The Mongol conqueror Genghis Khan may have been an ardent proponent of an early form of globalization. But Mongolia has taken its time embracing international capital markets. Now this “Mortar Economy” — the country is wedged between two BRICs, Russia and China — may be set for rapid growth.

Mongolia is on the verge of opening a stock exchange. The market will finally plug the landlocked nation into the grid of global finance, facilitating privatizations, investment, and the flow of capital to would-be entrepreneurs among its 3 million people.

And the money almost certainly will flow. While still small at around $6 billion, Renaissance Capital reckons Mongolia’s GDP will be the world’s fastest growing over the next five years, growing to $23 billion by 2013. Handling that growth will be a big challenge.

Luckily for Mongolia, it doesn’t, for example, have to reinvent the wheel with its bourse. The London Stock Exchange is the frontrunner among four contenders to run an Ulan Bator exchange. In theory, that will allow the nation to vault overnight from markets not so different from the city’s Naran Tuul bazaar right to electronic trading.

That should help the government implement its privatization program. It is committed to handing a tenth of all proceeds to its citizenry, almost a third of which is still nomadic. Developing an exchange means Mongolians can receive tradable securities in state companies with market prices. That should avoid the missteps of Eastern European nations which handed out vouchers without obvious value that were quickly accumulated by today’s oligarchs. There are also plenty of case studies that may help Mongolia manage cash inflows and their potential impact on its currency, the tugrug, and economy.

Perhaps more by luck than judgment, Mongolia’s tardy return to the global scene may also be well timed. It is estimated to have the world’s second-biggest reserves of copper and uranium, and the 11th biggest stock of coal.

Put it all together, and some eight centuries after its last big international venture, Mongolia stands to benefit from the convergence of three booms: in China, in commodities and in the edgiest of emerging markets.

Mongolia may benefit from being late to party

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