This article is from the Mongolia FAQ, by Oliver Corff with numerous contributions by others.
The nomadic type of economy is challenged by modern-day's industrial
production with its typical and profound division of labour; the
industrial society which prevails in the few major cities of Mongolia,
Ulaanbaatar (being the capital), Darxan (in the north) and Ärdänät
(the mining centre) is based on trade and the exploitation of natural
resources like ores and coal; this economy is virtually detached from
the countryside and was hit hardest during the economical crisis of
the early 1990s.
The rift between countryside and city is so big that food stores in
Ulaanbaatar offer German jam, butter from New Zealand, cheese from
Russia, mustard from Czechia, and juice from Poland (these are just
examples), but virtually no products of Mongolian origin besides bread
and sausage. Mongolia lacks the technical means to produce and
transport dairy products in winter; with temperatures below -30
centigrades milk and cheese have to be heated rather than to be
cooled! As a consequence, relying on imported foodstuff without access
to local resources is an expensive endeavour for the average city
dweller stretching the family budget to its limits.
 
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