Ochir Damchaa chuckles as he drives his second-hand Toyota sedan through the alleyways of Nalaikh, a ramshackle town 35 kilometres east of Ulaanbaatar: “There’re just two kinds of jobs here: drive a taxi, or dig coal.”

Nalaikh was once a major Soviet-era industrial hub, and the site of Mongolia’s first mine. Today, though, the town is littered with ruins of former factories, such as Mongolia’s only glassworks. Residents continue to work as freelance miners on the grounds of the former state-owned coalmine. But jobs are scarce in Nalaikh, as in every other small town across Mongolia.

Despite rapid, mining-driven economic growth, Mongolia is experiencing persistent unemployment, a widening income gap, and a 30 percent poverty rate. The country’s leaders are now promising to diversify the economy, aiming to create jobs that push more people above the poverty line.

Mongolia’s massive Oyu Tolgoi gold and copper mine started shipping copper concentrate to China in early July. By 2020, the joint-venture between Canada’s Rio Tinto, Anglo-Australian firm Turquoise Hill and the Mongolian government is projected to account for about 35 percent to GDP, according to Oyu Tolgoi’s website.

Mongolia at present appears to be at high risk of suffering from so-called Dutch Disease, an economic condition in which a nation’s economy becomes overly dependent on the export of natural resources. Mining currently contributes about a third of GDP and accounts for 89.2 percent of the country’s total exports, according to data compiled by Oxford Business Group.

But the sector employs only about four percent of the entire workforce. Inversely, the traditional agricultural sector – livestock for meat and wool – employs about 40 percent of the workforce and contributes less than 15 percent of GDP, according to the same data.

The transition from a largely agricultural economy to one dominated by mining has contributed to disproportionate growth and exacerbated a problem in Mongolia, dubbed the “missing middle”, says Saurabh Sinha, senior economist at the United Nations Development Programme (UNDP) in Ulaanbaatar.

“On the one hand you have the mining sector which is running away and driving the entire economy and on the other hand you have the agriculture, the livestock and nomadic lifestyle. And between these two, the urban manufacturing sector is really scant and limited,” Sinha says.

This wasn’t always so. Mongolia’s manufacturing sector comprised about a third of the economy in 1988, just before the collapse of communism. In 2011, the figure was seven percent, according to Oxford Business Group.

The decline, Sinha points out, is partly due to the collapse of many state-owned factories following the transition to a market-oriented system. He believes options for reviving manufacturing in the country are limited given the small population and poor infrastructure.

President Tsakhiagiin Elbegdorj, re-elected for a second term in early July, has promised to promote economic diversification policies, but years of talk about the development of non-mining sectors have produced little, says Sukhgerel Dugersuren of OT Watch, a non-profit that monitors the impact of Oyu Tolgoi.

“Ten years ago Mongolia started talking about economic diversification: improving its competiveness, developing the IT sector, developing eco-tourism,” she said. But she believes the attention on mining has adversely affected growth in other sectors over that period.

“Economic diversification simply means not putting all your eggs in one flimsy basket,” Dugersuren says, referring to the Oyu Tolgoi mine. “A nation that is dependent on one corporation for 35 percent of its GDP is not in a safe place.”

In April, Ulaanbaatar demonstrated its support for agricultural development with 86.2 million dollars in soft loans for cashmere companies, garment industries and dairy producers. But limited private investment and scant infrastructure continue to check the agriculture sector’s growth potential, according to French entrepreneur and dairy expert Didier le Goff, who started a cheese factory on the outskirts of Ulaanbaatar in 2010.

“Mining is fast money for a short time, agriculture is slow money forever,” says le Goff.

He believes Mongolia has a unique potential to become an exporter of “organic bio-products” given the country’s nomadic heritage. But he admits sourcing local milk year round is difficult and enormous challenges still exist to rebuild and streamline supply chains in the vast country.

A 2009 report from the U.N.’s Food and Agriculture Organisation (FAO) noted that 70 percent of milk consumed in urban Mongolia was reconstituted from imported milk powder, despite a livestock population of over 30 million animals – or about 10 animals per every Mongolian citizen.

Jim Dwyer, director of the Business Council of Mongolia, a private business lobby, agrees that developing the agricultural sector is Mongolia’s best bet to diversifying its economy. He argues the government must reinvest mining wealth in infrastructure and social services to generate broad employment.

There are some signs authorities are listening. Earlier this year, Ulaanbaatar raised 1.5 billion dollars in its first-ever bond offering. Though authorities announced plans to spend a large share of the money, about 850 million dollars, on improving infrastructure across the country and to support the mining sector with construction of a new power plant and a new railroad, about 145 million dollars was earmarked for improving cashmere production technology, dairy production and wool industries.

“Agriculture is one thing we do have here. When the Russians left in 1990, the country was self-sufficient, even exporting various food products. There’s tremendous opportunity here with the [mining] money to bring that back to life,” says Dwyer.

Editor’s note:  Pearly Jacob is a freelance journalist based in Ulaanbaatar. This story originally appeared on EurasiaNet.org.

If all goes as envisioned on Jun. 28, Mongolia’s parliament will no longer be a male bastion.

Supported by recent revisions to Mongolia’s election law, a record number of women are on the ballot in parliamentary elections on Jun. 28. They are seeking seats in what has traditionally been a male-dominated body.

Of the 544 candidates running for the 76-seat parliament, 174 are women – well above a newly established 20-percent quota. But where their names appear on the lengthy ballot may be a determining factor in whether this becomes a breakthrough occasion.

Currently, the proportion of women in the Ikh Khural, or parliament, ranks Mongolia near the bottom of the list of countries surveyed by the Geneva-based Inter-Parliamentary Union. Women’s rights activists say government policies and patriarchal attitudes have discouraged women from entering politics.

Data collected by research group Monfemnet even shows a gradual decline in the number of women elected to parliament in all elections since 2000, when women comprised 11.8 percent of the legislature. The figure dropped to 6.6 percent after the 2004 vote and to 3.9 percent in 2008.

“It’s a paradox that women … hold 70 percent of the jobs in the health and education sectors, and yet more than 90 percent of the people in positions of power are men,” says Otgonsuren Jargal, a veteran journalist and environmental activist who runs Nomad Green, a citizens’ environmental reporting initiative.

Jargal is a Green Party candidate contesting a single-seat electoral district in Sukhbaatar Province. She says she never could have dreamed of being nominated by her party were it not for the female quota.

“Now I know it’s possible. After working for six years in civil society, this is a great opportunity to share what I have learned and believe in … no matter if they vote for me or not,” she told EurasiaNet.org.

This election cycle is not the first time Mongolia has experimented with quotas to encourage female candidates. In 2005, after lobbying from women’s groups, political parties were told at least 30 percent of candidates must be women. The law was suddenly revoked just before the 2008 election, however, and never tested.

Members of Women for Social Progress (WSP), a non-governmental organisation based in Ulaanbaatar, believe the decision to rescind the 30-percent quota was made without substantive discussion. The experience underscores the lengths some MPs will go to limit the political participation of women in Mongolia, contends WSP Director Odmaa Davaanyam.

Davaanyam believes the reintroduction of a quota last year, though reduced to 20 percent, is thanks to pressure from advocacy groups. While it deserves to be lauded in theory, she argued that in practice it may not do much to change the status quo: that is because the new rules say nothing about where women should appear on party lists.

“If you look at the party lists, very few women are at the top,” Davaanyam says. “The law is written, but in real life parties are doing little to support women.”

Mongolia has a five percent threshold for a party to enter parliament and, according to the Sant Maral Foundation, a respected pollster, at least three parties are expected to win seats via this proportional system.

The proportional system allots 28 seats. That means it is unlikely a party can win more than a dozen seats. The two leading parties – the Democratic Party (DP) and the Mongolian People’s Party (MPP) – have nine and 11 women respectively on their 28-member lists. But DP’s first woman is placed at number seven; MPP’s at number 10.

“Women are still at the bottom of the list because (the law) hasn’t specified how that 20 percent quota is to be secured,” says Sukhjargalmaa Dugersuren, a former senior government aide who helped draft Mongolia’s gender equality law.

Dugersuren tops the party list for the Civil Movement Party (CMP), the first party to field an overwhelming 95 percent majority of female candidates. While her party has barely registered on pre-poll opinion surveys, and is not expected to secure any seats, Dugersuren is confident they have made their mark.

“All over the country people know there is a party that has nominated women intent on pushing for change,” she states.

Another change to the electoral code offers hope for female candidates, however: Not all seats are determined through party lists. The new, mixed voting system is expected to help the electoral chances of women, independents, and smaller parties.

Of the 76 seats in the Ikh Khural, 48 are to be determined in individual races.

In these lists of individual candidates, selected by district, but often associated with a party, women stand out, says Naranjargal Khaskhuu of Globe International, a Mongolian democracy watchdog.

“Women are perceived as less corrupt,” she says.

It is an important consideration in a country that ranks 120 out of 183 in Transparency International’s Corruption Perceptions Index. She believes that because of growing discontent over the government’s handling of Mongolia’s vast mineral resources, voters are keen to see more women enter the legislature.

Khaskhuu is cautiously optimistic, hoping at least 10 women will win seats. But she remembers the last time.

“Take the 2008 elections,” she says, referring to the fact that only three women were elected that year from the 67 on the ballots. “It’s the results that prove if mentalities have changed. So far we haven’t had much evidence of that.”

Editor’s note: Pearly Jacob is a freelance journalist based in Ulaanbaatar.

*This story originally appeared on EurasiaNet.org.