Mongolia Lending Institutions, Health Care, and Human Capital

With two very large mining projects expected to reach full production this decade, Mongolia is entering a commodity boom. History has taught us that commodity revenues offer unique opportunities for development but can also depress long-term economic prospects by increasing macroeconomic unpredictability, reducing incentives to invest in physical and human capital and undermining economic and political institutions. Social spending should be detached from resource revenues, better targeted and fully incorporated into the budget.
Mongolia's vast mineral deposits and growth in the mining-sector activities have transformed Mongolia's economy, which by tradition had been dependent on herding and agriculture. Until recently Mongolia had remained a relatively small, landlocked, low-income economy, with a population of 2.7 million. Mongolia’s development potential, however, is colossal, associated predominantly to two large mining development projects. Oyu Tolgoi is a large copper and gold deposit in the South Gobi desert, approximately 80 kilometers north of the border with China. It is estimated to hold over 35 million tons of copper and 1,275 tons of gold. Tavan Tolgoi is estimated to hold reserves of over 6 billion tons of coal. Tavan Tolgoi is also in the South Gobi, approximately 240 kilometers north of the border with China and 150 kilometers away from Oyu Tolgoi.
Mongolia has transformed itself from a socialist country to a vibrant multiparty democracy with a booming economy. Mongolia is at the dawn of a major transformation driven by the exploitation of its vast mineral resources. Mongolia was among the most aid-dependent countries in the world receiving $2.5 billion of foreign aid between 1991-2002. However, du...

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...ining operations drive the growth of industry and service sector. Government officials both at central and provincial level, donors and civil society confirmed the importance of rural development and flagged up environmental challenges from desertification, deforestation and dust storms. Human capital needs to be further developed if the economy is to be diversified. Increased industrialization, exploiting minerals and attracting inward investment will require new skills.

Works Cited

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