Economy

Mongolia's economy is centred on agriculture and mining. Mongolia has rich mineral resources, and copper, coal, molybdenum, tin, tungsten, and gold account for a large part of industrial production.

There are currently over 30,000 independent businesses in Mongolia, chiefly centred around the capital city. The majority of the population outside urban areas participate in subsistence herding; livestock typically consists of sheep, goats, cattle, horses and Bactrian camels. Agricultural crops include wheat, barley, vegetables and other forage crops.

GDP per capita in 2006 was $2,000. Although GDP has risen steadily since 2002 at the rate of 7.5% in an official 2006 estimate, the state is still working to overcome a sizable trade deficit. A massive ($11 billion) foreign debt to Russia was settled by the Mongolian government in 2004 with a $250 million payment. Despite growth, the proportion of the population below the poverty line is estimated to be 36.1% in 2004, and both the unemployment rate and inflation rate are relatively high at 3.3% and 9.5%, respectively .

Mongolia's largest trading partner is China. As of 2005, 48.1% of Mongolia's exports went to China, and China supplied 27.4% of Mongolia's imports. Russia is an important import partner, providing 34.5% of Mongolia's imports.

Industrial Sector

Industry currently accounts for 27.9% of GDP (2005), approximately equal to the weight of the agriculture sector (21.7%). These industries include construction materials, mining (coal, copper, molybdenum, fluorspar, tin, tungsten and gold), oil, food and beverages, processing of animal products, and cashmere and natural fibre manufacturing. The industrial production growth rate is estimated to be 3% in 2006. Mining is continuing to rise as a major industry of Mongolia.

Science and Technology

Mongolia has increasingly started to develop its technology industry since the democratic revolution of the early 1990s, and many new technology companies have been founded. Also, some technology companies in nearby countries, such as South Korea and the People's Republic of China, have started to open offices in Mongolia.

Service Sector

After the democratic revolution of the early 1990s, Mongolian domestic production has picked up providing basic food production to its residents through increasing competition among companies. In 2005, the service sector accounted for 50.4% of the GDP, with 28.7% of the labour force involved.