**Table 12. Composition of Mongolia’s merchandise exports**

||**‘92**|**‘93**|**‘94**|**‘95**|**‘96**|**‘97**|**‘98**|**‘99**|**‘00**|**‘01**|**‘02**|**‘03**|**‘04**|**‘05**|
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|Primary goods|67|73|83|89|84|83|82|76|72|62|61|63|86|87|
|Cooper|45|42|51|53|41|35|27|26|30|28|26|26|33|31|
|Gold|9|6|3|11|12|21|25|21|13|14|22|25|28|31|
|Cashmere|3|3|7|9|12|6|7|10|10|11|6|4|5|5|
|Flour spar|3|2|3|4|5|4|4|4|4|4|3|3|2|2|
|Other primary|7|20|18|12|14|18|19|15|15|5|5|5|18|18|
|Manufactures|33|27|17|11|16|17|18|24|28|38|39|37|14|13|

_Source: World Bank (LDB)_

# **Figure 8. Value added per worker in Mongolia**<sup>37</sup>

<!-- Start of picture text --> Agriculture<br>Manufacturing<br>Mining<br>Services<br>Total<br>1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005<br><!-- End of picture text --> <!-- Start of picture text --> 1995 1996<br><!-- End of picture text --> <!-- Start of picture text --> 1997 1998<br><!-- End of picture text --> <!-- Start of picture text --> 2000<br><!-- End of picture text --> <!-- Start of picture text --> 2002 2003<br><!-- End of picture text --> <!-- Start of picture text --> 2004 2005<br><!-- End of picture text --> Source: Authors’ estimates based on data from Mongolian Statistical Yearbook (2004) and Government of Mongolia.

# **_3.3.1 Is poor infrastructure a binding constraint to growth?_**

In 2005, delays in obtaining basic service connections were still longer and service reliability was still lower in Mongolia than in other East Asian countries. However, public dissatisfaction with the inadequacy of transport services seems more widespread. Among the firms surveyed as part of the Productivity and Investment Climate Survey (2004), nearly forty percent of firms<sup>38</sup> mentioned transport bottlenecks as a major business impediment in Mongolia. Meanwhile, less than a quarter of the firms viewed the reliability of and access to electricity services as a major obstacle, and even fewer, viewed water and telecommunication services to be an issue.<sup>39</sup>

> 37 Economy-wide labor productivity growth estimated, as the value added at constant prices per worker, stagnated over the past ten years. Labor productivity in agriculture, which employs a sizable share of Mongolia’s working age population, was lower than other sectors’ labor productivity, and declined substantially after 2000, while in services labor productivity was only slightly higher than the average. 38 Even though only 38 percent of firms surveyed as part of the Productivity and Investment Climate Survey (2004) perceived transportation to be the most severe constraint to growth, the share underestimates the severity of transportation services as an obstacle to trade and export growth since the sample includes both exporters and domestic-oriented firms (i.e. firms that do not trade).

> 39 The results on telecommunications are encouraging as this sector creates conditions for birth and growth of new information technology firms that are vital for productivity growth. A cross-country comparison based on data from World Bank’s SIMA suggests that just like in China most of the main lines are in urban

21