Mongolia`s Foreign Economic Relations

Abstract

For decades, trade and investment with Mongolia was monopolized by the Soviet Union and the Communist countries of Eastern Europe. When these countries launched their economic reforms at the end of the 1980s, Ulan Bator was forced to follow suit and open its doors to the outside world. Since then, Mongolia has actively sought new sources of loans and investment, while maintaining close economic ties with its old partners. In particular, Mongolia has developed its economic relations with the PRC. To facilitate the opening-up of its economy, Mongolia has tried to speed up its economic reforms, to introduce new laws, and to switch from barter trade to hard currency transactions. In the meantime, it has also attempted to change the nature of its exports by cutting exports of raw materials. However, there remain two major obstacles to Mongolia`s entry into the international market. a grave shortage of foreign exchange and an inadequate transportation system.