Economy of Mongolia
Mongolia has made great progress toward its transition to a market-based system since the early 1990s. Until 1990, the Mongolian economy was strictly based on the centrally planned model that had been adopted almost six decades earlier. To accelerate the transition process the Government of Mongolia launched a series of reforms starting in 1991. These reforms included: the phased liberalization of state-controlled prices and tariffs, privatization of state owned enterprises, establishment of a two-tier banking system, liberalization of foreign trade, adoption of a floating exchange rate system, implementation of tight monetary and fiscal policies aimed at reducing inflation, adoption and enforcement of laws to encourage fair competition, and creating a favorable environment for private sector development. Moreover, a law to regulate social welfare has been adopted as well as development of a broader legal framework.
The successful undertaking of initial steps in the transition to the market economy enabled positive economic growth in the last 9 years and reduction of the inflation rate to single digit levels. Macroeconomic stabilization continued and led to gradual improvements in overall economic performance. The GDP growth rate increased to 5,3 per cent in 2003, the highest level since 1990s. If there were no dzuds (disaster for the Mongolian pastoral animal husbandry resulting from excessive snow) and SARS breakouts, economic growth would have reached more than 5.3 percent in 2003. The Government strategies aim to further deepen economic and social reforms in order to facilitate a smooth final-phase transition to a market-oriented economy.
Key objectives are the maintaining of mac-roeconomic stabilization and acceleration of economic growth, deepening of economic reform and economic restructuring as well as fiscal and financial sector reforms, infrastructure sector reform and privatisation, national industry development policies; and promotion of export-oriented sectors of the economy. Priority is also given to social sector reform policies and poverty reduction strategies. Governance reform and the rationalization and streamlining of public administration are also important elements of the policy framework. In order to address the problems arisen from economic reform process in Mongolia, the Government of Mongolia launched a series of activities in 2003.
These included: privatisation of most valued state owned companies and land, promotion of private led economy, adoption of a floating exchange rate system, implementation of tight monetary and fiscal policies, adoption and enforcement of laws to encourage fair competition. Tn November 2003 in Tokyo hold 10lh Mongolia Consultative Group Meeting and donors have promised 334 millions USD to support Mongolia's economic and social development. In the end 2003, as result of long-term effective discussions and agreements between the Governments of Russia and Mongolia, the country has paid all its debts to Russian Federation. This will positively effect to the economic and social development of Mongolia.
*Dzud
Disaster for the Mongolian pastoral animal husbandry resulting from excessive snow. Dzud is a fact of life for Mongolian herders, who have developed strategies for coping with, and adapting to, their harsh environment. Heavy accumulations of snow or ice crusts covering pastures are the most common forms of dzud (white dzud). In situations where such precipitation is the primary source of drinking water for domestic livestock, the absence of snow or ice at winter pastures is also a type of dzud (black dzud). Since forage production on natural pasture is almost entirely dependent on rainfall during the short, summer growing period, dzud conditions are exacerbated by drought in the preceding summer, so that there is less forage available for over-wintering animals. Historically, major dzud have occurred roughly every seven years, but more experienced herders are not surprised when they occur in consecutive years, as has happened recently or in 1999-2000 and 2000-2001.
