BANGKOK (Thomson Reuters Foundation) – Mongolia should diversify its economy in the face of climate change and other stresses, as reliance on mining at the expense of its livestock industry has put people at risk of commodity price shocks and rising unemployment, an international aid group said.
Ramesh Singh, Mongolia director for Mercy Corps, said strengthening rural livestock markets and establishing centers of economic activity outside the over-stretched capital would enrich the nation’s coffers, provide work for young people, and boost the country’s resilience.
Mongolia has struggled with an economic crisis since 2016 due to government over-spending and declining revenues from its exports, which include copper and coal. “We have reached a tipping point,” said Singh, whose U.S.-based organization has worked in Mongolia since 1999.
Youth unemployment, climate change and heavy urbanization in the capital city of Ulaanbaatar are key issues that must be tackled, he added. A Mercy Corps report issued last week said the mining sector employs only 3.6 percent of Mongolia’s total workforce.
“There’s a realization among government and development partners that it was a big mistake to focus solely on a single sector,” said Singh, noting how a 17 percent growth rate in 2012 has nosedived to a projected 1.4 percent in 2017.
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