Economy Mongolian People's Republic

on eve of 1921 revolution, mongolia had underdeveloped, stagnant economy based on nomadic animal husbandry. farming , industry nonexistent; transportation , communications primitive; banking, services, , trade exclusively in hands of chinese or other foreigners. of people illiterate nomadic herders, , large part of male labour force lived in monasteries, contributing little economy. property in form of livestock owned aristocrats , monasteries; ownership of remaining sectors of economy dominated chinese or other foreigners. mongolia s new rulers faced daunting task in building modern, socialist economy.

mongolia s economic development under communist control can divided 3 periods: 1921–1939; 1940–1960; , 1961 present. during first period, mongolian government called stage of general democratic transformation, economy remained agrarian , underdeveloped. after abortive attempt collectivize herders, livestock remained in private hands. state began develop industry based on processing of animal husbandry products , crop raising on state farms. transportation, communications, domestic , foreign trade, , banking , finance nationalized soviet assistance; placed under control of mongolian state , cooperative organizations or mongolian-soviet joint-stock companies. ulaanbaatar became nation s industrial center.

during second period, called construction of foundations of socialism, agriculture collectivized, , industry diversified mining, timber processing, , consumer goods production. central planning of economy began in 1931 abortive five-year plan , annual plans in 1941; five-year plans began anew first five-year plan (1948–52). soviet, , after 1949 chinese, aid increased, allowing construction of trans-mongolian railway – ulaanbaatar railway – , various industrial projects. although industrial development still concentrated in ulaanbaatar, economic decentralization began completion of ulaanbaatar railroad , establishment of food processing plants in aimag centers.

the third stage, government called completion of construction of material , technical basis of socialism, saw further industrialization , agricultural growth, aided largely mongolia s joining council mutual economic assistance (comecon) in 1962. after sino-soviet split, chinese aid ceased, continued soviet , east european financial , technical assistance in forms of credits, advisers, , joint ventures enabled mongolia modernize , diversify industry, particularly in mining. new industrial centers built in baganuur, choibalsan, darkhan, , erdenet, , industrial output rose significantly. although animal husbandry stagnant, crop production increased dramatically development of virgin lands state farms. foreign trade comecon nations grew substantially. transportation , communications systems improved, linking population , industrial centers , extending more remote rural areas. in late 1980s, mongolia had developed agricultural-industrial economy, inefficiencies of centrally planned , managed economy , example of perestroika in soviet union led mongolian leaders undertake reform program develop economy further.