Mongolia
Long a province of China, Mongolia won its independence in 1921 with Soviet backing. A communist regime was installed in 1924. During the early 1990s, the ex-communist Mongolian People's Revolutionary Party (MPRP) gradually yielded its monopoly on power. In 1996, the Democratic Union Coalition (DUC) defeated the MPRP in a national election and has attempted to establish a number of reforms to modernize the economy. However, many former communists retain key posts and implementation has been difficult.
There are currently no known threats to visitors to or expatriate in Mongolia, however dire economic times have lead to an increase in crime in which foreigners perceived as wealthy are targeted.
A developing nation, Mongolia made the change to a capitalistic market economy when the last of the Soviet troops pulled out in 1990. Life in sparsely populated Mongolia has become more urbanized. Nearly half of the people live in the capital, Ulaan Baatar, and in other provincial centers. Semi-nomadic life still predominates in the countryside, but settled agricultural communities are becoming more common. Autumn droughts and unusually cold and snowy winters in 2000-01 have decimated Mongolia's 33 million livestock, destroying the livelihood of thousands of families. In late 2001 the IMF approves nearly $40 million in low-interest loans over next three years to help tackle poverty and boost economic growth.
President Natsagiyn Bagabandi was one of the leaders of the ruling Mongolian People's Revolutionary Party (MPRP) in 1992 when he was elected speaker of the Mongolian Great Hural (parliament) for four years. Appointed chairman of the MPRP in February 1997, he won the presidential election in May 1997 and was re-elected in 2001. Although constitutionally Bagabandi represents the whole nation, he has not concealed his partiality for the MPRP. His controversial interpretations of the constitution have disrupted the appointment of several prime ministers. However, the Great Hural can overrule his vetoes.
Between 1990 and 1993, Mongolia suffered triple-digit inflation, rising unemployment, shortages of basic goods and food rationing. During that period, economic output contracted by one-third. As market reforms and private enterprise took hold, economic growth began again in 1994-95. Unfortunately, since this growth was fueled in part by over-allocation of bank credit, especially to the remaining state-owned enterprises, economic growth was accompanied by a severe weakening of the banking sector. GDP grew by about 6% in 1995, thanks largely to a boom in copper prices. Economic growth stalled in 1996 due to unusually large and widespread forest and steppe fires. These caused damage estimated at more than $2 billion and scared away much of the crucial tourist trade at the height of the brief summer season. At the same time, world prices of two of Mongolia's major exports--cashmere and copper--fell. When the newly elected Democratic Union took office in July 1996, it faced a widening budget shortfall, worsening balance of payments problems, and a banking system in crisis. It undertook almost immediately an aggressive program of economic "shock treatment" designed to eliminate the last vestiges of the centrally planned economy, which included energy price liberalization, privatization of housing, and elimination of virtually all import tariffs. Mongolia joined the World Trade Organization in January 1997.
Severe fuel shortages and problems with central heating and electrical systems may cause seriously reduced heating levels and power outages in Ulaan Baatar and the cities of Darham and Erdenet during the winter months of November through April. Smaller towns in the countryside may have no heat or electricity at all during these months.
