ABOUT MONGOLIA

FACTS ON MONGOLIA

ADMINISTRATIVE STRUCTURE

Power is shared between the President, the Parliament (State Great Khural), the Prime Minister's ten-member cabinet and the Supreme Court. The President and Parliamentary Members are elected directly by the people at two different elections. The Prime Minister is nominated from the party with the largest number of seats in Parliament.
Only the Parliament has legislative power. It determines the basis of domestic and foreign policy, approves and makes changes in laws, determines and announces presidential and parliamentary elections, elects members of the judiciary and the Supreme Court, appoints and dismisses government members, defines the state financial credit, monetary and tax policies and sets base guidelines for the socioeconomic development of the country. It approves and dissolves the territorial and administrative units and regulates the system and the organisational structure of these units. It has Spring and Autumn sessions and consists of 76 full time members elected for four years.
The territories of Mongolia are administratively divided into 21 regions - 18 Aimags and 3 cities. Each Aimag is generally divided into Sums that are further divided into smaller units called bags. The capital city has districts and sub districts.

ECONOMY

Mongolia has a severe climate, dispersed population and wide expanses of unproductive land. Economic activities primarily focus on agriculture, breeding of livestock and mineral products. Until 1990, Mongolian economic development had been directed by a series of Soviet-style central plans, and in the 1970's, mineral resource development had been conducted with the assistance of the Soviet Union, Czechoslovakia and Bulgaria.

Since 1990, Mongolia's economy has suffered substantially due to the withdrawal of Soviet Aid for development. However, liberalisation seems to have put its positive effect on the economy at last, starting from boosting small scale agricultural output; both agricultural and industrial growth has been positive since 1994. The decline in GNP, the devaluation of the togrog and continued rapid population growth contributed to a decline in real incomes after 1990. By 1996, the average monthly earnings of an urban family of four were MNT40,000 and of a rural family MNT30,000. An estimated 36% of the population lives in poverty.

Foreign Direct Investment (FDI) in Mongolia by non-Soviet block economies began with the introduction of the market oriented economy in 1990. In 1998, investment sources at current prices consisted of: state and local budgets MNT29 billion, bank loans MNT15 billion, own investments MNT62.9 billion and foreign loans and assistance MNT 100.2 billion. There was a total investment of MNT208 billion, of which MNT57.2 billion was spent on construction and major improvements. Foreign investment amounted to 48.2% of total investment.
Steps towards privatisation of state-owned enterprises and other economic reforms continued with the introduction in 1991, which became the cornerstone of the government's turn towards the private sector. Some 44% of state-owned assets were transferred to the private sector. Privatisation has positively affected the development of small and medium sized enterprises, providing strong incentives for the establishment of new businesses. In the industry and tourism sectors, joint ventures between the public and private sectors have become more common.