Page 64 - bne_May magazine 2023_20230503 BRICS

64 I Eurasia bne May 2023
A wedding in Chinggis Square, Ulaanbaatar. Photo: Zazaa Mongolia, cc-by-sa 4.0).
expenditure accounting for 3.7% of GDP, infant mortality is extremely high. For every 1,000 babies born, 15 do not reach their fifth birthday.Weighing up these economic issues, accountant Tuul Chimed says: “If you ask people who live in Mongolia, they will all say that they want to go abroad, live there and make money because it’s safer, and the salary is higher.”
Over 70,000 Mongolians emigrate each year. It is hoped that economic development will, however, encourage more young people to remain in the country. But the economic outlook is mixed. The economy grew by a modest 2.5% last year, while the tughrik lost around 18% of its value.
Mongolia exports raw materials,
metals and coal, with China the largest purchaser by a long shot. This year, with the world facing a sluggish economy, demand on the China horizon remains uncertain, as does Mongolia’s near-term economic growth.
Antonio Graceffo, PhD, China-MBA, is an economist and China analyst. He has spent over 20 years living in Asia, including seven years in China, two and a half in Taiwan and three in Mongolia. He conducted post-doctoral studies in international trade at the School of Economics, Shanghai University, and holds a PhD. from Shanghai University of Sport, and a China-MBA from Shanghai Jiaotong University. Antonio
is the author of seven books about Asia, with focused on the Chinese economy. For the past 10 years, he has been reporting on the Chinese economy, the US-China trade war, investment, geopolitics and defence. In recent years, he has written a diverse range of articles on Mongolian economics and society.
“When I look at the price of gasoline and daily products, it makes me realise that inflation has gone up a lot during the last few years. It’s getting harder to buy what I want with a tiny budget,” she said.
Unlike the others, Anujin has already married, a fact she attributes to the better economic climate she experienced when she was younger. “When I got married seven years ago, it was obviously difficult to build our lives together. On the other hand, the inflation rate was low, and
our monthly salary was enough to keep life stable. In contrast, taxes and higher inflation now make me realise that
it’s getting harder for us to pay all the expenses every month.”
Mongolia has free education and free healthcare, but Anujin complains that quality is lacking. “Every Mongolian has a right to use government services if we pay our taxes. The main problem is that the government doesn’t provide those public schools and hospitals with good equipment and management in return for the high tax we pay.”
Anujin has two children, as is typical of an urban family in Mongolia. She says she’d consider having more children, but has no plans to as things stand. “It’s expensive to raise kids. There are many parents who let their children go to public school because it’s free. I’m not saying that every public school is bad compared to private schools, but there’s a huge difference,” she determines.
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About 39% of children in Ulaanbaatar attend private schools. And those families who can use private hospitals. Education and healthcare are clearly two substantial additional expenses that working families must cope with.
With a Mongolian working population
of only 1,158,245 and an average income tax rate of 10% and low salaries not set to pick up any time soon amid global economic headwinds, government tax revenues are minimal, making it difficult to provide social services for everyone. Overall, 27.8% of Mongolians live below the poverty line, while in the countryside the percentage is closer to 38%. Roughly half of the population is receiving some form of government assistance, such as food stamps or other payments.
Approximately 85% of all children qualify for Mongolia's Child Money Programme. Prior to covid, the payment was 20,000 tughrik ($5.70) per child, per month. During the pandemic, it was raised to 100,000 tughrik ($28.50) and it remains at this level. Despite government health
“When I look at the price of gasoline and daily products, it makes me realise that inflation has gone up a lot during the last few years. It’s getting harder to buy what I want with
a tiny budget”