e, and attempted to restructure the banking system
and the energy sector. Major domestic privatization programs were
undertaken, as well as the fostering of foreign investment through
international tender of the oil distribution company, a leading
cashmere company, and banks. Reform was held back by the
ex-Communist MPRP opposition and by the political instability
brought about through four successive governments under the DUC.
Economic growth picked up in 1997-99 after stalling in 1996 due to a
series of natural disasters and declines in world prices of copper
and cashmere. In August and September 1999, the economy suffered
from a temporary Russian ban on exports of oil and oil products, and
Mongolia remains vulnerable in this sector. Mongolia joined the
World Trade Organization (WTrO) in 1997. The international donor
community pledged over $300 million per year at the Consultative
Group Meeting, held in Ulaanbaatar in June 1999. The MPRP
government, elected in July 2000, was anxious to improve the
investment climate; it also had to deal with a heavy burden of
external debt. Falling prices for Mongolia's mainly primary sector
exports, widespread opposition to privatization, and adverse effects
of weather on agriculture in early 2000 and 2001 restrained real GDP
growth. Despite drought problems in 2002, GDP rose 4.0%, followed by
a solid 5.0% increase in 2003. The first applications under the land
privatization law have been marked by a number of disputes over
particular sites. Russia claims Mongolia owes it $11 billion from
the Soviet period; any settlement could substantially increase
Mongolia's foreign debt burden.

GDP:
purchasing power parity - $4.882 billion (2003 est.)

GDP - real growth rate:
5% (2003 est.)

GDP - per capita:
purchasing power parity - $1,800 (2003 est.)

GDP - composition by sector:
agriculture: 20.6%
industry: 21.4%
services: 58% (2002 est.)

Population below poverty line:
33% (2003 est.)

Household income or consumption by percentage share:
lowest 10%: 2.1%
highest 10%: 37% (1995)

Distribution of family income - Gini index:
44 (1998)

Inflation rate (consumer prices):
1.5% (2002 est.)

Labor force:
1.4 million (2001)

Labor force - by occupation:
herding/agriculture 46%, manufacturing 6%, trade 10.3%, public
sector 4.7%, other/unemployed 33% (2001)

Unemployment rate:
4.6% (2001)

Budget