* Mongolian economics








Mongolian Economics


Figure 1.--The first satellite countryin the Soviet Union's empire was Mongolia. There was, however, resistnce. Stalin and his henchmen orchestrated the essential irradication of Buddhism, killing all the lamas they could get their hands on and then proceeding to murder of 15 percent of the country's population. Some substantial infrastructure projects were built and a foundatiom of a modern school system laid. Mongolia under the Communists remained, however, a largely medieval country of nomadic farmers. These boys arebriniing water ome, and this was a village near the capital. The caption here read, "Ingenuity. "Two children carry water in a unique fashion from the river to their home in a small village near Ulan Batar, Mongolia." Source: Photo and basic caption informatioinfrom an officil Soviet source. The pohotograph was dated October 30, 1969.

Mongolia is a vast landlocked country in East Central Asia, srounded by Russia on the north and China on the south, east and west. It is dominated by the vast Eurasian Steppe. While the country is vast, it has a very small population, only about 3 million people. Most in the West have given little thought to Mongolia and the Mongolian economy. In fact Mongolia in connection with China has played a pivotal role in world history and economics. When China was strong and united it pressured the Mongols and other steppe people to move west. This was the source of pressure on Europeans. It was attacks by Steppe people that drove the Germanic peoples west into the Roman Empire (4th-6th centuries AD). And some Steppe people actually reached Europe, including the Avars and Huns (5th century AD). The most famous of course were the Mongols themselves led by Genghis Kahn. In this case the Mongols had conquered China anf then turned west. Mongolia from time immemorial has had an economy based on grazing livestock on the vast Asian steppe. Mongolia's rise to empire was based on the fact that the Steppe was crossed by the fabeled Silk Road between China and Europe--a huge source of wealth. The advent of maitime commerce between Asia and Europe undermined the Silk Road--the principal source of wealth for the Mongol Empire. Mongolia never adapted a culture that pursued knowledge and technology and thus as these cultural elements became increasingly important, Mongolia receeeded to the backwaters of world history and its opeople descended intom poverty, becoming one of the poorest countries in the world. In the 20th century, the country's geographic position forced it into the Communist system and poverty entrenching destructive socialist economics. The country had been traditionally associated with China, but after the Russian Revolution (1917), the Soviet Union became the dominant influence. Socialist economic policies forced on Mongolia did little to modernize tge country, although the Soviets offered some aid. Russia abruptly stopped its aid after the disintegration of the Soviet Union (1992). This proved to be a benefit for ther country because it forced the adoption of free market reforms. For the next decade, Mongolia suffered a deep recession, following which it has made substantial progress with major economic reforms, centered around the adoption of free-market economic structure and privatization of the formerly highly inefficent state-run economy. As in the Soviet Union, state enterprises produced good and services that were worth less than the raw material inputs used to produce them. Mongolia's economy is still largely based on agriculture, but has rapidly grown in importance. Mongolia is rich in copper, gold, coal, molybdenum, fluorspar, uranium, tin and tungsten deposits, which has been attracting foreign direct investment. As a result, copper, coal, molybdenum, tin, tungsten and gold account for a large part of industrial production.

Geography

Mongolia is a vast landlocked country in East Central Asia, surounded by Russia on the north and China on the south, east and west. It is dominated by the vast Eurasian Steppe. While the country is vast, it has a very small population, only about 3 million people. Mongolia's economy has been largely determined by geography. Thhe geograpphy means taht the country has a harsh climate -- a counbtry of high altitude, extreme temperature fluctuations, long winters, and low precipitation provides. This means there is a very limited potential for agricultural development. And the growing season is very short only 95-110 days. All of this means that the land is largely unsuited for agriculture. It is not a desert, but the agriculyural potential is very low compared to all non-desert countries. As a result, the economy is largely heavily focused on nomadic animal husbandry. Some 75 percent of the land is allocated to pasture.

History

Most in the West have given little thought to Mongolia and the Mongolian economy. In fact Mongolia in connection with China has played a pivotal role in world history and economics. When China was strong and united it pressured the Mongols and other steppe people to move west. This was the source of pressure on Europeans. It was attacks by Steppe people that drove the Germanic peoples west into the Roman Empire (4th-6th centuries AD). And some Steppe people actually reached Europe, including the Avars and Huns (5th century AD). The most famous of course were the Mongols themselves led by Genghis Kahn. In this case the Mongols had conquered China anf then turned west. Mongolia from time immemorial has had an economy based on grazing livestock on the vast Asian steppe. Mongolia's rise to empire was based on the fact that the Steppe was crossed by the fabeled Silk Road between China and Europe--a huge source of wealth. The advent of maitime commerce between Asia and Europe undermined the Silk Road--the principal source of wealth for the Mongol Empire. Mongolia never adopted a culture that pursued knowledge and technology and thus as these cultural elements became increasingly important, Mongolia receeeded to the backwaters of world history and its opeople descended into poverty, becoming one of the poorest countries in the world. In the 20th century, the country's geographic position forced it into the Communist system and poverty-entrenching destructive socialist economics. The country had been traditionally associated with China, but after the Russian Revolution (1917), the Soviet Union became the dominant influence. Socialist economic policies forced on Mongolia did little to modernize the country, although the Soviets and Eastern Euopean satellites, especially Hungary, did provide some aid. Russia abruptly stopped its aid after the disintegration of the Soviet Union (1992). This actually proved to be a benefit for the country because it forced the adoption of free market reforms. For the next decade, Mongolia suffered a deep recession, following which it has made substantial progress with major economic reforms, centered around the adoption of free-market economic structure and privatization of the formerly highly inefficent state-run economy. As in the Soviet Union, state enterprises produced good and services that were worth less than the raw material inputs used to produce them.

Sectors

Mongolia's economy is still largely based on animal husbandry, but other sectors have grown in importance. Communist planners attemoted to expand the agricultural sector, but with limited success. The colectivized animal husbandey, with little positive results (20th century). Mongolia has significan mineral andd enrrgy resources which are onky beginning to be developed. It is rich in copper, gold, coal, molybdenum, fluorspar, uranium, tin and tungsten deposits. The primary energfy resource is coal. These resoirces in recent years have attracted foreign direct investment. As a result, copper, coal, molybdenum, tin, tungsten and gold mining now make a valuable contribution to the economy. There is now a growing tourist industry.







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Created: 8:44 AM 2/15/2016
Last updated: 1:07 PM 12/26/2020