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MongoliaDomestic Trade and Other Services
In pre-1921 Mongolia, domestic trade and services were
primitive. Few commodities were exchanged; those that were
primarily were by barter. Traders were almost entirely
foreigners--Chinese and Russian--except for Mongolians who
conducted trade and provided services at Mongolia's monasteries.
After the 1921 revolution, the government began seizing control
of the internal trade system and transforming it into a socialist
distribution network with Soviet assistance. In 1921 the
Mongolian Central Cooperative was established; in the late 1920s,
such Soviet trade organizations as the Stormong Company and the
Sherst Company began to displace all other foreign traders in the
Mongolian economy. In 1929 the Mongolian Central Cooperative was
expanded, and Chinese traders were expelled from the country. In
1932 the Mongolian Central Cooperative was reorganized as the
Union of Consumer Cooperatives. The Mongolian and the Soviet
governments also founded a joint-stock wholesale trading company,
Mongsovbuner, which took over the Mongolian Central Cooperative's
wholesale operations. In 1934 the Soviet Union handed over its
share of Mongsovbuner to the Mongolian government, which
transformed Mongsovbuner into the Mongolian State Trading Office.
The expropriation of monastic property in the late 1920s and the
early 1930s effectively ended the monasteries' participation in
trade. Forced collectivization of arads, however, failed
miserably and set back government attempts to socialize the
internal trade system. Nevertheless, about 90 percent of retail
trade was carried out by state and cooperative trade
organizations by 1940.
During World War II, state procurement from individual
households was instituted by means of taxes in kind and
obligatory delivery of goods. The wartime taxation measures
provided the foundation of Mongolia's procurement and
distribution system as the economy was collectivized in the
1950s. During the Three-Year Plan (1958-60), the Union of
Consumer Cooperatives was abolished, and its components were
consolidated with state trading organizations under the newly
formed Ministry of Trade and Procurement. By 1983 the state trade
network accounted for 95 percent of retail trade turnover;
cooperative agricultural trade represented the remainder. In the
late 1980s, this ministry still ran Mongolia's internal trade and
state procurement systems.
Data as of June 1989
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