The army over the years has had a generally positive impact on the national economy. Although the work-force shortages and military expenses of World War II imposed austerity on personal consumption and retarded social development and the economy's civilian sector, many soldiers acquired valuable technical skills. In 1934 the Choybalsan industrial combine with 1,500 workers was established to produce cloth, clothing, saddles, harnesses, fur coats, and footwear for the army. By 1939 its production almost completely supplied the army with clothing and individual equipment. Beginning in the early 1950s, wartime facilities turned to producing items both for the civilian sector and for export (see Light Industry , ch. 3).

Transportation was another industry intended initially as much for military as for civilian use. In 1929 the Soviet Union aided in the establishment of Mongoltrans (Mongolian Transportation), a transportation company with approximately 100 trucks and buses as well as a repair shop. Mongoltrans was a paramilitary organization from the beginning; its personnel received military training and transport was diverted to military tasks on call. Air transport was established, in 1925, also with Soviet assistance. In 1989 it was operated as part of the air force both for military and for civilian use (see Civil Aviation , ch. 3).

The Military Construction Administration, developed out of the Darhan Military Construction Project in the late 1950s, continued in the late 1980s as a paramilitary organization under the Mongolian army. Between 1981 and 1984, military construction troops helped to establish the new city of Erdenet; they built more than 1,000 installations and enterprises--including state farms, a shoe factory in Ulaanbaatar, and an international camp for young pioneers--for the civilian economy.

Soviet-made BMP-1 mechanized infantry combat vehicles, from a train window
Courtesy Allen H. Kassof

Data as of June 1989

NOTE: The information regarding Mongolia on this page is re-published from The Library of Congress Country Studies and the CIA World Factbook. No claims are made regarding the accuracy of Mongolia Economic Role information contained here. All suggestions for corrections of any errors about Mongolia Economic Role should be addressed to the Library of Congress and the CIA.