Mainly because china ans russia took away its most interesting parts though.

Mongolia doesnt really get much rainfall in most of its regions because the mountains in the north and south are blocking most clouds and thus are blocking most of the rainfall which is why mongolia is mostly dry steppe.

But no water also means less chance to live, which puts a hard cap on the population potential in mongolia.

İnner-mongolia in china is thus more liveable than independent mongolia, and its because russia took mongolias post-mountain regions in the north while china took mongolias post-mountain regions in the south.