A mining boom helps to modernize Mongolia

Andrew McGregor
Author Andrew McGregor

May 16, 2018 / Economics

Mongolia is undergoing an economic boom thanks to mining, and there's

an urgent need for housing development in the capital, Ulaanbaatar. 

 

Ulaanbaatar is a paradox to me. It’s a city of fantastic wealth, clear opportunity and heartbreaking poverty – a city flanked by rugged mountains where half the population live in tents or “gers” and have no access to basic sanitation.

A city where the Louis Vuitton store downtown sells more per square meter than most other LV stores worldwide. It’s the only sizeable city in the world’s least densely populated country, and wears the crown for being the coldest capital city in the world. People here are tough and have a seemingly endless capacity for living in the moment and looking forward to the future. It is a city choked by the worst pollution in the world during the winter months, when the folks living in gers burn coal to stay warm.

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It’s a mix of crumbling soviet era buildings, shiny glass-clad office towers, luxury apartment buildings and traffic jams of Range Rovers, Land Cruisers and Lexus SUVs across town. It’s a city designed to be half as big as it actually is – one that has outgrown the infrastructure on which it is built. The four power plants that supply electricity and heating to the city are old and operating over-capacity.

The road network is in need of repair, footpaths, traffic lights and fewer cars. Public transport is inadequate and the quality of a lot of construction here is the same. It’s a city with a plan. The recently created 2020 master plan outlines the development vision for the future.

 

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The two primary goals are to improving living conditions in the ger districts, and to create a “new city centre” along the airport road corridor. The recent construction of a six lane, world-class highway linking the airport with downtown has kick-started this development. Families and businesses are already moving to the new area, and a number of retail and residential projects are under construction along this corridor to support the shift.

 

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The rapid pace of change over the last 12 months has really been astonishing. As development continues, there should be reduced traffic and pollution levels in the existing CBD as a result. The construction of low income housing on the fringes of the city will also reduce the pollution levels in winter, improve sanitation conditions for residents and have softer social benefits in the form of better health and lower crime rates.

 

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Upgrading living conditions for the poorest residents of the city is a social and economic priority for the government and it’s great to see this type of development take center stage.

The plan is ambitious but achievable, and there will be plenty of ways to participate and benefit from the growth of this fascinating country in the coming years.

 

READ MORE: MONGOLIA 2018 Q1 UPDATE