PART ONE:
UNDERSTANDING MONGOLIA
1. History and Geography
Geographic Characteristics. Located in Central Asia, Mongolia is situated between Russia to the north and the People's Republic of China to the east, west and south . With more than 1.5 million square kilometers of territory, Mongolia is the fifth largest country in Asia and ranks seventeenth among all nations. Mongolia is divided into primary natural zones that include mountains primarily in the country's north and west; basins, such as that in which the capital Ulaanbaatar is located; and a mixture of desert and steppe which together cover three-fourths of the country.
Mongolia's Harsh and Challenging Climate. Mongolia's average altitude is almost 1,600 meters above sea level . Its higher altitude combines with the altitude to intensify the semi-arid climate. Winters are long and cold. Average temperatures fall below freezing for six months of the year. Temperatures in January average about -25 degrees Celsius.
Mongolia'sMountainous Terrain. Mongolia's mountainous terrain plays a major role in its climate. The most productive grasslands and forests are found on the protected slopes of mountains. These can receive a significant amount of moisture while the unprotected slopes remain barren and dry. Much of southern Mongolia where the Gobi Desert covers vast areas abutting China is among the harshest climates in the world.
Beautiful Lakes and Rivers. Mongolia is a land of many of the world's most beautiful and pure freshwater lakes, most of which are spread across the northern section of the country. The largest lakes are in the northwest and are rich in fish. The river system is also most extensive in the northern part of the country.
Several of the major rivers of Asia have their origin in Mongolia. Because of the mountainous terrain, there is a great concentration of potential hydropower in the north. Most of the rivers are unsuitable for navigation. Many are used as water sources for livestock and irrigation of fields and pastures.
Rapid Population Growth, Urbanization, and the Coexistence of Nomadic and Sedentary Systems. Mongolia's population is small (2.4 million, in 1997) in contrast to its large area, making it one of the world's least densely populated nations. The rate of population growth is relatively high and with a significant proportion of the population now in their child-bearing years, is expected to increase rapidly, with some estimates projecting a doubling to almost 4.2 million by 2020. Ulaanbaatar holds 25% of the total population. The other urban centers are Darkhan, Erdenet and Choir which, like the capital, are all in the north. Roughly 50% of the total population lives in the urban areas. Beyond the cities the rest of Mongolia is largely pastoral, with animal husbandry (sheep, goats, cattle, camels and horses) representing the main economic activity. There are, in fact, approximately 32 million head of free-ranging livestock in Mongolia, an average of 13 head per person.
From Chinggis Khaan to Sukhbaatar. Mongolia's history spans several thousand years. Most well known to the world is Chinggis Khaan who emerged to dominate Asia almost a thousand years ago. The accomplishments of Chinggis Khaan as he is known to Mongols, united the far flung and competitive clans into a Mongol people as he then led his forces from the windswept steppes of Mongolia to conquer a continent. This achievement caused the New York Times to recently select him as the world's Man of the Millennium in respect of his brilliant political and military capabilities. Following the decline of the Khaans, for several hundred years Mongolia became closely associated with Manchu, until that relationship was severed in 1911. In 1921, Mongolian forces led by Sukhbaatar created a political system based on Marxist principles, one allied closely with the Soviet Union.
The Challenge of a New Governmental and Economic System. After seventy years of a close political, security, and economic relationship with the former Soviet Union and the countries of Eastern Europe, in 1990 Mongolia entered into a period of revolutionary change. This was characterized by a peaceful and successful movement to a democratic form of government committed to the development of a market economy. The loss of the trade relationships and development aid that had been in place with the Soviet Union and CMEA countries resulted in an immediate decline in GNP, but since 1994 economic conditions appear to be improving. Given the abundance of largely undeveloped natural resources, Mongolia holds great promise. There are, however, still significant challenges ahead for the Mongols.
These include the continuing need to transfer resources from public control to the private sector; learning how to create and manage the institutions and infrastructure required to function effectively in a market economy; developing the new knowledge and technical skills that are required; learning how to build effective trading relationships with foreign markets, and protecting against the negative side-effects of market driven economic activity and its tendency to leave some people out of its benefits.
2. Political Conditions
The Constitutional Transformation to Democracy and a Market Economy. A new Constitution embracing democracy and the market system was passed by the Great Hural in 1992.The Constitution took effect on February 12, 1992, changing the nation from the People's Republic of Mongolia to Mongolia. The Constitution makes Mongolia a democratic parliamentary state with independent legislative, executive and judicial branches; guarantees citizens freedom of speech, religion, and other basic human rights, as well as the right to own property and engage in private business activity. The President and the Parliament are elected directly by the people.
Mongolia's Existing Structure of Government. Mongolia is divided into 21 administrative units (provinces) called aimags. The population of cities range in size from 50,000 to over 600,000 in the capital of Ulaanbaatar. The cities are divided into districts. There are 9 districts in Ulaanbaatar. Urban population accounts for about 51 percent of the country's total population and there is a strong tendency for migration from the rural to urban areas. The aimag populations range from 40,000 to approximately 100,000. They are divided into aimag centers and rurai sums or districts around the centers. Sums are comprised of sum centers and bags. The latter (bags) are the lowest level rural administrative. There are a total of 333 sums and 1,564 bags in the country.
The National Debate Over the Provincial Structure. There has been a serious but unresolved debate nationally about whether the country's administrative structure should be reorganized into a considerably smaller number of provinces. One quarter of the population and more than half of Mongolia's industry have become concentrated in the capital due mainly to the lack of policies on population settlement and city planning and the inability of aimags to provide sufficient employment and social and cultural services of the kind required to retain residents. Together with the complete lack of proper coordination and regulation among towns and rural settlements in raw materials extraction and use and production, in technology and labor, finance and economy coupled with a weak infrastructure for economic development the essential conditions required to strengthen local areas did not exist. Without establishing an appropriate territorial and organizational structure that more efficiently and rationally is able to deliver better goods and services of all kinds to the dispersed rural population, it is extremely difficult to raise the social standards of living of a given provincial region to develop industries or to protect and utilize resources efficiently.
3. Economic Conditions
The Need for Value Added, Deep Processing of Mongolia's Products. Sustainable development is achieved by providing deep processing of the country's natural resources and major raw materials, through developing export oriented production, and through producing competitive and high quality products. Mongolia's problem is that very littie value added deep processing, or even intermediate processing of products, exists in its economy. On the whole, like nearly all developing countries, the nation's economy is raw material oriented, with raw materials of the agricultural and mining sectors and semi finished products providing the main export items.
Upgrading the Pool of Skilled Labor. Mongolia's pool of skilled labor, including workers with knowledge of how the market economy works, is too limited at present. Those with such skills are in great demand, but there are, however, not enough people with the skills the country needs for achieving increased competitiveness.
Modernizing the Educational and Scientific Systems. Educational, scientific and technological capability is an essential element of achieving sustainable development in the increasingly global economy found in the modern worid. Expansion and modernization of these sectors are critical in the effort to create a strong and sustainable Mongolia.
Replacing Obsolete Methods and Technologies of Production and Management. A serious difficulty is that the technology and methods of production and management of the state and non-state economic entities and organizations are obsolete in comparison with those readily available in more economically advanced countries. One of the most important challenges for Mongolia is the acquisition and use of modern equipment and methods.
Strengthening the Agricultural Sector. The Mongolian economy has experienced considerable industrialization in recent decades, but the troubled agricultural sector still remains the backbone of the economy. While eighty percent of the total land of Mongolia is suitable for agriculture, this is only in its broadest sense of the term. The land includes relatively fragile grasslands which must be carefully utilized and protected from abuse. Only 1.5 percent of the "agricultural" land is used for crops, 1.0 percent is mowed for hay, and 97 percent is used for pasture. The agricultural sector has important implications throughout the nation's manufacturing sectors, providing the essential material inputs into many processing industries such as leather and shoe manufacture, wool processing, cashmere production, milk production, and bread making.
Helping the Privatized Agricultural System. A privatization programme for agriculture was begun in 1990 and is now essentially complete, with more than 95 percent of livestock in private hands and most of the formerly state-owned farms now joint-stock companies. The results of the changes have been uneven, and as the recent 1997 FAO study of Mongolian agriculture indicates, serious management and financial shortfalls exist in privately held agricultural operations.
A serious difficulty is that agricultural production is subject to the harshness and unpredictable nature of the Mongolian climate. This is characterized by very low winter temperatures, a short growing season, and low, erratic precipitation. A significant amount of expertise and resources must go into ensuring the health of Mongolian agriculture. Mongolia's long term economic strength depends more on its agricultural sector than any other area of activity since it is through agricultural productivity that food is produced and important value added manufacturing activities are supplied with raw materiais for their end use products.
Carefully Developing Mongolia's Bountitul Mineral Resources. In terms of volume and variety of mineral resources, most of which remain undeveloped, Mongolia ranks among Asia's richest countries. Although enormous potential exists in mineral resources, the economic viability of developing much of this natural wealth has not yet been demonstrated. The mining sector is of great importance for Mongolia's economic stability and for the physical infrastructure, especially in the energy sector which is heavily dependent on coal. Mongolia has witnessed an increased interest in the gold mining sector as well as in copper production and in recent years foreign companies have found a somewhat improved environment for investment. It is important to understand, however, that part of Mongolia's development strategy involves identifying areas where value can be added to manufactured and/or processed products, and reducing the system's dependence on commodities which are subject to enormous price fluctuations on world markets.
Upgrading the Transport, Financial, Investment, and Telecommunications Infrastructures. The transport, financial, investment, and communication sectors are characterized by an inadequate infrastructure. This is a serious impediment to economic growth and hinders the flow of production inputs and the distribution of outputs. Inadequate transportation infrastructure is a serious constraint on the development of the domestic market and a challenging obstacle to potential private investment programmes. Mongolia's communications sector is in need of substantial investments in order to facilitate the increased demand for a modern functioning telecommunication system. Such a modern system of communications is essential to advance our economic, foreign trade and investment, educational, political, and social strategies.
Continuing the Structural Transformation to a Market Economy. Structural change measures have focused on downsizing the public sector, establishing a market-oriented economy; promoting the private sector through changes in the legal and institutional frameworks; and expanding and diversifying external relations, including membership in international financial organizations. These efforts have all been important elements in the national development process to date, but there are still steps that need to be taken to effectively implement the changes and to educate Mongolians in their implications and methodologies.
4. Social and Environmental Conditions
Population. The total population of Mongolia reached 2387.1 thousand at the end of 1997. A relatively high rate of annual population growth (about 2.%) occurred between 1960-90. This began to decline from the early 1990s due to factors related to more difficult social and economic conditions. Forty five percent (45%) of the total population is composed of young children and teenagers under the age of 15. People under 35 constitute about 70% of the total Mongolian population.
Job Creation and Unemployment. By the end of 1997 the economically active population constituted 72.5% of the workforce. The number of unemployed people has been increasing despite the growth of the population leading to a rapid increase in the number of the economically active population, particularly among young people.
Health and Health Care. Cardiovascular diseases and cancers have increasingly become major illnesses causing deaths among Mongolians. Among young people problems of dental and oral cavities, of the nasal and larynx passages, and allergic illnesses have rapidly increased. Among the most pressing health problems requiring aggressive efforts are those produced by hazardous waste, the consequences of wrong eating habits, increasing problems of excessive weight, cigarette and alcohol consumption, non-infectious and endemic illnesses, sexually transmitted diseases, and deaths of children and infants, among others.
Protecting infants, Children, and the Most Vulnerable. Although there have been improvements in health care, a high priority must be placed on dealing with issues of infant mortality, acute respiratory infections and non-infectious diseases. This should also be coupled with protecting against the greater vulnerability of children to harm from the negative social impacts that have increased for the most vulnerable segments of society.
Improving Maternal Health. Maternal mortality remains unacceptably high despite its decreasing rates. Mothers giving birth in remote sums and bags are still faced with too many difficulties in receiving emergency health care.
Improving Physical Retabilitation Services. Physical impairment occurs too frequently among Mongolians due to the lack of an adequate rehabilitation component in the health care system. The number of people requiring physical rehabilitation health services is increasing.
Housing. Current housing conditions do not meet modern requirementsfor hygiene and sanitation, ecological protection, architectural quality, and zoning and town planning. Of the total number of Mongolian families, 33% live in gers and 44% in small self-constructed houses and shanties, 22% live in public apartment blocks, and about 1 % in private houses built in accordance with professional standards.
Poverty. In 1997, 24.6% of the total population had incomes below the minimum guaranteed living standard. 54.6% of those below the minimum level were either elderly or children under the age of 16. Of particular concern is the fact that the poverty level has increased by 86% in last two years in comparison to 1995 figures.
Land Degradation and Declining Agricultural Productivity. While Mongolia is the seventeenth largest country in the world in terms of territory, much of the land is not productive, and the productive land is under rapidly increasing pressures that are leading to its increased deterioration. The land available for agricultural production is also decreasing. Grazing land was 141 million hectares in the l960s but has currently dropped to 117 million hectares while the number of livestock has risen to 32 million head.
Soil Erosion. During the past 30 years 46.5% of cultivated land has suffered high to medium levels of erosion and damage. 6.9 ml. hectares ot grazing grassland has been destroyed. The productive capacity of overgrazed grasslands has decreased by almost 5 times and the number of crop species has lessened by nearly a factor of 4 times.
Threatened Forests. Forest reserves take up 17,516 thousand hectares. Over the last 20 years the forested area has decreased by 1,4 thousand hectares, mainly due to forest fires and timber production.
Increasing Desertification. Mongolia's desert area makes up 41.3% of the country's total territory. Over the last 40 years the desert area has increased by 38,000 hectares, of which 88% is newly desertified area located mainly in the Gobi region, with 12% in the northern part of the country. As much as 95% of Mongolia's total land is considered to be highly vulnerable to desertification. In addition, droughts covering as much as 25% of the country occur every two to three years, and drought reaching half the land occurs every four to five years. Due to climatic changes the desertification process has spread even more widely, which is reflected in the increased numbers of lakes and rivers that are drying up, the worsened quality and growth levels of pasture plants, soil and water salinization and loss of productive capacity, and increasing sand movement.
Threats to Mongolia's Biodiversity. Mongolia has over 3,000 species of flowers, 426 species of birds, 22 species of reptiles, 8 species of amphibians, 75 species of fish, 136 species of mammals, and 12 thousand species of insects. An estimated 200 species of Mongolia's flora and fauna are at the brink of extinction. 100 species of animals classified as extremely rare, and 128 species of plants requiring immediate protection have been identified and included in the Red Book of Mongolia.
Threats to Mongolia's Water Resources. The annual water reserves available tor use In Mongolia total 34.6 cubic km. Although this is relatively low in absolute volume compared to other countries, given Mongolia's small population the amount of water per person is substantial. This is deceiving given climatic trends and the increased process of desertification. It is likely that the amount of areas under constant snow cover will diminish significantly with the result that in winter time the nomadic people and their herds in rural areas will suffer water shortages. This will be coupled with an increase in surface water evaporation followed with higher rates of drying up of springs, oasis, and well water supplies.
Severe Threats from Natural Disasters. Loss of life and extensive damage are caused by natural disasters in Mongolia every year. Almost half of the atmospheric related disasters, totaling between 25-40 occurrences a year, result in substantial economic loss and some loss of human life. Over the last 30 years a total of 4,260 fires have occurred covering about 2,360 thousand hectares of forest land. Fires, heavy rains and snowfall, river flooding, sand and dust storms, drought, and blizzards are among our primary natural disasters.
The Increasing Dangers from Toxic Chemicals. Over 100,000 different chemical substances are being sold in the global marketplace. Only a few thousand have been evaluated to determine the ways in which they can harm people, plants, and animals. Many of the chemicals are toxic and have serious health and polluting effects that may take years before they show up as cancers or other diseases. As has now been discovered in industrialized countries such as the United States, it is absolutely vital that people be protected by government regulation of the use of chemicals. Mongolia imports more than 1,000 chemicals, over 3,000 medicaments and over 100 pesticides. Strong government regulation is required to protect Mongolia's people and workers from the harmful effects of chemicals. |