In addition to food, their cows, horses, sheep, goats and camels provide transport, heat and clothing. The effects of the zud will likely extend to the urban areas, as herders will move to the cities, especially the capitol of Ulaanbaatar, further saturating the labor market.
There is a large labor force in Mongolia. Half of that labor force works for $2 or less a day. Their standard of living is poor. Roughly 36% of Mongolians are under the level of poverty, and 20% are unemployed. Often overlooked, these people are invaluable to the recovery of Mongolia. Because they were not allowed to become involved in politics or industry, communism's grip was slowly lost.
Since May of 1997, when the recently elected Democratic Union party pushed reforms through the government, Mongolia's situation has improved little, and in some areas, gotten worse. In the new market economy, Mongolia became the only country in the world to have 100% free trade. Other less radical measures included spending cuts, closing of insolvent banks, raising utility prices, and the privitization of all industries except for meat processing, milk and flour production. .
Since then, Mongolia's attempt at "shock therapy" failed. In 2000, the formerly communist Mongolian People's Revolutionary Party (MPRP) regained power in 72 of 76 legislative seats. They continue to reform certain areas of the economy, but are much more reluctant to undertake any serious measures. The party is burdened with a larger national debt, and a poorer ecosystem than before the transition from a command economy. .
The most difficult task for Mongolia has been it's strive to mirror it's neighboring countries, Russia and China. Both Russia and China have margin financial support from other countries, and are able to establish themselves politically, socially, agriculturally, and economically in the world. Mongolia has very little ability to do the same.
