A Look At How Mongolia Went Bust

Bloomberg Editorial: How the World's Fastest-Growing Economy Went Bust

Not so long ago, Mongolia was the world's fastest-growing economy. Now, by nearly every metric, it's in a dire fix. Its debt has surged, its currency has plummeted, and its budget deficit has widened alarmingly. Foreign investment has dried up and economic growth all but ceased. Even the poor antelope are beset by plague.

Making matters worse, some staggering bills are coming due. The government, along with a state-backed development bank, is on the hook for more than $1 billion in maturing bonds over the next year, starting with a $580 million payment due in March. By one account, locals are so anxious they're donating their horses to help avoid default.

Thankfully, better options are available. This week, the government is negotiating with the International Monetary Fund for a bailout, its sixth in less than three decades. China also may be willing to lend a hand, at a price. Yet even if it avoids default, Mongolia should stand as a cautionary tale for the ages.

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WNU Editor: Mongolia .... another country that borrowed too much money, and now cannot pay its debts. On a side note .... had the good fortune of vising Ulan Bator (Mongolia) in 1987. It was incredibly poor then .... and I was not impressed. But that changed when I enjoyed a Mongolian beef feast. Aside from enjoying shark fin soup in China and once in a while Kobe beef in Japan .... that Mongolian beef feast is the best meal that I have ever had bar none.