NumMongolia @NumMongolia

Content: As of 2025, expenditure approved for the activities of the Minister of Education and for the implementation of relevant programs, projects, and measures accounted for 12.5% of total State Budget expenditure. Education is widely regarded as one of the highest-return areas of public investment. This is because education not only enhances individuals’ knowledge and skills, but also increases labour productivity, the capacity to absorb and utilize technology, and innovation capabilities, thereby supporting long-term economic growth. UNESCO recommends allocating 15-20% of total public expenditure to education and considers sustained investment in education to be a fundamental condition for sustainable development. A common characteristic of the world’s most competitive economies is not an abundance of natural resources, but the quality of their human capital and their capacity to create knowledge and translate innovation into practice. The development experiences of countries such as Finland, Singapore, and the Republic of Korea demonstrate that sustained investment in education, skills, science, and technology has laid the foundation for high-income, knowledge-based economies. In Mongolia, the allocation of 12.5% of total State Budget expenditure to education in 2025 represents more than the financing of school infrastructure and educational activities. It is a strategic investment in developing future engineers, doctors, researchers, teachers, entrepreneurs, and technology professionals, thereby contributing to economic diversification, higher labour productivity, and stronger national competitiveness. Under Mongolia’s 2026-2030 Investment Program, a target has been set to construct 108 new schools, 95 kindergartens, and 83 dormitories nationwide through public budget investment, while reducing the average shift coefficient by 0.69 percentage points. Notably, between 1990 and 2025, the education sector attracted only USD 11.7 million in foreign direct investment. As of 2025, only 13 employers with foreign investment and approximately 600 insured persons were registered in the sector. The paradox is that, despite education being recognized as one of the fundamental drivers of human capital development, productivity, innovation, and long-term economic growth, the sector remains one of those attracting the least foreign investment. In other words, the development of a sector widely regarded as one of the highest-return areas of investment has, to date, relied predominantly on public financing.

Content: Mongolia's dehaired cashmere export revenue grew 4.7-fold in a single year, and Mongolia alone supplies 100% of China's and Nepal's total dehaired cashmere imports. In 2025, Mongolia exported a total of 4.0 thousand tonnes of dehaired cashmere, generating USD 330.6 million in export revenue. Export revenue grew 4.7-fold compared with the same period of the previous year, and dehaired cashmere accounted for 2.1% of Mongolia's total export revenue. By key market, Mongolia exported 3.4 thousand tonnes, or 83% of total exports, to China and 447 tonnes, or 13%, to Italy. Average export prices per tonne varied significantly by market: USD 80 thousand in China and USD 98 thousand in Italy, while in France the price reached USD 133 thousand, roughly 66% higher than in the Chinese market. From the importing countries' perspective, Mongolia alone supplies 100% of China's and Nepal's total dehaired cashmere imports. On 12 May 2026, the Mongolian Wool and Cashmere Association officially registered “Mongolian Cashmere with Protected Geographical Indication” with the Intellectual Property Office and received a certificate. This geographical indication highlights the origin, natural colorsand distinctive characteristics of Mongolian cashmere, and aims to enhance its reputation, value and competitiveness in international markets. Reflecting Mongolia's geography, nature and climate, the cashmere comes in a range of natural colors, and it was registered under the geographical indication in five basic colors: white, off-white, blue-grey, and dark. Going forward, the Government of Mongolia plans to register the geographical indication with the European Union, develop and enforce the related standards, and run long-term marketing to raise the recognition and value of Mongolian cashmere in international markets. The Office of the President is also working to host the World Cashmere Forum in Mongolia in 2027 with the participation of international brands.

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Content: As the global herbal medicine market heads towards half a trillion US dollars, Mongolia's 845 species of medicinal plants are emerging as a new economic opportunity. An article in Frontiers in Pharmacology refers to “not less than 80% of people worldwide relying on them for some part of primary healthcare.” According to the WHO Global Traditional Medicine Centre, traditional medicine is used in an estimated 88% of countries worldwide. In Mongolia, the Plant Protection Agency was established as a government implementing agency under the Minister of Food, Agriculture and Light Industry by Government Resolution No. 248 of 25th of December 2024. Studies of Mongolia's medicinal plants have recorded some 5,107 species of higher and lower plants belonging to 16 divisions, 306 families and 1,220 genera, of which 845 species are identified as medicinal plants. Research is advancing rapidly on the structure and composition of the biologically active compounds in medicinal plants and herbal preparations used in Indian, Tibetan and Mongolian traditional medicine, on determining their pharmacological effects and mechanisms of action, and ultimately on developing scientifically grounded, standardized and selectively acting medicines. Alongside these resources and research opportunities, the global market is expanding rapidly. Fortune Business Insights estimates that the global herbal medicine market reached USD 251.24 billion in 2025 and is projected to reach USD 515.92 billion by 2034. In Mongolia, sales from the manufacture of basic pharmaceutical products and pharmaceutical preparations reached MNT 121.8 billion in 2025, according to preliminary figures, up 8.9% on the previous year. Meanwhile, in 2025 exports in the category covering medicinal plants and plant-based raw materials used for medicinal purposes reached USD 784 thousand, an increase of USD 630 thousand, or 409%, on the same period of the previous year. #fyp #economy #asia #mongolia #medicine

1/2 Japan's experience demonstrates that SME development is closely linked not only to market forces but also to sustained, government-led policy support over the long term. Following World War II, Japan recognized SMEs as an important driver of economic reconstruction, industrial development, and balanced regional growth. The framework for supporting the SME sector was built during the reconstruction period and developed substantial domestic financing capacity. In addition, various support measures were implemented through management, fiscal, commercial, and regional development frameworks.

Content: SMEs: The Backbone, Not Yet the Engine According to the World Bank Group's Mongolia Country Private Sector Diagnostic(2026), Mongolia's financial sector is heavily dominated by commercial banks, which account for roughly 90 percent of domestic financial intermediation. The top three banks hold around 80 percent of total banking assets, reflecting a highly concentrated market with limited competition and no foreign bank presence. Domestic credit to the private sector averaged 42.8 percent of GDP during 2020-2024, about half the East Asia and Pacific average. High interest rates and limited access to credit remain significant barriers for businesses. Although small and medium enterprises account for more than 90 percent of registered businesses, they receive less than 20 percent of total bank credit. Limited access to alternative financing channels, including venture capital, private equity, and corporate bonds, further constrains investment. This constrained access to finance is also reflected in SMEs' contribution to value added. According to the National Statistics Office of Mongolia, the value added generated by small and medium-sized legal entities accounted for 5.8 percent of Mongolia's GDP in 2024. By economic activity, SME participation was highest in accommodation and food service activities (17.8%), construction (17.3%), and wholesale and retail trade (16.9%). In comparison, the share of SMEs was 6.3 percent in manufacturing and 4.0 percent in agriculture, forestry, fishing and hunting. Furthermore, the share of small and medium-sized legal entities in total exports declined from 4.3 percent in 2017 to 1.7 percent in 2024. This trend suggests that SMEs continue to face considerable challenges in accessing international markets and expanding their export activities. Limited and costly access to finance constrains investment in productive capacity, technological upgrading, and business expansion, thereby undermining export competitiveness. As a result, financial constraints remain a significant factor limiting SMEs' participation in Mongolia's external trade. #Mongolia #economy #worldbank #ifc

2/2 SME support policies were closely aligned with Japan's national development strategy, with policy priorities evolving alongside the country's stage of economic development. One of the key drivers of success was the Fiscal Investment and Loan Program (FILP). Through this mechanism, the government supported underdeveloped sectors and regions, alleviated development bottlenecks, and promoted balanced growth across the country. Accordingly, SME development in Mongolia should be approached not solely as a matter of access to finance, but as a broader development policy priority closely connected to national competitiveness, economic diversification, balanced regional development, and export expansion. In this regard, Japan's experience highlights the importance of integrating SME development into national development planning through coordinated financial, industrial, trade, and regional development policies.