In 1990, the Government of Mongolia decided to abandon central planning with the intention to move to a marked-led system. The new economic structure was to be achieved through privatization of state assets, tight monetary and fiscal policy and liberalization of prices and tariffs. With the establishment of the Mongolian Stock Exchange in 1991, the process of privatization and the establishment of a secondary stock market started. Almost 100% of training, catering and service entities and animal husbandry has been privatized. Housing privatization took place in 1997-1998, but only some portion of land in cities and local towns were privatized.

Mongolia has abundant pasture land and the potential for mineral and hydrocarbon exploitation. About 80% of Mongolia is suitable for extensive animal husbandry, and traditional herds include cattle, horses, camels, goats and sheep. Intensive crop cultivation is limited by the short growing season and sharp daily fluctuations in temperature. The country is rich in mineral resources including coal, iron, tin, copper, gold, silver, tungsten, zinc, fluor, spar and molybdenum, as well as semiprecious stones. Mining sector contributes almost 30 per cent of the GDP of Mongolia. Thermal power, produced from indigenous coal and imported diesel oil, and traditional sources of fuel are supplemented by electricity imports from the Soviet grid. About 20% of the population, mainly in the rural areas, remain without electricity.