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Mongolia: Economic Role
Country Study > Chapter 5 > National Security > The Armed Forces > Economic Role


The army over the years has had a generally positive impact on the national economy. Although the work-force shortages and military expenses of World War II imposed austerity on personal consumption and retarded social development and the economy's civilian sector, many soldiers acquired valuable technical skills. In 1934 the Choybalsan industrial combine with 1,500 workers was established to produce cloth, clothing, saddles, harnesses, fur coats, and footwear for the army. By 1939 its production almost completely supplied the army with clothing and individual equipment. Beginning in the early 1950s, wartime facilities turned to producing items both for the civilian sector and for export.

Transportation was another industry intended initially as much for military as for civilian use. In 1929 the Soviet Union aided in the establishment of Mongoltrans (Mongolian Transportation), a transportation company with approximately 100 trucks and buses as well as a repair shop. Mongoltrans was a paramilitary organization from the beginning; its personnel received military training and transport was diverted to military tasks on call. Air transport was established, in 1925, also with Soviet assistance. In 1989 it was operated as part of the air force both for military and for civilian use.

The Military Construction Administration, developed out of the Darhan Military Construction Project in the late 1950s, continued in the late 1980s as a paramilitary organization under the Mongolian army. Between 1981 and 1984, military construction troops helped to establish the new city of Erdenet; they built more than 1,000 installations and enterprises -- including state farms, a shoe factory in Ulaanbaatar, and an international camp for young pioneers -- for the civilian economy.

Data as of June 1989

Last Updated: June 1989

Editor's Note: Country Studies included here were published between 1988 and 1998. The Country study for Mongolia was first published in 1989. Where available, the data has been updated through 2008. The date at the bottom of each section will indicate the time period of the data. Information on some countries may no longer be up to date. See the "Research Completed" date at the beginning of each study on the Title Page or the "Data as of" date at the end of each section of text. This information is included due to its comprehensiveness and for historical purposes.

Note that current information from the CIA World Factbook, U.S. Department of State Background Notes, Australia's Department of Foreign Affairs and Trade Country Briefs, the UK's Foreign and Commonwealth Office's Country Profiles, and the World Bank can be found on

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