Eastern promises: Old traditions join modern life in this resource-rich country

Bounded by Russia to the north and China to the south, Mongolia is a vast country and sparsely populated – larger than Western Europe, but with a population of barely 3m people. The country of wind-swept steppes, plains and deserts is famous for its nomadic tradition, still influential despite rapid development. However, stable and democratically-ruled Mongolia is also emerging as a key centre for mining investment, with important copper reserves and a number of major projects due to enter production soon.

GEOGRAPHY: Mongolia, covering a surface area of 1.56m sq km, is the 19th largest country in the world. The country is entirely land-locked, with land borders that stretch 8220 km. Its geography is characterised by plains, steppes and deserts – notably the Gobi desert in the south of the country – while parts of the north, far west and south-west are more mountainous. The far west hosts the country’s highest peak, the 4374-metre tall Hutyen Orgil (Khüiten Peak), which sits astride part of the western frontier where Mongolia, Russia, China and Kazakhstan come together.

The capital, Ulan Bator, has a population of approximately 950,000 people and is located slightly northeast of the centre of the country. The mountainous northern province of Khövsgöl, named after a lake with the same name, is sometimes described as the Switzerland of Mongolia and is known for its ethnically diverse population, as well as for being a stronghold of shamanism. In the south of the country, the Gobi desert, despite the images of endless sand conjured by the name, is known for its diverse scenery and landscapes, including glaciers, canyons and oases, as well as for hosting the country’s largest mineral deposits.

NATIONAL GOVERNMENT: Having ended decades of communist rule in 1990, Mongolia is governed by a mixed presidential-parliamentary system. Candidates for the presidency are nominated by the single-chamber, 76-seat parliament, known as the State Great Khural, and elected by popular vote for a maximum of two four-year terms. The president acts as head of state and chief of the armed forces and is obliged to appoint as prime minister the candidate presented to him by the parliamentary majority. The prime minister appoints a cabinet that must be approved by the State Great Khural. Parliamentary elections are also held every four years. While Mongolia has a long traditional legal system stretching back to the yasa (written code of law) of Genghis Khan, the contemporary legal system is strongly influenced by that of the Soviet Union.

LOCAL GOVERNMENT: Mongolia is administratively divided into 21 regions, known as aimag, with the capital, Ulan Bator, operating as an independent municipality. Each province elects a local khural to parliament and is sub-divided into administrative regions (sums) that also have local representative bodies.

POPULATION: The current estimated size of Mongolia’s population is 3.13m (growing at an annual rate of 1.49%), making it the 134th largest country by population. Its small population, combined with Mongolia’s vast geographical size, makes the country the least-densely populated nation in the world.

The country is fairly ethnically homogenous, with approximately 95% of the population being of Mongol origin, around 90% of whom hail from the Khalkha Mongol ethnic group, who speak the Khalkha dialect of Mongol. Other Mongol ethnic groups include the Buriat, Dorvof and Tuvad groups. However, the population has a substantial Turkic ethnic minority of around 5% of the population – most of whom are ethnic Kazakhs – who make up the majority of the population of the western-most province of Bayan-Olgiy.

RELIGION: According to 2004 figures, approximately half of the Mongolian population is Buddhist Lamaist, a sect of Tibetan Buddhism, and the religion has a major influence on the national culture. Most Buddhist temples and monasteries were destroyed under the communist regime, however, a number were left standing as examples of traditional Mongolian culture, including the famous Gandan monastery in the capital Ulan Bator. Roughly 40% of Mongolians do not practice any religion, partly of the legacy of the ban on all religious practice that was in place under the former communist regime, which ended in 1990.

There is also a Sunni Muslim minority – mostly made up of the country’s Kazakh ethnic minority – that comprises around 4% of the population. Small Shamanist and Christian communities also exist, with most Christians subscribing to Protestant denominations. The constitution and the government both provide for freedom of worship for these and other groups.

LANGUAGE: Around 90% of Mongolians speak Mongol, most of them using the Khalkha Mongol dialect, which is the official language of Mongolia and which since 1963 has been written in the Cyrillic alphabet due to the strong influence of the Soviet Union. However, the traditional Mongolian alphabet is gradually being reintroduced. Turkic languages – principally Kazakh – are also spoken, mainly in the west of the country. Russian was spoken fairly widely in the past, sustained by the large number of immigrants from the Soviet Union, however, many left following its collapse and the language does not have as wide an influence any longer.

CULTURE & HERITAGE: Nomadism (in particular nomadic herding) and Buddhism are two of the most important influences on Mongolian culture. While most Mongolians are now settled into urban areas, a significant number of city-dwellers nonetheless continue to live in gers, traditional round wood and felt tents that were specifically designed for the nomadic lifestyle.

The country’s most popular traditional sport is Mongolian wrestling, known as bukh. Alongside horseracing and archery, these athletic events are the mainstays of the famous summer sports festival of Naadam, which is also a major tourist attraction. Epic poetry also remains a major cultural tradition. Wrestlers at Naadam are honoured by bards, while the nation’s past is famously encapsulated in the epic poem “The Secret History of the Mongols”, which describes the rise of the Mongol Empire under Genghis Khan in the 13th century.

Mongolian cuisine is heavily influenced by the country’s herding tradition, and thus based largely around meat and milk products. Traditional staple dishes include a variety of mutton dumplings such as buuz (steamed dumplings) and khushuur, which are deep fried. Popular traditional drinks include milk tea and airaig, lightly alcoholic fermented mare’s milk.

CLIMATE: Given the large size of the country, the weather varies significantly. Generally, the climate is an extreme continental one, thanks to its landlocked status and distance from the sea. In Ulan Bator – one of the coldest capital cities in the world – the coldest month on average is January, where temperatures fluctuate between a daily average of -32° C and -19° C. Meanwhile, the temperature peaks in July, alternating between average daily minimums and maximums of 11° C and 22° C, respectively. However, temperatures outside of Ulan Bator and particularly in the southern desert regions are substantially higher. In the steppe and desert areas the temperature fluctuates between warm days and cool nights. July is the wettest month, with precipitation averaging roughly 76 mm in the capital.

NATURAL RESOURCES: Agriculture, and particularly herding – around which many of the country’s traditional activities and the semi-nomadic culture is centred – are important contributors to the economy. However, the scale of the activities is primarily focused at the national level. As a result, it is the mining and extracting sector that is emerging as the key driver of both exports and foreign investment.

Mongolia currently has very little to speak of in the way of significant oil or gas reserves. However, the country is an important mining and minerals centre. Many of the country’s deposits are still untapped, and a number of major new projects are due to begin production in the near future. These are expected to significantly increase Mongolia’s status as a producer of minerals. Mining and quarrying already account for close to 30% of GDP, and minerals made up around 65% of the country’s exports in 2009. Many of these went to its rapidly expanding neighbour, China.

The country has among the largest copper reserves in the world, with the Oyu Tolgoi reserve thought to be the world’s largest undeveloped copper and gold reserve yet discovered. Oyu Tolgoi also gives Mongolia the second-largest copper reserves in the world (after Chile). Canada’s Ivanhoe Mines is developing the site in partnership with the Mongolian government, which has a 34% stake in the project. Production at the mine, located in the South Gobi region, is due to begin in 2013. Another important project is the Nergui copper, gold and silver project being developed by China’s Solartech International Holdings, which is due to come online in 2012. Additionally, Mongolia is the world’s third-largest producer of fluorspar. The country’s output accounts for approximately 5.5% of global output. It is also a significant producer of coal, with output standing at 12.3m short tonnes in 2009. Mongolia is also believed to have the world’s second-largest reserves of uranium after Australia, with a major prospect scheduled to being production there in 2012. The ground there also holds significant reserves of tin, molybdendum and tungsten.

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The Report: Mongolia 2012

Banking chapter from The Report: Mongolia 2012

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