Country/Sector Context Mongolia, a country with vast surface area of about 1.5 million km2, has the lowest population density in the world (3 times the size of France, but a population which is 24 times smaller) and per capita income of about $430. The transition from a centrally planned economy to a market economy since the early 90s has taken a very heavy toll on the country and only began to show signs of turnaround in the early 2000s. Despite high economic growth rates over the last couple of years (10.6% in 2004, highest in East Asia), poverty and inequality continue to be serious problems in both rural and urban areas. Migration issues remain at the core of the challenges facing Mongolia’s rural development. After the collapse of the collectives and other state owned enterprises in the 90s, most of the migration was from the urban to rural areas as household sought livelihoods through extensive livestock production. Due to various reasons, including the heavy toll of the dzuds of ‘99 through early ’00s, the trend has reversed.The share of the population in rural areas decreased from 50 to 45 percent as migration to urban areas increased during the latter part of the transition and in 2004 it was reported that 34% of the population was officially registered in the capital, Ulaanbaatar, compared to only 15% in 1990. The trend of migration from rural to urban areas continues, however, recent studies shows that the migration is less from the more remote rural areas, but rather from those regions closer to Ulaanbaatar. Earlier surveys found that the reasons for migration were primarily related to the desire for improved access to better social services, including health and education. The most recent surveys show livelihood improvement is now the most important motivation, and this has been confirmed given that the areas with the highest population inflows are those which have recorded high economic growth/employment opportunities. The institutional and policy reforms that have been put in place are causing rapid change in social, economic and environmental dynamics in rural areas. Rural development is essential for Mongolia to achieve sustained economic growth and poverty reduction. According to the 2002/2003 HIES/LSMS, the poverty rate in rural areas was 43%, while in urban areas it was 30%. Livestock continues to provide rural households with an important source of income, jobs and food security, and a means for investing and storing their wealth. Over the past several years, the agriculture sector has witnessed a sharp decline in its contribution to the overall economy. In 1940, the livestock sector alone represented about 80% of the national income and 90% of the labor force. From 1993 to 2003, the share of agriculture GDP dropped from 40% to 28%, while the service sector increased from 36% to 57%. Presently, it is estimated that the agriculture sector accounts for around 20% of GDP, and provides 43% of employment (7 out of the 10 jobs are from livestock activities). These changes have had profound impact on the livelihoods of rural residents throughout Mongolia.  Read the full report (pdf format, 66.7KB)
See also
Rural Development Strategy 2002 |
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