Mongolia takes a big steppe forward
At the first hint of crisis, Mongolia usually reaches out to the IMF for financial help. Not this time. Ulaanbaatar reacted swiftly to the Covid pandemic. It is set to emerge from a tough time with its reputation and its finances enhanced.
The coronavirus pandemic threw up some unexpected winners and unlikely survivors. Billionaires grew considerably richer, biotech companies were in sudden demand and even China, the birthplace of Covid-19, suffered far less economic impact than the rest of Asia.
And then there is Mongolia. The large landlocked state, historically reliant on China for trade, but culturally more aligned with Russia and Europe, managed to pull through 2020 thanks to the swift and decisive action of officials in its capital Ulaanbaatar and some help from the multilaterals.
Yes, exports fell more than 40% and economic output dropped 9.7% year on year in the first six months, as demand for Mongolia’s commodities – chiefly copper and coking coal – slid, but the economy rebounded sharply in the second half of 2020.
On the last day of the year, the Bank of Mongolia’s chief economist, Gan-Ochir Doojav, forecast GDP would contract 5.4% on an annualized basis in 2020, before rebounding.
The IMF predicts Mongolia’s economy will expand 6% in 2021 and 4.5% in 2022.
By some measures, the country finished the year in relatively good financial health, unusual even without a global pandemic.