
temples and monasteries were destroyed under the mer festival of Naadam, which is also a major tourist
communist regime, which sought to erase the influ- attraction. Epic poetry also remains a significant cul-
ence of religion on the population. However, a num- tural tradition. Wrestlers at Naadam are honoured by
ber of these structures were left standing as exam- bards, while the nation’s past is famously encapsulat-
ples of traditional Mongolian culture, including the ed in the epic poem “The Secret History of the Mon-
famous Gandantegchinlen monastery in the capital city. gols”, which describes the rise of the Mongol Empire
Roughly 40% of Mongolians do not practice any under Chinggis Khan in the 13th century.
religion, partly of the legacy of the ban on all religious Mongolian cuisine is influenced by the country’s
practice that was in place under the former commu- herding tradition, and thus based largely around meat
nist regime, which ended in 1990. There is also a Sun- and milk products. Traditional staple dishes include a
ni Muslim minority – mostly made up of the Kazakh variety of mutton dumplings such as buuz (steamed
minority – that comprises around 4% of the popula- dumplings) as well as khushuur, which are deep fried
tion. In addition, small Shamanist and Christian com- meat pies. Popular traditional drinks include milk
munities exist, with most Christians subscribing to tea and airaig, lightly alcoholic fermented mare’s milk.
THE REPORT Mongolia 2012

5. 10 COUNTRY PROFILE
world (after Chile). Canada’s Ivanhoe Mines and Rio
Tinto are developing the site in partnership with the
government, which has a 34% stake in the project. Pro-
duction at the mine, located in the South Gobi region,
is due to begin in 2013.
Tavan Tolgoi, the world’s largest untapped coal
reserve, is also a major focus. The government has
decided to divide the site in two, keeping 51% to devel-
op on its own and inviting participation from interna-
tional mining firms for the remainder. Additionally,
Mongolia is the world’s third-largest producer of
fluorspar, used in iron smelting. Its output accounts
for approximately 5.5% of global output.
Mongolian mines produced 25m tonnes of coal in
2010, of which 18m was exported. Mongolia is also
believed to have the world’s second-largest reserves
of uranium after Australia, with a major prospect set
to being production in 2012. The nation also holds sig-
nificant reserves of tin, molybdenum and tungsten.
A RISING TIDE: Mongolia’s commodities surge is
The surge in commodities growth is expected to boost other sectors such as banking and industry
expected to boost the country’s other industries, many
CLIMATE: Given the large size of the country, the of which are small now but should benefit from GDP
weather varies significantly. Generally, the climate is growth rates as high as 20% annually. The banking
an extreme continental one, thanks to its landlocked sector, for example, is as of yet too small to service
status and distance from the sea. In Ulaanbaatar – one the mining sector’s massive capital requirements, but
of the coldest capital cities in the world – the coldest an influx of mining money will provide liquidity through
month on average is January, where temperatures fluc- other channels. Anticipated growth areas include
tuate between a daily average of -32°C and -19°C. mortgages and auto loans.
Meanwhile, the temperature peaks in July, alternat- Mongolia’s industrial base is similarly modest, hav-
ing between average daily minimums and maximums ing seen Soviet-era factories close down in the early
of 11°C and 22°C. However, temperatures outside of years of democracy. Textiles, food and beverages, and
Ulaanbaatar and particularly in the southern desert basic metals from mining account for more than 80%
regions are substantially higher. of industrial output. The former two are primarily agri-
In the steppe and desert areas of the country the cultural outputs, with cashmere from goats having
temperature fluctuates between warm days and cool grown into perhaps the country’s largest industry.
nights. July is the wettest month, with precipitation Even as it turns into a mining powerhouse, Mongo-
averaging roughly 76 mm in the capital. lia is seeking to preserve its pastoral landscapes, home
NATURAL RESOURCES: Agriculture, and particular- not only to a distinctive national culture but also to
ly herding – around which many of the country’s tra- economic potential. The country is seeking to market
ditional activities and the semi-nomadic culture is cen- both its cashmere and its meat products as premium
tred – are important contributors to the economy. products grown in a sustainable, traditional manner.
However, the scale of the activities is primarily focused In terms of more advanced industry, however, Mon-
at the national level. As a result, it is the mining and golia is banking on a $10bn industrial complex in Sain-
extracting sector that is emerging as the key driver of shand that will take advantage of raw materials from
both exports and foreign investment. mining sites and still-to-be-built railway links.
Mongolia currently has very little to speak of in the Infrastructure development will in fact be key to
way of significant oil or gas reserves. However, the Mongolia’s attempt at resource-driven growth. As a
country is an important mining and minerals centre. landlocked country sandwiched between China and
Many of the country’s deposits are still untapped, and Russia, getting commodities and other exports to buy-
a number of major new projects are due to begin pro- ers is time-consuming and expensive. The country’s
duction in the near future. These are expected to sig- airport is a holdover from Soviet times, its roads are
nificantly increase Mongolia’s status as a producer of frequently unpaved, and its railroad network is a mish-
minerals. The mining sector currently accounts for mash of incompatible Chinese and Russian standards.
30% of GDP and 32% of government revenue, accord- Much of the government’s mining-related invest-
ing to research from Resource Capital. ment is being funnelled, therefore, into infrastructur-
Much of the output is exported to its rapidly expand- al improvements. Plans include upgraded roads both
ing neighbour, China. The country has among the within Ulaanbaatar and in the provinces, a new air-
largest copper reserves in the world, with the Oyu Tol- port, and more than 5000 km of new railways. Such
goi reserve thought to be the world’s largest unde- massive investment will not only make the country and
veloped copper and gold reserve. Oyu Tolgoi also gives its hinterlands more accessible but will also benefit
Mongolia the second-largest copper reserves in the local construction companies and service providers.
www.oxfordbusinessgroup.com/country/Mongolia