You may have read in the news recently that Mongolia is on the cusp of a significant economic boom, driven by the exploitation of its natural resources. In fact, it is already starting. But economic growth and economic development are not the same thing. And the growth that is happening is not bringing economic transformation. Last year, the Mongolian economy grew by a massive 17.8%, and foreign direct investment (FDI) grew by 150%. These trends are set to continue. And the number of cars - a good indicator of apparent wealth - filling the city's roads, is rising fast. Yet inflation went up by 10.2%*, unemployment by 50%, and over 49.7% of the rural population people remain below the state poverty line, measured at $1.25 per day (World Bank, 2009).
As well, the population drift to Ulaanbaatar continues, with all the social and economic dislocation that entails, including dislocation from the nomadic pastoral economy that has sustained Mongolia since time out of mind. Some of this dislocation is caused directly by the mines themselves, through the loss of grazing land. And some is caused by the financial pressures on a way of life that is extremely vulnerable to the rising costs inherent in a rapidly-growing economy.
Corruption remains rampant.
This is the situation that faces many in Mongolia today. There are grounds for concern, therefore, that the current economic growth will not be matched by economic development. For these reasons among others, the need for Seedtime to give families and communities a genuine uplift in life is likely to continue long into the future.
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For more detailed analysis of the socio-economic challenges facing Mongolia today, check out the following blog entry by Jargalsaikhan, one of Mongolia's leading economists.
*probably a conservative estimate