ULAANBAATAR: Mongolia is in the depths of an unusually harsh winter that is decimating livestock and sending temperatures to minus 56 degrees Celsius. But an economic winter has also hit people like factory owner Jargalsaikhan.
The 40-year-old once thought Mongolia's economic boom would last more than a decade.
He had had ambitious plans for the cement factory he started eight years ago, thinking that bank lending will keep flowing.
Then, the Mongolian economy collapsed, and his factory can barely survive now.
Mr Jargalsaikhan said: "I already laid off half of my 24 employees. I may have to carry out another round of retrenchment. And if the economic situation doesn't improve, I will have to close down the factory."
It is a story of boom and bust that is repeated across Mongolia.
In 2011, riding on the global mining boom, Mongolia’s economy expanded by a whopping 17.3 per cent.
But the economy crashed just as quickly as it expanded.
The World Bank estimates that Mongolia’s economic growth will further slow to just 0.7 per cent this year, from 2.3 per cent in 2015.
Mongolia’s currency, the tugrik, has also plummeted nearly 12 per cent against the dollar this year.
The economic crisis was caused by a collapse in commodity prices, mounting debt and years of off-budget spending.
A slump in global commodity prices has pushed Mongolia into an economic crisis. (Photo: Jeremy Koh)
But since coming to power in June, the Mongolian People’s Party has announced an economic reform plan containing spending cuts. They have also asked the International Monetary Fund (IMF) for help.
The country’s foreign minister has said he is confident an agreement with the IMF would be in place by February.
IMF aid could ease financial concerns for the country, as Mongolia will have to repay 1 billion US dollars in debt by 2018.
Senior Professor Oyun Luvsandorj from the National University of Mongolia's Business School said: “We are too dependent on mining, so we need to stop this reliance on mining and diversify the economy because as long as we are dependent on mining, the global economy matters a lot and if there’s a global economic downturn, the Mongolian economy goes down too.”
While the country awaits a bailout from the IMF, there are fears that many Mongolians could risk being dragged below the poverty line again as the economy sinks.
The country’s unemployment rate jumped to 8.3 per cent in the final quarter of 2015, from 6.3 per cent a quarter earlier.
Professor Dulamsuren from the National University of Mongolia said, "The crisis has affected almost all Mongolians, and due to this crisis, a lot of factories shut down and also the unemployment rate has increased.”
It remains unclear, however, just how severe the IMF bailout may be.
If the proposed terms seem too onerous, some say that Mongolia could turn to China, which has extended it some credit in recent years.
But that could mean giving China too much commercial and political leverage over Mongolia.
Either way, the government needs to move fast, as time is not on the side of Mr Jargalsaikhan and other struggling businesses across the country.