The Board Journal, an international digital business magazine based in Frankfurt, Germany, published an article on Mongolia's developing economy on February 13, 2025.

“In the middle of East Asia, a country is striving for a strategic position in the global economy: Mongolia has rich mineral resources such as rare earths, which are important for the production of quantum chips. At the same time, the government is pushing ahead with major infrastructure projects in terms of renewable energies and transport, and is focusing on a “digital-first strategy”, export of high-quality consumer goods and tourism. This results in interesting business approaches for entrepreneurs and executives in the “Wolf Economy”.

In the endless steppe of the Gobi Desert, four motorcyclists race along a track, dragging a long cloud of dust behind them. Passing steep rock faces of the Gobi Gurvansaikhan National Park, they reach Khongoryn Els, where huge sand dunes meet the Altai Mountains with the 4,000-meter-high Altai peak. The group’s destination is the “Ger Camp” – a small tent city. In the round, white-grey, house-high and fully equipped tents, the drivers find shelter for the night.

Experiential tourism generates visitor growth

“Experiencing Mongolia’s nature and traveling individually has attracted many international tourists over the past twenty years,” says Ganhuyag Chuluun Hutagt and shows a promotional video with impressive drone footage. The entrepreneur and former Vice-Minister of Finance points to a strong growth in visitors. In 2023, 593,000 tourists came to Mongolia. Between 2000 and 2019, the number of international visitors increased 13-fold. The fact that visa-free entry can be made from 61 countries has also contributed to this.

Cashmere and vodka as export hits

In addition to adventure tourism, Mongolia focuses on high-quality consumer goods. About 50% of the world’s cashmere wool is produced in the landlocked country and distributed worldwide. “Mongolia is also known globally for premium vodka of the Chinggis Khan brand,” says Gan, raising his glass. The basis for this is strong agriculture, which has a strong potential for international manufacturers of agricultural machinery and modern agricultural technologies.

Mineral resources are the backbone of the economy

The backbone of the Mongolian economy, however, is mining, which contributes around a quarter of the gross domestic product. Coal and copper (top 5 export country) are mined in particular, as well as zinc, iron, uranium, tungsten or fluorspar (top 4 export country). Gold production increased 26-fold within 20 years to 2022. “In addition, we can offer a strategically interesting alternative to China with rare earths such as cobalt or terbium,” Gan emphasizes. Because only a fraction of Mongolia’s territory has been explored so far, specialized companies find considerable business potential in this area.

Renewable energies and transport expanded

In order to become less dependent on energy and logistics from Russia, the Mongolian government is pushing ahead with major infrastructure projects. “We have about 300 days of sunshine per year. Mongolia therefore offers enormous opportunities for solar and wind power companies, especially for solar energy,” says Gan, pointing out that the total potential of renewable energies is estimated at 3,300 gigawatts. By 2030, the share of electricity from solar and wind is to be one third. In addition, the government wants to expand regional connections in the 1.5 million square kilometre country (3 times the size of France) through new roads and railway lines. This offers interesting starting points for construction companies from all over the world.

Digital transformation and young population

In addition, the Mongolian government is pushing ahead with the country’s digital transformation. More than 1,000 administrative services are to be bundled on a digital platform for citizens and companies. At the same time, work is being done to connect rural regions with fast internet through satellite networks such as Starlink. Together with cooperation partners from all over the world (including Google), the digital skills of the population and the economy are to be expanded.

For international companies investing in Mongolia, the population of around 3.5 million people, including more than 1.7 million people in the capital Ulaanbaatar alone, offers attractive potential: 2.1 million inhabitants are under 35 years of age, of which 1.26 million are under the age of 18 – interesting with regard to consumers and employees.

Returnees awaken the wolf economy

In light of the dynamic economic growth, Ganhuyag Chuluun Hutagt described Mongolia already years ago as the “wolf economy“. This term was later spread by the Russian investment bank Renaissance Capital, which referred to Mongolia as the “new Asian tiger” or “Mongolian wolf”. Author Johan Nylander has also taken up this term for his book “The Wolf Economy Awakens”, published in 2023, in which he describes the developments of the democratic system and economic prospects for Mongolia. He reports on innovators and entrepreneurs who have returned after years abroad, importing new impulses – and thus awaken Mongolia’s wolf economy.

Some key facts:

· 3.5 million people overall population

· 50% growth for number of employment (2000-2023)

· B+ / B+ / B2 rating (2023)

· Capital: Ulaanbaatar

· 6.9% GDP growth (2015-2023)

· 4.9% GDP per capita growth (2015-2023)

· 11.3% FDI to GDP ration (2023)

· 46.8% Debt to GPD ratio (2023)

· 6.7% inflation rate (Q3 2024)

· 6.1% unemployment rate (Q3 2024)

· Foreign Direct Investment: 6.5bn USD (2022/23)

· China biggest trade partner: 14.2bn USD (Q3 2024), i.e. 69.6% of Mongolia’s total trade

· Switzerland second-largest trading partner

· Import tariff: 5-20%

· NewCo can be established within 24 hours”

//www.boardjournal.net/2025/02/13/the-wolf-economy-awakens/