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COUNTRY PROFILES


PROFILE

Country Profile

Area: 1,564,116 sq km (602,829 sq mi)
Population: 3,133,318 (July 2011 estimate)
Capital City: Ulaanbaatar (literally, “Red Hero”) Population: 949,000
People: 94.9% Khalkha Mongols, 5% Turkic (mostly Kazakh), 0.1% other (inc Chinese and Russian)
Language(s): Khalkha Mongol (90%), Kazakh, Russian
Religion(s): Buddhist Lamaist 50%, Shamanist and Christian 6%, Muslim 4%, None 40%.
Currency: Togrog (MNT)
Major Political Parties: 13 political parties took part in the last general election, which took place in June 2008. The next election for Great Khural seats will be in June 2012. The last presidential election took place in May 2009 and the next will take place in May 2013.The Mongolians People’s Revolutionary Party (MPRP) won 45 seats, the Democratic Party (DP) won 28 seats and the Civil Movement, the Civil Will Party and an Independent MP won one seat each. After lengthy negotiations the MPRP and the DP formed a coalition government. The MPRP dropped the word “Revolutionary” from their title in late 2010 and are now the Mongolian People’s Party (MPP) (see History AND Politics below). The MPP currently hold eleven Ministerial portfolios (including the Prime Minister), the DP seven.
Government: Supreme legislative power is vested in the (unicameral) Parliament, the Great Khural. The 76 members are elected by universal adult suffrage for four years. They recognise the President on his election and appoint the Prime Minister (subject to the President's agreement) and members of the Cabinet, which is the highest executive body. The President is the Head of State and Commander-in-Chief of the Armed Forces, and is directly elected for a term of four years. The last Presidential elections took place in May 2009. The Cabinet is nominated by the President in consultation with the Prime Minister and confirmed by the Great Khural. President: Tsakhia Elbegdorj (DP) (since 18 June 2009)
Prime Minister: Sukhbaatar Batbold (MPP) (since 29 October 2009)
Foreign Minister: Gombojav Zandanshatar (MPP)
Membership of International Groupings/Organisations: Asian Development Bank (ADB), Asia –Europe Meeting (ASEM), Customs Co-operation Council (CCC), European Bank for Reconstruction and Development (EBRD), Economic and Social Commission for Asia and the Pacific (ESCAP), Food and Agriculture Organisation (FAO), International Atomic Energy Agency (IAEA), International Bank for Reconstruction and Development (World Bank), International Civil Aviation Organisation (ICAO), International Criminal Police Organisation (INTERPOL), International Development Association (IDA), International Finance Corporation (IFC), International Fund for Agricultural Development (IFAD), International Labour Organisation (ILO), International Monetary Fund (IMF), International Telecommunications Union (ITU), Non-Aligned Movement (NAM), United Nations (UN), United Nations Educational, Scientific and Cultural Organisation (UNESCO), United Nations Population Fund (UNFPA), United Nations Children's Fund (UNICEF), United Nations Industrial Development Organisation (UNIDO), Universal Postal Union (UPU), World Health Organisation (WHO), International Federation of Red Cross and red Crescent Societies, World Intellectual Property Organisation (WIPO), World Meteorological Organisation (WMO).

Mongolia entered into a Partnership and Cooperation Agreement (PCA) with the European Union in December 2010.

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ECONOMY

Key Statistics

GDP: US$6.125bn (2010 estimate – CIA)
GDP per head: US$3600 (purchasing power parity; 2010 estimate – CIA)
Annual Growth: 8.5% (2010 estimate) real growth: 6.1% (2010 estimate – CIA)
Inflation: 9% (2007), 26.8% (2008), 6.3% (2009), 13% (2010 estimate). May 2011: 2.8%.
Major Industries: Mining, cashmere, agriculture.
Major trading partners: China, Russia, United States, Japan.
Exchange rate: GBP £1 = 1988 Togrogs, US$1 = 1,232 Togrogs (February 2011)

Background

In 1991 Mongolia began a rapid transition from central planning to a market-oriented economy. The collapse of the USSR and Mongolia’s links into the Soviet trading system led to dislocation, a sharp depression and increasing poverty in the first half of the 1990s as attempts were made to establish the foundations for a market economy. Reforms included price and trade liberalisation, the reduction of lending to state owned enterprises, the creation of a commercial banking system and a large privatisation programme which saw the proportion of the economy in private hands rise from 4% to over 70% between 1990 and 2000.

Mongolia ranks 150th in the world in terms of nominal GDP (2009 figures). A fifth of the population live on less than $1.25 a day. Between 30%-40% of the population is still nomadic or semi-nomadic. The country's reliance on mineral resources and agriculture makes it vulnerable to price fluctuations and natural disasters, and the combination of a fall in the price of copper in 2008, a harsh winter in 2009 and the global financial crisis reduced GDP growth in 2009 from 8% to 2.7%. Despite a recent period of strong GDP growth, there has been little decline in the number of people living in poverty, still estimated at between 30-35% of the population. The figure rises to 40% in rural areas.

Mining and Minerals

Mongolia has rich natural resources, principally gold, copper, coal, and rare earth minerals. The country’s gold and copper reserves (including the Oyu Tolgoi mine) are believed to be among the largest in the world. The mining sector accounts for 22.4% (2009) of Mongolia's GDP and half the country’s exports, and attracts the majority of foreign investment. The signature in October 2009 of an agreement between Rio Tinto and the Mongolian government to exploit the Oyu Tolgoi copper deposit in the South Gobi is likely to have a significant impact on the economy (see Trade and Investment below).

Agriculture

Agriculture accounts for more than a fifth of GDP. Some 40% of the Mongolian workforce is employed in traditional nomadic livestock herding. Between 1999 and 2002 a series of exceptionally harsh winters and summer droughts killed about a fifth of the country’s livestock, increasing flight to the cities, in particular the capital. The effects of this death of livestock were compounded by a fall in prices of Mongolia’s primary sector exports and opposition to privatisation.

Recent Economic Developments

The economy is making a strong recovery from the global downturn, with growth this year expected to be above 10%, driven by mineral exports, the private sector and a large projected increase in government spending. But the IMF believe that it is in danger of overheating. Inflation was running at 14% year-on-year in December 2010 and is projected to rise to 20% by the end of 2011. An IMF Mission at the end of January 2011 recommended that the 2011 budget should be amended to reduce government spending substantially, that the Bank of Mongolia (the country’s Central Bank) should intervene more actively on interest rates to curb inflation, and that priority should be given to measures to alleviate poverty. An IMF report published in March 2011 criticised the government’s fiscal policy, citing the risk inherent in the ‘high spend’ approach should there be a fall in commodity prices such as happened in 2008. There is also danger that the country’s poorest citizens (already badly affected by rising food prices) would be hardest hit. The IMF concluded that higher interest rates from the BoM would help to prevent a dangerous wage-price spiral.

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HISTORY

The Mongolian State was founded in 1206 by Genghis Khan. From 1691 Mongolia was part of the Manchu Empire. After the fall of the Manchus in 1911, the area formerly known as Outer Mongolia declared independence.

Mongolia won independence from China in 1921 with Soviet support. The Mongolian People’s Revolutionary Party (MPRP), modelled on the Communist Party, remained in power as the sole political party until 1990, when the collapse of the Soviet Union brought about a largely peaceful democratic revolution. The MPRP won elections in 1990 and 1992, but was defeated by the Democratic Union Coalition in 1996. The MPRP won back power in 2000, but lost their majority in 2004 and entered into a coalition with the democratic parties until 2008.

The MPRP again won a large majority in 2008 (see paragraph 5), but allegations of vote rigging by the Democratic Party (DP) and other smaller parties, many of which won no seats at all, led to riots in the centre of Ulaanbaatar. Five people, including one policeman, were killed and over 300 injured. The MPRP headquarters was destroyed by fire and nearby buildings, including the Palace of Culture and the Philharmonia, were looted. President Enkhbayar declared a four-day state of emergency (the first in Mongolia’s history) to allow calm to be restored. This included a curfew, a prohibition on television broadcasting other than by the state television network and a ban on the sale of alcohol. In the interests of national unity, and after protracted negotiations, the MPRP went into a coalition with the DP. The Party dropped Revolutionary from its name in late 2010 to become the Mongolian People’s Party (MPP). The Prime Minister and most of the Cabinet are MPP members.

In April 2011 several hundred herders and horsemen rode into Ulaanbaatar to protest about the damage they claim is being done to Mongolian grasslands by the international mining companies. The protestors are calling for early elections in the hope that they can elect politicians who will take a harder line on the foreign mining companies. Dissatisfaction is already high among these herders who have been forced into the slums of Ulaanbaatar by harsh weather conditions.

BBC News Country Timeline: Mongolia (http://news.bbc.co.uk/hi/english/world/asia-pacific/newsid_1235000/1235612.stm)

The Bilateral Relationship

In 1963 the UK became the first western country to establish diplomatic relations with Mongolia. This long association led the Mongolians to look to the UK in particular for advice on issues related to their transition to democracy and a market economy. President Elbegdorj studied at Leeds University in the 1985-86; Mrs. Oyun, a former Foreign Minister, completed her Doctorate in Mining Metallurgy at Cambridge University and worked for Rio Tinto in London before returning to Mongolia in 1998. Amongst Mongolians who have been awarded FCO Chevening Scholarships, which fund a year of postgraduate study in the UK, are former Prime Minister, Amarjargal, and both the current Prime Minister, Batbold, and a previous Foreign Minister, Nayamosor Tuya.

Following a UK initiative, UK-Mongolia Round Tables have been held approximately every two years since 1987. These have provided an opportunity for parliamentarians, businessmen and academics to make contact and to identify practical steps to develop trade and other bilateral links in a wide variety of fields. Lord Malloch Brown led the British delegation to the last Round Table, which took place on 13-14 March 2008 in Ulaanbaatar.

Recent Visits

The Duke of York has visited Mongolia three times; as representative of The Queen at the 800th anniversary of the founding of the Mongolian state in 2006 and as Special Representative for International Trade and Investment in 2007 and 2008. In December 2009 Zorigt, Minister for Minerals and Energy, hosted a Mongolia Investment Forum in London. There are regular exchanges of visits by parliamentarians. The British Group of the Inter Parliamentary Union visited in October 2008 and the All-Party Parliamentary Group visited in May 2011. At around the same time, the Mongolian British Chamber of Commerce (BMCC) also made a visit, with a group of UK business people from the private and banking sector (including Barclays Bank) meeting like-minded Mongolian business people to exchange ideas on how best to maintain good business relations. FCO Minister Jeremy Browne made a successful visit to Mongolia on 29-31 May 2011.

Diplomatic Representation

Miss Thorda Abbott-Watt was appointed British Ambassador to Mongolia in January 2011, her second term as Ambassador to Mongolia. The British Embassy is located at 30 Peace Avenue, in the Bayanzurkh District of Ulaanbaatar. Consular and commercial information is available on the Embassy web site at http://www.ukinmongolia.fco.gov.uk (http://www.ukinmongolia.fco.gov.uk/)

His Excellency Mr Bulgaa Altangerel, appointed in May 2008, is the Mongolian Ambassador to Britain. The Mongolian Embassy in the UK is located at 7-8 Kensington Court, London W8 5DL. There is further information about the Embassy on their website at: http://www.embassyinmongolia.co.uk (http://www.embassyinmongolia.co.uk) .

Mongolia’s relations with other countries

Mongolia's Relations with its Regional Neighbours

The history of Mongolia in the 20th century was closely bound to that of the Soviet Union. Relations with Russia remain close. Many of Mongolia’s cities, including the capital, Ulaanbaatar, resemble their Soviet counterparts. Mongolia receives oil and energy from Russia and there is a Mongolian-Soviet joint copper and molybdenum mining enterprise at Erdenet. Putin visited Mongolia in 2000 while he was President, and paid a further visit in May 2009 as Prime Minister.

Relations with China have improved in the last decade. China provides a market for Mongolian copper and cashmere, and exports food to Mongolia. Chinese Vice President Xi Jinping visited Mongolia in June 2008. 2009 marked the 60th anniversary of the establishment of diplomatic relations between Mongolia and China. Prime Minister Bayar paid a working visit to China in April 2009 when he paid tribute to the growing closeness of the two countries.

Relations are also close with South Korea, which has a Mongolian population estimated to be in the region of 20,000-30,000, and with Japan, Mongolia's largest aid donor.

Other Bilateral Relationships

Mongolia has close a close relationship with the US which is a major aid donor. In total 19 countries currently have bilateral embassies in Ulaanbaatar. Of the EU member states, Bulgaria, the Czech Republic, France, Germany and the UK have embassies in Ulaanbaatar. The Netherlands have an Embassy Liaison Office.

Peacekeeping

Mongolia is an active participant in UN sponsored peacekeeping activities, with (in February 2011) 190 troops in Afghanistan, 150 troops in Sierra Leone, four officers in Western Sahara and two officers in both Sudan and the DRC . This contribution is found from armed forces of only 8,000, so is proportionately a significant part of Mongolia's military mission.

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GEOGRAPHY

Mongolia is a landlocked country more than six times the size of the UK located between Russia and China. It is one of the highest countries in the world, with an average elevation of 1,580 metres Ulaanbaatar lies at 1,351 metres above sea level. Geographically the country encompasses six distinct zones: high mountains, steppe, forest steppe, dessert steppe, taiga and desert. The southern third of Mongolia is dominated by the Gobi Desert.

Mongolia has an extreme continental climate with long cold winters and short hot summers, when most of the precipitation falls. Temperatures in the South Gobi range from -40°C in winter to +38°C in summer. The country is very dry, particularly in the south, with cloudless blue skies for 70% of the year. Summer weather is characterised by unpredictability, with wide variations in temperature and precipitation; this impacts on both people and livestock.

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TRADE AND INVESTMENT

The UK exported £11.1 million worth of goods to Mongolia in 2010 with major exports including road vehicles (mainly cars); machinery specialized for particular industries (in particular stone-crushing equipment) and power generating equipment (gas turbines). Imports from Mongolia were worth £8.6 million, primarily clothing (especially items such as jerseys, cardigans, and waistcoats) and cashmere.

The largest UK investment in Mongolia is the Oyu Tolgoi copper and gold mine in the South Gobi. The project will require capital expenditure of US$5 billion, including more than $2 billion in 2011. The mine has the potential to operate for more than 50 years. Production is expected to begin in the second half of 2012. Once production begins, Oyu Tolgoi will produce 450,000 tonnes of copper a year (about 3% of global supply) and 330,000 ounces of gold. The project is expected to account for over 30% of government revenue and to increase Mongolian GDP by more than 30%. It has the potential to transform the economy, enabling the significant investment in health provision, education and basic infrastructure needed to reduce current levels of poverty.

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POLITICS

The President

The President is the head of state, Commander in Chief of the armed forces and head of the National Security Council. Constitutionally he has many powers, including the power to propose a candidate for Prime Minister, to dissolve Parliament, to initiate legislation and to issue decrees. In the absence or incapacity of the President, the Speaker takes his place.

Presidential candidates are nominated by the parties represented in parliament. The President is elected for a four year term. He may stand for election for a second term, but not a third.

The current incumbent, Tsakhia Elbegdorj, was elected in June 2009. The President, who must renounce political affiliations on assuming office, formerly led the Democratic Party.

Parliment

Legislative power rests with the (unicameral) Great State Khural, or Parliament, which draws up new laws and approves the annual budget. It may change the Constitution only if two thirds of its members vote in favour. It can be dissolved:

by the President,

-- on the resignation of the Prime Minister,

-- on the resignation of half the Cabinet (there are currently 13 members) or

its members themselves vote for dissolution.

The Khural has 76 seats, for which elections are held every four years. The last elections were held in June 2008. The Mongolian People’s Revolutionary Party (MPRP) won 46 seats, the Democratic Party (DC) won 27 and smaller parties won the remaining three seats.

Government and the Prime Minister

The Prime Minister is nominated by the President but must be approved by Parliament as a whole. The Cabinet is nominated by the Prime Minister in consultation with the President but must be also approved by Parliament.

Sukhbaatar Batbold, formerly Foreign Minister, has been Prime Minister since October 2009.

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HUMAN RIGHTS

Mongolia is a State Party to all the key UN Human Rights Conventions. An independent Human Rights Commission was established in 2001 and receives substantial support from the UNDP to develop human rights awareness. This remains low among the general population and among the police in particular. There is also continuing concern over the conditions in pre-trial detention centres, and in prisons more widely. State secrecy laws inhibit media reporting: the application of capital punishment to an individual remains a state secret and relatives are not informed of executions. The Embassy actively supports human rights NGOs.

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Last Updated: August 2011

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