FINAL REPORT

Since the beginning of the transition period, a fundamental restructuring of the economy took
place. The former state farms, negdels and processing facilities were privatized or dissolved
and many of the employees lost their jobs. Thus poverty level has increased dramatically from
almost zero at the end of the socialist period to 45% in 2005 (See Fig.7). According to local
statistics, the poverty level is highest in the aimag center where 56% of all households are
classified as poor or very poor.
Not
Poor
55%
Very
Poor
18%
Poor
27%
Services
20% Agricultu
re
Industry
78%
and
Construct
ion
2%
Source: Statistics provided byaimag administration
Figure 7: Poverty in Khovd aimag (2005)
Source:NSOM (2006)
Figure 8: GDP of Khovd aimag by sectors (2005)
Nowadays the economy is dominated by the agricultural sector which comprises more than
three quarter of the aimag’s GDP. The tertiary sector amounts to 20% and the share of
industry and construction is only 2% (see Fig. 8). 10 In 2004 the latter sector employed less
than 400 workers (Aimag Administration Statistics 2006. Most of the service and remaining
manufacturing activities are located in theaimagcenter. This includes Khovd State University
and a branch of the Agriculture University of Mongolia which is located in Ulaanbaatar.
Mobile livestock herding is the most important livelihood strategy of the former state
employees and negdel members and has increased significantly since the beginning of the
transition period. Today, almost half of the aimags 19.500 households are registered as
herders (NSOM 2006:71, 177) (see Fig. 9).
10 The industrial sector comprises minor foodstuff processing plants (bread, soft drinks, cookies, meat), textile
workshops and two construction materialfactories (brick and concrete) For details see Annex I.
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