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МОНГОЛЫН ХҮН АМЫН СЭТГҮҮЛ Дугаар (367) 20, 2011
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of Mongolia in the process of adapting to
a double-digit economic growth and the
resulting population influx into the capital
city in the past decade. The government and
international development organizations have
worked extensively, for the past six years, to
improve the living conditions of the population
by initiating several programs for developing
the local housing market and by supporting
private sector efforts through loans.
Mongolia’s current growth has been
unprecedented in its history. Its market
economy is extremely vulnerable to volatility
in global commodity prices, given the
concentration of growth in mining and
herding; the collapse in copper prices and
the global financial crisis has deeply affected
the country’s economy in 2009, such that the
International Monetary Fund had to step in
to provide a $224-million loan (IHS Global
Insight, 2011). Today, however, Mongolia
is on its way to a strong recovery. Its current
economic growth is largely attributed to the
construction of the Oyu Tolgoi copper and
gold mine, the world’s largest underdeveloped
copper-gold project launched as a result of a
joint investment by the Mongolian government
and a British, Australian, and Canadian mining
consortium, and to the herding of livestock,
which represents the second largest share of
domestic output, employing 30 per cent of the
labor force (IHS Global Insight, 2011).
Mongolia continues to receive substantial
help from donor aid that is essential in the
process of maintaining economic stability,
especially as the country is often subject to
severe weather conditions, which could create
economic risks at any given time (IHS Global
Insight, 2011). Its population is small, at 2.76
million, projected to be 2.85 in 2015 (IHS
Global Insight, 2011) and its nominal GDP
per capita is at $2,546 in 2011, making it one
of the world’s poorest countries – ranked 166,
just ahead of the West Bank; however, nominal
GDP is projected to reach $5,045 in 2015
(Gluckman 2011), placing it comfortably at the
level of a middle-income country. Mongolia’s
stock exchange, still the world's smallest,
rose 125 per cent in 2011, and conservative
forecasts (by the International Monetary Fund)
are for double-digit GDP growth rates, with
less conservative ones predicting an overall
economic output that would quadruple by 2013
(Gluckman 2011).
The Mongolian government is keeping a
close watch on the country’s rapid economic
development, attempting to control inflation
and to address negative growth outcomes.
For example, the government has recently
approved the Fiscal Responsibility Law, aimed
to restrict rapid spending growth from mining
revenues and to prevent excessive borrowing
against future wealth (IHS Global Insight,
2011). It is also ensuring that the influx of new
businesses and population to support these
businesses are appropriately supplied with the
necessary housing.
A New Era of Consumer Spending
In the early 1990s, Mongolia had just
emerged from seven decades under the Soviet
umbrella. Today, its capital city, Ulaanbaatar,
looks very much like a Chinese boomtown,
with exploding property prices, huge capital
inflows, concerns about corruption, widening
gaps in income disparity, and expensive
automobiles (Gluckman 2011). Popular and
expensive Western brands are invading the
Mongolian landscape, many wooing the luxury
consumer. For example, Louis Vuitton opened
in the posh Central Tower in the proximity
of Sukhbaatar Square; there, a glass cabinet
holds a horse saddle encrusted in gems, and
a crocodile purse priced at $20,000 is within
proximity of watches that are well over
$10,000 (Gluckman 2011). This is very much
in contrast with Mongolia’s standard of living,
which is among the world’s lowest – at least
for now.
The Mongolian Housing Market
Since the 1990s, when Mongolia
transitioned from a planned economy to
a market economy, the construction of
new buildings has increased sharply and
3,725 families moved to new apartments in
Ulaanbaatar (Battulga 2009). More and more
individuals are moving to the city in search of
better education and job prospects, and more
and more need housing.