Mongolia's construction boom driven by the mining industry's profits presents a range of challenges for Ulaanbaatar. The rapid urbanization has led to the disappearance of the nomadic lifestyle, scarcity of public amenities, and traffic congestion. Outdated city planning strategies and a lack of effective implementation of infrastructure plans have contributed to these issues. Furthermore, allegations of corruption among public officials and questionable real estate deals raise concerns about the equitable distribution of wealth and the integrity of the construction sector. The situation calls for a comprehensive approach to balancing economic growth, urban development, and the well-being of Mongolian society.
In Ulaanbaatar, the traditional yurts that have been a symbol of the nomadic lifestyle for centuries are being replaced by tall buildings. This indicates the gradual disappearance of the nomadic lifestyle. According to the residents, the surge in construction in Mongolia, which has been encouraged by the mining industry’s profits over the past ten years, which has resulted in a scarcity of space for essential public amenities such as hospitals and playgrounds for children.
The mining Industry's expansion in Mongolia has been a driving force behind the country’s significant economic growth, with coal sales contributing to one-quarter of the gross domestic product (GDP) in 2022.This growth in the industry has also led to an increased demand for luxury apartments and office spaces in Ulaanbaatar.
Unfortunately, the development has been disorganized and rapid, and the capital city’s population has surged from around half a million in the 1990s to approximately two million in 2022. This has resulted in daily traffic congestion, causing people to spend lengthy periods commuting to and from work or other destinations.
According to some, the country’s economic boom has not translated into much-needed civic infrastructure, leaving many children without access to outdoor recreational facilities. The shortage of space makes it challenging to construct larger playgrounds, schools, and hospitals, as many of these buildings were erected over 30 years ago during the Communist era.
Ironically, the Shangri-La hotel, located near the parliament building, offers an impressive range of amenities and services, such as a spa, gym, and a large outdoor pool. It is located very close to the parliament building, offers breath-taking views and has numerous rooms. However, its prices are exorbitant and beyond the means of most Mongolians. The Shangri-La Hotel is said to have been built on land that was initially designated for a children’s amusement park.
Public amenities like schools and kindergartens are already overstretched, and each classroom is often crammed with 50 to 60 children. According to experts, the haphazard management of public spaces is due to outdated city planning strategies.
According to local experts on the matter, there were plans in place to create adequate infrastructure, but those plans were not implemented effectively enough. Some areas that were initially intended for waste disposal sites have now become the most expensive residential neighbourhoods in Ulaanbaatar.
The city’s planning approach was heavily influenced by the Soviet Union’s model, which separated workspaces from residential areas. This policy aimed to relocate working-class individuals from inner-city slums to well-managed suburbs. However, this approach has resulted in a concentration of workplaces in the city centre, causing massive traffic congestion and gridlocks in the primary square of Ulaanbaatar
There are more significant concerns related to the construction boom in Ulaanbaatar. In response to public protests, the city’s mayor announced in 2021 that no new construction permits would be granted, except for schools, until 2040. However, the ban does not apply to already-approved projects, which means that construction activities are still ongoing throughout the city.
Some people view the construction boom in Mongolia as a symbol of more significant problems, especially alleged corruption among public officials in a country where poverty rates are stagnant. Last year, the CEO of a state-owned coal export company was investigated for embezzlement, and the country’s anti-corruption agency is currently probing many other cases related to real estate deals.
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