Mongolia's stability and growth face external threats
Subject The political and economic outlook for Mongolia. Significance Mongolia is recovering from a largely self-inflicted financial crisis that resulted in an IMF bailout two years ago. Meanwhile, isolationism in the United States and weakened political unity in the EU leave Mongolia with little choice but to slide further towards the neighbouring powers, China and Russia -- an uncomfortable trend for the sole liberal democracy in the region. Mongolia’s return to growth and relative political calm is dampened by external forces including weakness in metals prices and emerging market currencies. Impacts The government will focus on strengthening the economy; the direction of economic policy bodes well for continued growth. Infrastructure needs, such as energy and secure long-term water supplies for the capital, will see significant progress towards resolution. The 'truce' between the two major parties makes political conditions ripe for disruption by a new political movement or politician.