Selenge Province - Money

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Mongolia has been presented with the opportunity to build a unique framework for themselves both politically and economically as a result of their recent change in governmental structure. Building this foundation is proving to be a very complex process as two distinct parts define the Mongolian economy: the formal and informal sectors. The formal sector includes all businesses and organizations that are registered with a licensing authority and a tax commission while businesses and organizations in the informal sector are not. As a result of this registration, there is a clear record of the businesses included in the formal sector adding a level of efficiency to the search for desired commodities and services. The majority of the Mongolian economy, however, operates in the informal sector. Since this means businesses are not registered with a licensing authority or tax commission, there is no centralized record of all the operating organizations. Business relationships in the informal sector are developed and maintained over time into lasting partnerships. While it poses some obstacles for organizations attempting to enter into new business interactions in the informal sector, it facilitates the development of coalitions of commodity and service providers that end up working together for long durations of time. Operating in such an economy requires a great deal of patience and understanding that time is required to accomplish projects. Time must be allocated for research and inquiry into which businesses provide what commodities and services as well as relationship development with whichever organization is ultimately selected.

In a non-economic sense, value is assigned to two primary commodities in Mongolia: horses and vodka. In countless societies, past and present, horses are signs of fortune and success as well as a way to measure an individual or family’s wealth. Such is the case across the entirety of Mongolia. Livestock is another way to measure a family‘s wealth, but individuals who own large numbers of horses are considered to be among the wealthiest in society, whether rural or urban. A great deal of importance is placed on national and local horse races and a family or individual can gain elevated prestige by winning these races. Ultimately, horses contribute to boosting an individual or family’s asset value. While it is not used as a measure of wealth, vodka holds a significant amount of value in Mongolian society. The origin of vodka distillation in Mongolia is unknown, but distillation and consumption have quickly become widespread traditions in Mongolian culture. There is a great deal of national pride in Mongolian made vodka and it is presented as a gift to everyone an individual interacts with.

Date Entered: June 2011