Mongolia is actively pursuing economic diversification and sustainable development to reduce its reliance on the mining sector and build a more resilient and inclusive economy. The country has identified the dairy sector as a high-potential area for economic diversification and sustainable growth.
Mongolia’s economic reliance on mining leaves it exposed to external commodity shocks. Recurring booms and busts highlight the need to develop other industries. Priorities include boosting manufacturing, food production, tourism, infrastructure and environmental services.
Expanding the private sector in Mongolia beyond mining is crucial for job creation and resilient growth. This requires improving access to affordable financing and skills training to help SMEs scale in underdeveloped sectors. Easing restrictions on FDI can also assist technology transfer.
Sustainably managing water scarcity and transitioning towards renewable energy are also pivotal to balance environmental protection and development needs. Mongolia has high solar, wind and hydro resources that can limit over-reliance on coal.
While the extractives industry will remain dominant, diversifying the economy is vital to escape the “resource curse”. Using mining revenues to systematically build human capital and competitive new industries can support more inclusive, stable national development in Mongolia.
However— challenges such as low productivity, poor milk quality, logistical issues, and inadequate investment have been identified across the dairy supply chain. To address these challenges – the government and various organizations have proposed initiatives to enhance the dairy sector and capitalize on its potential.
Mongolia is working to promote economic diversification through reforms aimed at strengthening labor markets, enhancing governance, and removing trade constraints. The country’s efforts are focused on fostering sustainable economic development, increasing inclusion and advancing a diversified and inclusive economy.
By diversifying its economic base and promoting sustainable growth within all sectors— Mongolia aims to reduce its vulnerability to external shocks and create new opportunities for its people—especially women and youth.
