Mongolia’s landscape is characterized by a sparse population, though one that is becoming increasingly urbanized. Now nearly half of its people live in urban centres even as the other leads a predominantly semi-nomadic life in the countryside. Permanent farming settlements are also on the rise.
In the early 1960s, Mongolia sought a neutral position amidst increasing tensions between its neighbours China and the Soviet Union, but in 1966 it signed an agreement with the latter that allowed the presence of Soviet ground forces on its territory. Relations between Mongolia and China subsequently deteriorated and in 1983, Mongolia began an initiative to send its 7,000 ethnic Chinese residents, many of whom had lived there since the 1950s, back to China.
Benefits from its diplomacy with the Soviet Union came to an abrupt end in 1990-91. Soviet assistance to Mongolia–which was about one-third of the entire GDP–was stopped with the dissolution of the former USSR. Mongolia entered a serious depression until some economic stability returned with its entry into the free-market economy and the implementation of wide-ranging privatization initiatives in the late 2000s.
Mongolia’s geographical remoteness and natural landscape has helped to boost its tourism sector. However, as a result of rapid urbanization, the country’s deteriorating environment has become of significant concern. Deforestation, soil erosion, overgrazing and air pollution in urban areas are some pertinent issues, as well as the issue of illegal mercury use by gold miners leading to a possible poisoning epidemic.
The global financial crisis has stalled overall growth, particularly in foreign investment; Mongolia’s economy continues to be heavily influenced by its neighbours, especially China and Russia. Poverty continues to be a problem for the country with over 35 per cent of its population estimated to be living under the poverty line.
Mongolia joined the World Trade Organization in 1997 and continues efforts to increase its participation and integration into regional organizations. Mongolia became a participant in the ASEAN Regional Forum (ARF) in July 1998 and a member of the Pacific Economic Cooperation Council in April 2000.