How Mongolia Is Handling Its Mining Bonanza – by Gordon Feller (Global Asia – December 2021)

Is Mongolia’s prosperity being built at the expense of its future stagnation? A growing number of experts believe that the country is becoming over-reliant on mining-led growth. Making matters worse, the government is only saving a measly one cent of each dollar earned from its mineral output.

To expedite mineral shipments, the government had pledged to build a separate railway by this year from the massive Tavan Tolgoi coal mine to expedite coal deliveries through the South Gobi corridor. But it failed to secure financing.

A steep rise in Mongolia’s indebtedness was happening well before the Covid-19 pandemic slammed the economy, while saving rates take a steady fall and oligopolistic ownership structures tighten their grip on key industries.

All of this has had the effect of chipping away at the country’s long-term competitiveness. What are the indicators? Consider just three from a lengthening list: a growing exodus of skilled human capital; a falling rate of female participation in the labor force; and diminishing prospects for diversified development.

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