Gazeteer of Mongolia

Background
The Mongols gained fame in the 13th century when under Genghis KHAN they conquered a huge Eurasian empire. After his death the empire was divided into several powerful Mongol states, but these broke apart in the 14th century. The Mongols eventually retired to their original steppe homelands and came under Chinese rule. Mongolia won its independence in 1921 with Soviet backing. A Communist regime was installed in 1924. During the early 1990s, the ex-Communist Mongolian People's Revolutionary Party (MPRP) gradually yielded its monopoly on power to the Democratic Union Coalition (DUC), which defeated the MPRP in a national election in 1996. Since then, elections returned the MPRP overwhelmingly to power in 2000 and ended in a split vote in 2004. more

Economy
Economic activity traditionally has been based on agriculture and breeding of livestock. Mongolia also has extensive mineral deposits; copper, coal, molybdenum, tin, tungsten, and gold account for a large part of industrial production. Soviet assistance, at its height one-third of GDP, disappeared almost overnight in 1990-91 at the time of the dismantlement of the USSR. Mongolia was driven into deep recession, prolonged by the Mongolian People's Revolutionary Party's (MPRP) reluctance to undertake serious economic reform. The Democratic Union Coalition (DUC) government embraced free-market economics, eased price controls, liberalized domestic and international trade, and attempted to restructure the banking system and the energy sector. Major domestic privatization programs were undertaken, as well as the fostering of foreign investment through international tender of the oil distribution company, a leading cashmere company, and banks. Reform was held back by the ex-Communist MPRP opposition and by the political instability brought about through four successive governments under the DUC. Economic growth picked up in 1997-99 after stalling in 1996 due to a series of natural disasters and declines in world prices of copper and cashmere. In August and September 1999, the economy suffered from a temporary Russian ban on exports of oil and oil products, and Mongolia remains vulnerable in this sector. Mongolia joined the World Trade Organization (WTrO) in 1997. The international donor community pledged over $300 million per year at the Consultative Group Meeting, held in Ulaanbaatar in June 1999. The MPRP government, elected in July 2000, was anxious to improve the investment climate; it also had to deal with a heavy burden of external debt. Falling prices for Mongolia's mainly primary sector exports, widespread opposition to privatization, and adverse effects of weather on agriculture in early 2000 and 2001 restrained real GDP growth. Despite drought problems in 2002, GDP rose 4.0%, followed by a solid 5.0% increase in 2003. The first applications under the land privatization law have been marked by a number of disputes over particular sites. Russia claims Mongolia owes it $11 billion from the Soviet period; any settlement could substantially increase Mongolia's foreign debt burden.