Author: Julian Dierkes, UBC
It has been a momentous year both economically and politically for Mongolia. But not in a good way. Just five years ago Mongolia was flying high. It was the world’s fastest growing economy with a wealth of resources to fuel further development, a solidly institutionalised democracy and a young population with a high standard of at least basic education. It seemed like the eternal blue sky was the limit.
Now, revenues derived from mineral wealth have receded into the distant future due to crushing public debt brought about by the previous government’s populist spending, which leaves the new government with little room to make any decisions.
The deterioration of Mongolia’s economic outlook is partly a global phenomenon and partly home grown. Commodity prices have declined and remained low over the past few years. This decline is linked to the slowing Chinese economy — lower commodity prices have had a heavy…