Mongolia Per Capita GDP to Hit $5,000 by 2012: Govt Minister

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In last few years as China grew, Mongolia’s exports also grew as it exported its coal and metals to China. The Mongolian exports have gone up from 48% in 2004 to 73% in 2009 to China. Copper and Coal make up the majority (almost 60%) of the current exports from Mongolia and the other commodities being exported are Zinc, gold, iron ore & Molybdenum. There is no doubt that these commodities will always be in demand and even if there is recession still countries like China, India, Russia will be growing for next few years and the demand for these commodities will be there from these growing economies. So in that sense the growth of Mongolia is inevitable and these are some of the simple reasons why the high net worth individuals, fund managers, financial institutions, investors are all flocking Mongolia to tap in the opportunities which look lucrative.

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The only foreseen big risk for the Mongolian economy seems to be the Dutch Disease which can affect the economy adversely in the long term. (In simple terms Dutch Disease means the over exploitation or over dependence of an economy on natural resources or large capital inflows which ruins the other sectors of economy and causes currency to appreciate drastically thus causing the country to loose its competitive advantage over others).

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The overall infrastructure in Mongolia is outdated and not efficient enough to drive the manufacturing boom and situated next to China it cannot do so. In looking onto these factors it seems difficult and challenging for the government to take steps in the right direction to avoid the disease affecting the economy.

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