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Map of Mongolia

Map of Mongolia.
flag of Mongolia.

Mongolia

Bilateral Linkages

Relations are friendly, though contact has been limited and New Zealand interests are not substantial. In April 2005, New Zealand and Mongolia celebrated 30 years of diplomatic relations. The New Zealand Embassy in Beijing, which is accredited to Mongolia, makes annual visits. The Mongolian Ambassador to New Zealand is resident in Beijing. Trade is minimal.

New Zealand is perhaps best known in Mongolian government circles for providing the model for its public sector reform. The Mongolian Public Sector Finance and Administration Law was largely influenced by the New Zealand experience and New Zealand expertise was accessed by the ADB and World Bank to work on projects assisting the Mongolian government with implementation.

New Zealand and Mongolia share common views on a range of issues of importance to New Zealand, including disarmament and the environment. Over the past decade we have been partners on human rights issues, working together in international and regional forums such as the Asia Pacific Framework for the Promotion and Protection of Human Rights. We also work together in the ASEAN Regional Forum.

Some modest New Zealand official aid programmes remain in Mongolia. Small numbers of Mongolian officials participate in the English Language Training for Officials (ELTO) programme each year. Through this programme, many of Mongolia’s young diplomats and other civil servants have studied in New Zealand for seven-month periods at one time or another. A small Head of Mission grants fund is administered from the Beijing Embassy and Mongolian projects are able to access the regional contestable fund, the Asia Development Assistance Facility (ADAF).

In August 2008 the Governor General of New Zealand, the Honourable Anand Satyanand made New Zealand’s first State Visit to Mongolia. The visit came in conjunction with representing New Zealand at the opening ceremony of the Beijing Olympic Games. In March 2007, then Chairman of the State Great Hural (Speaker of Mongolia’s Parliament) Mr Nyamdorj Tsend visited New Zealand as a guest of the New Zealand Parliament. In 2003, Mongolia hosted the Fifth International Conference on New or Restored Democracies, and the then Minister of Foreign Affairs and Trade, Hon Phil Goff, attended and spoke at this conference. In 1997, President Ochirbat Punsalmaa visited New Zealand, which was the first visit by a Mongolian Head of State.

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Key facts

Geography/Demographics

Land Area - 1,566,500 sq km
Population - 2.9 million
Capital City - Ulaanbaatar (population approx 900,000)
Religion - No official state religion. Largest religion is Buddhism.
Official Language - Khalkha Mongol.
Currency - Togrog (MNT).
Exchange Rate - 1,165 Togrogs = US$1 (average 2008)

Political

Political System - Parliamentary Republic
National Government - Supreme legislative power is vested in the State Great Khural (Parliament) elected by universal adult suffrage for four years. The Great Khural recognizes the President on his popular election (for a four-year term) and appoints the Prime Minister (subject to the President’s agreement) and members of the Cabinet. The President is the Head of State and Commander-in-Chief of the Armed Forces.
National Legislature - A single-chamber parliament, the State Great Khural with 76 members.
Last Election - Parliamentary: 29 June 2008, Presidential: 24 May 2009
Next Election Due - Parliamentary: June 2012, Presidential: May 2013
Head of State - The President, currently Tsakhia ELBEGDORJ
Head of Government - Prime Minister: Sanjaagiin BAYAR (appointed 22 November 2007)

Key Ministers:

First Deputy Prime Minister
Noroviin ALTANHUYGA, Deputy Prime Minister
Miyegombyn ENKHBOLD, External Relations
Sukhbaataryn BATBOLD, Defence
Luvsanvandangiin BOLD, Finance
Sangajavyn BAYARTSOGT, Mining and Energy
Dashdorjiin ZORIGT, Justice & Internal Affairs
Tsendiin NYAMDORJ

Main Political Parties:


The Mongolian People's Revolutionary Party (MPRP)
The opposition Democratic Party (DP)

Economic

GDP - (US$) 3.8 billion (2007) Economist Intelligence Unit (EIU)
GDP Growth (real) - 9% (2008) Economist Intelligence Unit (EIU)
GDP Breakdown - Industry (including mining): 35% - Agriculture: 20% - Transport & Communications: 9% - Trade 7% (2007) - Economist Intelligence Unit (EIU)
GDP per capita - US$1, 000 (2007) Economist Intelligence Unit (EIU)
Main imports - (US$) Mineral Fuels $569m - Machinery $265m - Vehicles $192m (2007)
Main exports - (US$) Ore, Slag $1,086m - Semi-precious stones $235m - Wool $193m (2007) UN Comtrade Database
Current account - (US$) -$108.9m (2006) Economist Intelligence Unit (EIU)
Inflation (average) - 15.1% (2007) Economist Intelligence Unit (EIU)
Foreign Exchange - US$1.400m (2007) Economist Intelligence Unit (EIU) Reserves (US$)
Total Ext. Debt - (US$) $1,438m (2007) CIA World Factbook
Budget Balance Revenues - US$1,580m
Expenditures - US$1,497m (2007) CIA World Factbook


New Zealand Trade

NZ Exports (FOB) - NZ$1.551m (2008) [vs. NZ$1.823m in 2007] (primarily machinery parts and milk)
NZ Imports (CIF) NZ$143,393 (2008) [vs. NZ$110,971 in 2007] (primarily starches (inulin))

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Overview

Mongolia is a land-locked country sandwiched between China and Russia. Agriculture and mining underpin the economy: Mongolia has vast herds of sheep, goats, cows, camels and horses, and mining is its biggest foreign exchange earner. Tourism is a growing part of the economy, but more generally the service sector is underdeveloped.

In 2006 Mongolia celebrated its 800th year of statehood and it is fiercely proud of the history of former warrior Chinggis Khan (as Genghis Khan is known in Mongolia).

The current population of approximately 2.9 million is predicted to increase to 3.1 million by 2015.

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Political Situation

Politically Mongolia has made a remarkable transformation from Soviet satellite to fully democratic state. Since the democratic revolution in 1990, democratic elections have been regularly held in Mongolia (including presidential, parliamentary and by-elections).

Parliamentary elections

On 29 June 2008 Parliamentary elections were held in Mongolia. There were widespread allegations of illegal actions and a peaceful demonstration on 1 July escalated into a riot in which five people were killed. In response, Mongolia’s President declared a four day state of emergency. On 14 July Mongolia’s Election Commission announced that the June parliamentary polls were held within the rule of law and that no fraudulent practices had taken place during the election. It concluded that the ruling Mongolian Revolutionary People’s Party (MPRP) had won a clear majority in parliament, but reduced the MPRP majority by nine seats.

The first session for the new Parliament was convened on 23 July, but ended with a boycott by opposition Democratic Party (DP). Following two months of political impasse, a coalition was formed between Mongolia’s two main political parties, the MPRP and the DP. The new parliament resumed its first session in late August, swore in legislators, and later approved Sanjaagiin Bayar as Prime Minister of the coalition government. In the new Parliament the MPRP holds a narrow majority with 44 of 76 seats, while the opposition Democratic Party hold 26. The Civil Will party (led by the former Foreign Minister Sanjaasuren Oyun) and Civil Coalition hold one seat each. The political scene looks to remain unpredictable in the lead up to the general election in May 2009. The government faces challenges associated with the global economic crisis of late 2008, and its number one goal remains to reduce poverty.

Human Rights/Civil society

A notable achievement in Mongolia’s political development was the establishment of a Human Rights Commission recognised as meeting the requirements for a free and independent body. The commission actively handles complaints and its major concern is arbitrary behaviour by state officials. The commission is supported by a UNDP/OHCHR project, which has funded Peter Hosking, a former New Zealand Human Rights Commissioner, to do capacity building work with the commission. The New Zealand Human Rights Commission has also had close cooperation and numerous visits and exchanges with its Mongolian counterpart. Both human rights commissions are members of the Asia Pacific Forum of National Human Rights Institutions (APF). The 2005 meeting was hosted in Ulaanbaatar.

There is a flourishing civil society in Mongolia (although predominantly in Ulaanbaatar) with a large NGO community and a relatively free media. Corruption, however, is a growing issue. To address this, Parliament passed an Anti-Corruption Law in 2006, and an independent Anti-Corruption Agency was established in December that year.

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Economic Situation

The collapse of the Soviet Union and the dissolution of the Trading Bloc of the Communist Economies (COMECON) left Mongolia with a debt of 10 billion rubles and Soviet investment and subsidised deliveries of raw materials ceased. Industrial output shrunk because of shortages of electricity, raw materials and spare parts. Over the past 15 years, the Mongolian economy has undergone major structural changes. The old centrally planned economic system has been abolished and measures have been taken towards privatisation, price liberalisation, banking reform, trade liberalisation, and opening up the economy.

In recent years, Mongolia has experienced strong growth, (9% for 2007), but the economic environment began deteriorating from late 2008. In November, the global economic and financial crisis claimed its first victim when the government nationalised Anod Bank, a leading commercial bank. Mongolia’s economy is based around four main industries: agriculture, mining, cashmere and tourism. High copper and gold prices continue to be drivers behind growth, with 48.6% of government budget revenue coming from the mining sector (and 26.1% from one plant - the Erdenet Copper Mine). Furthermore, most mining operations in Mongolia are at the stage of exploration rather than extraction. The current “boom” is in prices, but there is considerable growth to come in the sector in terms of volume.

Apart from mining, construction and tourism are also booming sectors, with agriculture remaining important to Mongolia (around 20% of GDP). Cashmere is a major export but is largely exported in an unprocessed form, with value added in China. Tourism is growing, but the industry is constrained by a relatively short period of fine weather. Manufacturing and services make small contributions to the economy, with a lot of uncompetitive industry closed down following economic reform in the 1990s. Trade the biggest contributor to services. International aid and remittances from Mongolians overseas remain important contributors to Mongolia’s GDP, with aid averaging 20% of GDP.

World prices for minerals and textiles are volatile and can impact greatly on Mongolia’s economic performance. In 2005 and 2006 on the back of high mining foreign direct investment and high copper and gold prices, the government recorded its first budget surpluses since 1990, but an expansionary fiscal policy is beginning to eat into that. New mining laws and taxes are watched closely by investors.

The number of people below the poverty line (defined at Tg25,000/month, or US$20) was about 40% for the past decade, but has recently dropped to around 35% and life expectancy is 67 years (CIA World Fact Book 2007). Severe winter disasters (dzud) in recent years have further highlighted the vulnerability of rural people to poverty. High unemployment (14%) is also a key factor. Poverty reduction remains both a government and an IMF/ADB priority.

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Foreign Relations

Following its adoption of a market economy and democratic political system, Mongolia has moved quickly to forge new links with the wider international community, with particular focus on the Asia Pacific region. Mongolia seeks to maintain balanced relationships with its two large neighbours, while at the same time developing new relationships with its “third neighbours”. Mongolia is a member of the Asian Development Bank (ADB), the World Trade Organization and the ASEAN Regional Forum, and it is seeking membership of APEC. It is also an observer of the Shanghai Cooperation Organisation.

Mongolia is increasingly contributing defence forces to multilateral and UN peacekeeping missions. It currently has contingents serving in Afghanistan, Iraq, and most recently troops were dispatched to Sierra Leone. Mongolia’s defence forces are receiving capacity building training and language skills training from the United States and Britain in order to enable them to more effectively contribute to such missions.

Relations with the Russian Federation, while initially cool following Mongolia's reorientation and the withdrawal of Soviet support, are improving. The relationship with China is also complex, for historical reasons and because of the existence of over 3 million ethnic Mongolians in the northern Chinese province of Inner Mongolia. China has replaced Russia as Mongolia’s largest trade partner.

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Visits

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Representation

Travel advice

The Safetravel website provides a travel advisory for travellers to Mongolia [external link].

Enquiries may be directed to Consular Division at the following numbers:  Phone:  64 4 494 8500;  Fax:  64 4 494 8506.

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Page last updated: Monday, 09 December 2013 13:00 NZDT