Twenty-first-century Mongolia is a land of conspicuous inequality and striking concentrations of wealth. It’s multiparty parliamentary political system is well entrenched, but democracy has been unable to do much to reduce poverty, which remains widespread, and the prospects of the economy creating large numbers of secure, well-paid jobs still seems remote.

In 1991 President Ochirbat predicted that Mongolia would rapidly develop another Asian Tiger economy (Ochirbat 1996: 235-236), but the reality proved to be very different. In retrospect, the privatization policies of the 1990s created more long-term damage than expected. The MPR had exported a range of products, including textiles, leather garments and other livestock-related products. As Reinert (2004: 158) notes, ‘[d]uring the 50 years preceding the reforms of 1991, Mongolia slowly but successfully built a diversified industrial sector […] [this] was virtually annihilated over a period of only four years, from 1991 to 1995, not to recover again. In a majority of industrial sectors, production is down by more than 90 per cent.’

Nevertheless, Mongolia’s enormous mineral wealth remained largely intact below the ground. A number of mining ventures had been established in the state socialist period, including the major Soviet-Mongolian Erdenet copper and molybdenum mine. Minerals could still be sold as raw materials on the international market, and with few other industries surviving the transition the mining sector came to dominate the economy. The 1990s liberal reform policies also attracted foreign companies to buy up mining licences and invest in copper-, gold- and coal-mining operations, most notably the Oyu Tolgoi copper and gold mine acquired by the multinational Rio Tinto Group. Having become heavily dependent on the export of raw materials, primarily copper, coal and gold, Mongolia has experienced two cycles of boom and bust since 2000, reflecting the rise and fall of global commodity prices.

The economy registered some spells of positive growth in the opening decades of the twenty-first century, stimulated by mining booms. This generated bouts of rapid property development and a soaring real-estate market in Ulaanbaatar, but did little to reduce long-term poverty. About a third of the population were living below the poverty line in the late 1990s (United Nations Systems in Mongolia 1999: 5), and although the rate has fluctuated year on year there has been little sign of significant improvement.