Edited by Léo-Paul Dana and Robert B. Anderson
Chapter 13: Indigenous Small and Medium Enterprises (SMEs) in Mongolia
Batchimeg Namsraidorj, Enkhjargal Adiya and Rosalind Chew Introduction A dynamic private sector is a key component in providing opportunities for people to build a better life for themselves and their families, and contribute to the communities in which they live. Nowadays, more than 26 000 Small and Medium Enterprises operate in Mongolia, and contribute about 75 per cent to her GDP. Thus SMEs play a signiﬁcant role in the socioeconomic life of the country. However, owing to some socioeconomic speciﬁc conditions of the country, such as low market capacity, landlocked geography, underdeveloped infrastructure, dependence on imports of raw materials and lack of investment, the development of SMEs in Mongolia is unsatisfactory compared with that in other countries. In order to help them overcome the diﬃculties that they face in development, the Government of Mongolia approved and implemented the ‘SMEs Development Programme’ in 1999. The main purpose of this programme was to create a favourable economic and legal environment for the development of the SMEs. Nevertheless the SMEs still face considerable constraints and obstacles, especially in the urban area. This chapter gives an overview of the SME in Mongolia by examining the current situation, and attempts to analyse the obstacles and constraints faced by the entrepreneur in Mongolia. Section 1 Country background Mongolia is located in Central Asia and is roughly three times the size of France and four times that of the United Kingdom. Mongolia covers an area of 600 000 square miles and has a population...
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