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the challenges facing landlocked developing countries: a case study ...

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MONGOLIA<br />

As <strong>the</strong> <strong>landlocked</strong> country with <strong>the</strong> largest area and lowest<br />

population density 32 , Mongolian trade is significantly hindered<br />

by <strong>the</strong> distances required to travel within <strong>the</strong> country. This<br />

problem is exacerbated by <strong>the</strong> lack of good infrastructure:<br />

Mongolia has only one significant highway and <strong>the</strong> state of<br />

most roads are poor.<br />

While nearly half of Mongolia’s exports go to China, an<br />

overwhelming portion of <strong>the</strong> o<strong>the</strong>r half go overseas to <strong>the</strong><br />

United States. For <strong>the</strong>se exports, transit routes through Russia<br />

(to St Petersburg, Vladivostok, Nakhoda or Vostochny) and<br />

China (to Tianjin) are used and are almost without exception<br />

by rail. Transit infrastructure levels are reasonable although a<br />

diversification of modes to facilitate competition between road<br />

and rail would be advantageous. Mongolia’s relations with<br />

Russia and China are reasonably good and improving.<br />

BASIC INFORMATION<br />

HDI Rank: 113<br />

GDP per capita<br />

2000 (PPP$): $1,783<br />

Exports per capita<br />

2000 (current USD): $265<br />

Distance to port:<br />

1,693km<br />

Transport cost ratio<br />

(1999): 0.16<br />

Neighbors:<br />

China, Russia<br />

Primary transit <strong>countries</strong>:<br />

China, Russia<br />

TRANSPORT INFRASTRUCTURE<br />

Road<br />

While Mongolia has significant road coverage on an absolute<br />

scale, <strong>the</strong> development of <strong>the</strong> road network is limited relative<br />

to <strong>the</strong> needs of <strong>the</strong> country. Roads are largely unpaved and of<br />

poor quality (Canning 1998), leading to <strong>the</strong> dual problems of<br />

long transport times and <strong>the</strong> significant damage to goods. 33 On<br />

<strong>the</strong> positive side, <strong>the</strong> government is making efforts to upgrade<br />

roads, largely through external aid. A total of $US250m in<br />

development assistance was committed to improving transport<br />

infrastructure between 1990-99 (Stone 2001). Construction of<br />

an east-west arterial road began in 2001.<br />

Although roads are not used for transit through China nor<br />

Russia, <strong>the</strong>re is potential for a road route through to Tianjin<br />

(China). Currently <strong>the</strong> main obstacle to using such a road<br />

Main trading partners (2001):<br />

Imports: Russia (35%),<br />

China (20%),<br />

Exports: China (48%),<br />

US (31%)<br />

Primary Exports:<br />

Copper, gold, cashmere<br />

Domestic Roads: poor<br />

Transit Country Roads: fair<br />

Domestic Rails:<br />

Transit Country Rails:<br />

route is due to regulatory barriers: Mongolian, Russian and Chinese trucks have not been<br />

able to operate within each o<strong>the</strong>r’s territory (United Nations General Assembly 2000). Such<br />

regulations, however, are showing signs of easing: a protocol was signed with Russia to<br />

enable <strong>the</strong> transport of passengers by road in ei<strong>the</strong>r territory without taxes or fees (UNCTAD<br />

1999a). Negotiations are currently underway to allow <strong>the</strong> right of transit for Mongolian,<br />

fair<br />

fair<br />

Transit Country Ports: good<br />

Neighboring Civil Conflict:<br />

low<br />

Relations w/ Neighbors: good<br />

32 Mongolia has a land area of 1,566,500 sq km and population density of 1.5 persons/sq km. Botswana is <strong>the</strong><br />

second most sparsely populated with 2.7 persons/km 2 (WDI 2002)<br />

33 Drivers also suffer from limited supplies of fuel (EIU 2001).<br />

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