FDI to Mongolia: Restrictions, China, and Comparisons with Canada

Posted on December 5, 2012 by JDierkes

Ever since the Chalco bid for South Gobi Resources prompted the swift passage of a Foreign Investment Law by the Mongolian parliament I’ve been struck by some of the parallels between this law and its counterpart in Canada. I tweeted about this some weeks ago as well.

Feeding the Hungry Dragon

Now, a very interesting policy update for the Canadian Defence & Foreign Affairs Institute has me jumping off my fence and wanting to weigh in on this topic. The policy update (November 2012 PDF) was written by Charles Krusekopf and Hugh Stephens. These are authors who are definitely worth paying attention to. Charles has been involved in Mongolia and research on Mongolia for quite some time. He is the founder and continues to serve as the Executive Director of the American Center for Mongolian Studies. [Disclosure: I serve on the Executive Committee of the Board of Directors of the ACMS.] The ACMS has established itself in the 10 years of its existence not only as the go-to organization for researchers of all stripes doing research in or on Mongolia, but has become a mainstay of relations between Mongolia and North America. It also houses an ever-growing library that offers access to scholarly materials to Mongolians.

Hugh has had a stellar career with the Canadian foreign service and then in the private sector, mostly in Asia. He knows policy-makers and policy-making processes in Asia intimately.

In their piece, Hugh and Charles (S&K hereafter) argue that Mongolia offers a cautionary tale for the Conservative government as it makes decisions about resource investments in Canada by foreign investors. They base this argument on their view that given the similarities between Mongolia and Canada in terms of the strength of the resource economy, but also the need for foreign direct investment in this sector, the reactions to decisions made in Mongolia may offer a glimpse at reactions that Canadian decisions might prompt.

In their eyes, developments in Mongolia this year are a cautionary tale because the passage of a foreign investment law there has raised the political risk for investments in Mongolia, particularly for Chinese investors, but as a quasi-collateral damage, for all foreign investors.

Their argument was endorsed by a Wall Street Journal “Canada Real Time” blog post by Paul Vieira.

Similarities and Differences between the Mongolian and Canadian Foreign Investment Law

Before I turn to developments in Mongolia, a quick note on the parallels (or lack thereof) between the Canadian and Mongolia Foreign Investment Law.

The greatest similarity obviously is the fact that such a law exists and that this law demands a government review of investments in certain industries triggered by thresholds of the financial volume of these transactions.

Discussions about the application of the Canada Investment Act to the bid by Chinese state-owned for Nexen are ongoing in Canada. The general expectation had been that a Conservative government would welcome such investment. However, this government has actually turned down a number of such bids, swayed by economic nationalism rather than a free trade/capitalist agenda. In the CNOOC bid this debate is sharpened by the fact that the bidder is a state-owned Chinese company. Both, “state-owned” and “Chinese” appears to have raised warning flags in parts of the Conservative government.

S&K are not alone in warning that these discussions in Canada are likely to hurt Canada’s reputation as an investment destination. This is an argument that another highly trustworthy voice on Asia in Canada, Joseph Caron, DFAIT Asian grand slam winner as the former ambassador to China, India and Japan, made in October in the Financial Post.

Earlier in the Fall there had apparently been some discussion in the government about specifying some guidelines that might distinguish bids by state-owned entities from those of non-state companies.

This is a distinction that the Mongolian law has created quite explicitly. The Mongolian law outlines sectors that it applies to (the resource sector is included, naturally) and thresholds at which different kinds of reviews are triggered. A large bid by a state-owned foreign investors would thus trigger a review by parliament. This was a clause in the law that was aimed at the Chalco bid for South Gobi at least in part.

And, in a Canadian context, parliamentary review sounds like a good thing, doesn’t it? In fact, there are voices demanding just this in Canada, though I suspect that they’re not necessarily inspired by the Mongolian example.

Parliamentary review in Canada would offer transparency and would force the government to take a clear stance on a proposed sale. Whatever this decision was, any opposition to it would also want to be clear in its opposition making this decision more approachable to the Canadian public.

Is this what would happen in Mongolia? Would parliamentary review offer more transparency, a more informed and more democratic process? Sadly, I doubt it. Note that I have lots of reasons to believe in Mongolian democracy and its staying power. I continue to keep a close eye on political developments in Mongolia in part to develop a more accurate sense of the political risk involved in investing there.

Parliamentary review in Mongolia would imply a) a politicization of the decision, and b) particularly sadly, an opportunity for parliamentary corruption. Obviously, the latter fear is based on conjecture, though there is so much discussion of endemic corruption in Mongolia and many MPs are so obviously wealthy that it is difficult to dismiss this nagging fear. Note, however, that Transparency International just released its 2012 Corruption Perceptions Index and boosted Mongolia’s ranking from 120th to 94th least corrupt. This may give some cause for optimism that anti-corruption measures are building momentum and that parliamentary review may become just right as a response to foreign investment in the future.

Also, decisions on FDI in Canada would come in the context of a fairly stable regulatory regime that offers predictability and the attempt to balance investors’ expectations with Canadians’ needs. Stability in the regulatory regime has not been the strong suite of Mongolian mining regulation.

So, this is where the parallels in my eyes clearly end. Yes, similar principles, but a very different application thereof.

Mongolia as a Cautionary Tale?

Back to that hungry dragon…

S&K write that “Mongolia’s handling of the China file has been less than stellar, reflecting a deep seated ambivalence about China’s intentions combined with a rise of resource nationalism”.

Resource nationalism has been written about a fair bit in the Mongolian context. This is generally equated with some evil movement aiming at nationalization of resource assets. Hugo Chavez is the example that everyone seems to have in mind. In Mongolia this claim is most commonly linked to the demand by some parliamentarians and parts of civil society that the Investment Agreement for the Oyu Tolgoi mine should be revisited (2011 discussion).

But one observer’s resource nationalism is another person’s attempt to preserve the resource wealth of a country and to reap its benefits for current and future generations. The former is a foreign investor, while the latter is a Mongolian.

I would be the first to agree that the process by which Mongolian policy-makers have arrived at some decisions has not always been ideal (in the sense of a careful decision that is based on a thorough and dispassionate analysis of available information) – in fact, this process has been awful at times – but I cannot fault Mongolians or their leaders for their desire to get this decision “right” and their fears of getting it “wrong”.

Striking the appropriate balance between material needs, social aspirations, environmental and cultural protection, and, yes, financial rewards for investors, is not an easy decision. Jurisdictions in North America that have had decades to arrive at appropriate mechanisms for this decision, are still struggling with these issues.

Yes, there is a deep-seated ambivalence about Chinese investments in Mongolia (but also in parts of Canada). This ambivalence includes fairly rational fears of economic dominance (hey, even the Conservative government in Canada is looking to diversify beyond economic dependence on the U.S.), but also elements of anti-Chinese sentiments. Fellow “Mongolia Today” blogger Mendee has written about the latter aspect in his MAAPPS Master’s thesis. Another fellow blogger, Brandon Miliate, is currently completing his MAAPPS thesis examining the options that Mongolia might have in its foreign policy.

S&K write that Mongolia “has been reluctant to allow Chinese ownership of mineral resources. Its efforts to block Chinese ownership of resources, however, have impacted all foreign investors, raised uncertainty and potentially led to an overall decline in foreign investment.” This is a topic that Mendee and I have both taken up in the past:

The part of S&K’s statement that I find easiest to agree to is raised uncertainty. There’s no doubt that this is the case. Surely, this has also scared off some investors or made investments dearer. But have enough investors been scared to have an impact on Mongolia? Is the OT mine not such a gigantic project in a resource-hungry world that scaring off some investors might not have a negative impact.

Sure, there is a line where all investors might be scared, but I don’t think that Mongolia has come close to that line. Witness the Chinggis Bond sale last week, raising $1.5b, but attracting orders for ten times that amount. Yes, Mongolia with its BB- S&P rating is paying 5 1/8% on these bonds, but that’s cheaper credit than Italy has been able to get recently, so not too many bond investors seem scared off. In the end, there are so many investors in the world who have read the news that Mongolia was the fastest growing economy in 2011 and who want to participate in this presumed bonanza, that there doesn’t seem to be a shortage of investors, even without any large-scale Chinese investment.

Back to S&K: Yes, Chalco got scared off by the foreign investment law. But that, presumably, was the point. Also, it is very clear that something went seriously wrong in this Chalco bid for South Gobi. Who in their right mind, especially if they had any experience in Mongolia, would announce such a bid without consulting the government extensively? There’s no indication that such consultation occurred. This smacks of hubris on part of South Gobi, or Chalco.

If you’re inclined toward conspiracy theories (as many Mongolians and the Mongolian press seem to be), the most logical explanation of this Chalco bid announcement is one that sees Rio Tinto behind this announcement with a deliberate attempt to drive down South Gobi shareholder Turquoise Hill Resources’ stock price as RT is purchasing Turquoise Hill.

Did South Gobi cease production because of the failed bid? Yes, in the sense that Chalco would have operated the mine, presumably, if the purchase had gone through, but note that it is South Gobi’s coal price (and ultimately its production costs coupled with shrinking demand in China) that has sunk that particular ship. The Chinese ambassador to Mongolia agreed that it is a lack of price competitiveness that has reduced coal exports to China in a recent interview.

Note also that South Gobi is now under some kind of investigation by Mongolian authorities that has stranded an Australian lawyer in Ulaanbaatar for some weeks. Most reporting on this case is focused – once again – on “resource nationalism”, but note that the entire executive team of South Gobi has been fired over the summer one by one and their mine has ceased production. Again, without giving in to temptations of seeing conspiracies, could it not be that there really is something to investigate there?

S&K: “The slowdown in foreign investment has reduced Mongolian government revenue, lowered the credit rating and stock prices of companies working in Mongolia, and slowed ambitious development plans for both mines and critical infrastructure projects.” All true. But if a country is so dependent on mining for its future, is that not a reasonable cost to pay for a more careful (if not always carefully executed, and sometimes even recklessly so) deliberation?

After all, the natural resources in question are unlikely to vanish in Mongolia or in Canada and nor is demand for them, at least in the near or medium-term future.

Of course, S&K and I can only speak in hypotheticals when it comes to considering the impact of legislative changes on investment volume. Any empirical evidence on this would have to analyze a large number of countries in a great variety of different contexts.

It is important to note, however, that foreign direct investment seems to be somewhat of an example of herd behaviour, especially in the mining industry. The perception of political risk might thus be more important in some circumstances than the actual risk. This is certainly more the case for a place like Mongolia where much of the information (including this discussion) is about perception rather than a measured empirical reality.

Conclusions

My understanding of the Canadian oil & gas sector and its regulation or of the Canada Investment Act is too limited to take my slightly different (from S&K) perception of Mongolian developments as a basis for recommendations on the Canadian situation. However, I don’t think that it is an accident that resource-rich countries, whether they are advanced industrialized countries like Canada or Australia, as well as developing and just-on-the-verge-of-booming countries like Mongolia are grappling with similar challenges and are doing so in the context of democratic discourse.

When members of the mining industry in these advanced industrialized countries complain about governance and regulatory uncertainty in places like Mongolia, they would do well to note shared challenges and some of the parallels in the solutions that policy-makers hit upon. With this, I do not have S&K in mind who have offered some thoughtful observations and have taken a well-informed position on the particular challenges facing Canada and Mongolia.

Posted in Business, Canada, Economics, Foreign Investment, Governance, International Relations, JD Mining Governance, Mining, Mongolia and ..., Oyu Tolgoi | Tagged | 7 Comments

Corruption in Mongolia according to Transparency International

Posted on December 5, 2012 by JDierkes

Corruption is one of the most prominent features cited in any overview of Mongolian politics, political risk, human development or investment potential. Yet, any hard evidence on the prevalence, extent and mechanisms of corruption are very hard to come by. One of the most internationally visible single piece of evidence in this regard is Transparency International‘s Corruption Perception Index. The 2012 iteration was released on Dec 5, 2012 and below I take a look at Mongolia’s ranking in and of itself and relative to other countries.

Methodological Note

First a few words on the Corruption Perception Index. First of all and very importantly, this is an index of the perception of corruption, not of corruption itself. Presumably this perception correlates highly with actual corruption, but perhaps perception is liable to change more quickly than actual practices, or may lag practices in some circumstances.

Secondly, as the CPI measures perception, it is survey-based and thus subject to the challenges that all surveys face in terms of the recruitment and representativeness of respondents, the translation of words and concepts across languages, etc. These challenges are more severe in a place like Mongolia where we can’t compare any survey data with some general social survey that would give us a better handle on population composition and demographic variables beyond what is offered in the census. This is a challenge that was laid bare in polling in advance of the 2012 parliamentary election, for example.

Importantly, the CPI is a composite index, i.e. it relies on scores/results of a number of other indicators. Beyond that it is actually somewhat difficult to figure out what exactly is going on in the calculation of the Index. The part that I haven’t quite figured out is how much of a judgement by individuals is involved as opposed to a purely mathematical process of aggregating and standardizing other indicators.

One the one hand, TI mentions the involvement of experts in various methodology notes, on the other hand, the Index is clearly described as an “aggregate index, which draws on relevant questions from a number of different data sources that capture business and expert views” (CPI Updated Methodology 2012).

As far as I can figure the methodology notes out, the basis steps in compiling the index are:

  1. selecting data sources according to four criteria: quantifies perception of corruption in public service, valid methodology, credible source, sufficient variation in scores
  2. standardise date sources to 0-100 scale with mean around 45 and SD around 20.
  3. average scores across sources (minimum 3)
  4. report standard error and confidence interval.

According to the Mongolia country page, the sources of information for Mongolia are:

  1. Control of Corruption: WorldBank (2010)
  2. Global Corruption Barometer: TI (2010)
  3. Open Budget Index: International Budget Partnership (2010)
  4. Global Competitiveness Index: IMD (2011-12)
  5. Judicial Independence: World Economic Forum (2011-12)
  6. Human Development Index: UNDP (2011)
  7. Rule of Law: WorldBank (2010)
  8. Press Freedom Index: Reporters Without Borders (2011-12)
  9. Voice & Accountability: WorldBank (2010)

Sources that are not available for Mongolia:

  1. OECD Anti-Bribery Convention [only OECD countries?]
  2. Bribe Payers Index [only “world’s wealthiest and most  economically influential countries”]
  3. Financial Secrecy Index

I am a little puzzled by the listing of sources in that none of the more recent scores (I can’t imagine that 2010 sources are driving the 2012 leap for Mongolia) are particularly positive. Since my conclusion now is that the CPI does not seem to involve any judgements by TI independent of the scores from sources, I’m not sure how this score for Mongolia comes about when I look at the components.

Ranking Mongolia

The biggest news is clearly that Mongolia has jumped from 120th to 94th least corrupt country or, alternatively from 62nd to 80th most corrupt.

TI explicitly warns that the methodology for the 2012 version has changed making year-over-year comparison impossible, though the change was in part motivated by the desire to make such comparisons possible in the future.

Mongolia received a score of 36 out of 100 (100 representing no perception of corruption at all). This compares to an average of just under 44 for all 174 countries ranked. The number of sources used in the calculation of Mongolia compares well with OECD and many other countries.

Among the 28 countries included in the Asia Pacific group, Mongolia ranks right in the middle at 14.

Among all 174 countries, Mongolia has an identical score as Benin, Colombia, Djibouti, Greece, India, Moldova, and Senegal. I know very little about most of these countries, but an identical ranking to an EU member country (Greece) and a gigantic Asian democracy (India) is surely not something to be ashamed of.

If we look at post state-socialist countries in the listing, Mongolia sits right in the middle, below European post-Soviet and Eastern European countries (the Baltics, Poland, Hungary, Czech Republic, Slovakia, Romania, Macedonia, Bosnia and Herzegovina, Bulgaria, Montenegro, Moldova), but ahead of other Asian and some European countries (Armenia, Kosovo, Albania, Belarus, Vietnam, Kazakhstan, Russia, Azerbaijan, Ukraine, Kyrgyzstan, Cambodia, Tajikistan, Laos, Turkmenistan, Uzbekistan. Perhaps most notable is the significantly better score for Mongolia than any of the Central Asian countries even though some of the starting point for development in 1990 may have been comparable (though minus the Soviet Republic status, and plus democracy for Mongolia).

I was also trying to group the TI-ranked countries by those that are significant mining jurisdictions, but found no single listing of such jurisdictions on-line. The challenge would be to come up with a metric that would include a country like Canada with a long-established and large mineral sector, and also Mongolia where the volume is small, but the potential is huge.

In any case, eyeballing some countries with prominent mineral sectors (not oil and gas) would put established producers like Canada, Australia, US, Chile ranked highly, but also Botswana, Namibia, Brazil, South Africa. Mongolia would then be somewhat similar among mining countries to Peru, Mexico and the Philippines, but much less corrupt than Indonesia, Kazakhstan, Russia, Nigeria and Venezuela.

Explaining Mongolia

Let’s assume for the moment (and I am happy to make this assumption having looked at the documentation) that the CPI produces reliable information and that the ranking of countries relative to one another is meaningful. This assumption begs the question of what happened in Mongolia in the past 12 months that would lead to such a significant jump. Fortunately, I had a chance to discuss this with PoliSci PhD student Mendee this morning to get a better sense of likely developments.

Remembering that the CPI is a Corruption Perception Index the best explanation for Mongolia’s jump would be to focus on the momentum (Mendee’s suggestion) that has been building around anti-corruption activities in Mongolia. Corruption has been very much in the news this year with the most internationally visible instances being the arrest and trial of former president Enkhbayar and the current detention of Australian lawyer Sarah Armstrong. But there has been much more than this going on that has been much more visible domestically with investigations of several aimag governors, a tightening of income reporting requirements for public and elected officials, etc.

Public perception of anti-corruption activities given a high level of underlying corruption (this is assumed to be the case for Mongolia where people (Mongolian and non-Mongolian) speak of corruption as “endemic”) could be either, “OMG, what a cesspool, corruption is everywhere” (perception as more corrupt than expected), or “Yes, corruption is everywhere, but things are getting better”. Clearly, the second view must have predominated in the sources used by TI.

What makes this explanation of building momentum plausible is that corruption and related topics like conflict-of-interest have become better defined over the past several years in Mongolia. There has been a fair bit of legislative activity that makes some of the principles behind corruption as well as specific definition clearer to all involved so that discussions now are less about the principle than about specifics.

These legal definitions and some initiatives at enforcement may then be acting in two ways, a) by building awareness, and b) by providing a deterrent to potentially corrupt officials.

News Events that may have contributed to perception of more stringent anti-corruption efforts

Obviously, news events relating to corruption have a great potential to change perceptions. When I exchanged tweets with Enkhbold Z, chairman of the Mongolian parliament, he agreed that “yes, I was expecting some improvement. I think creation of ACA [Anti-Corruption Agency], Elbegdorj election [for president 2009], of course Enkhbayar case contributed to this”. While their impact would be most likely on 2013 or even 2014 surveys, some of the 2012 events might have been:

  • Arrest and trial of former president Enkhbayar. Contrary to the expectations of Doug Schoen and other participants in an international media campaign apparently orchestrated by Enkhbayar, this did not spell the end of Mongolian democracy, but instead signaled the seriousness of anti-corruption efforts. The Anti-Corruption Agency was very visible in this process, though also accused of being political motivated.
  • Tightening and tighter enforcement of election regulations around the June parliamentary election. This included the prosecution of some winning candidates for electoral fraud.
  • New Minister of Justice Temujin has obviously gained some prominence in terms of judicial reforms which is in part an anti-corruption effort as well.
  • While investigations of mining companies, including South Gobi are primarily viewed as being motivated by political/corruption revenge or “resource nationalism” by foreign investors, these may be signalling powerfully to a domestic audience that anti-corruption efforts are being bolstered.

Caveat: A Secular Trend in Rankings of Mongolia

One alternative explanation to this positive sense of building momentum would be that the information used by TI has simply gotten better. This is not implausible in that more attention is being paid to Mongolia from many directions so that more information is becoming available. There may thus be a secular trend in part associated with the status of having the highest GDP growth in 2011 that would lead to a rise in these kind of index scores for Mongolia.

Conclusions

It has been over a year since the Luis Vuitton boutique was established in Ulaanbaatar. It appears to be economically viable. This alone suggests rampant corruption in a country with very few domestic industrial activities (as of yet) and a significant proportion of the country living in poverty. Perhaps this should be an indicator used by TI for their Corruption Perception Index, but maybe not as it would paint as negative a picture of the country as the ownership of the only Rolls Royce by a minister would. The picture suggested by the CPI is more positive.

The bottom line thus could be, corruption is rampant in Mongolia, but anti-corruption efforts have been stepped up significantly, so a decline of corruption can be reasonably expected in coming years.

Posted in Business, Civil Society, Corruption, Foreign Investment, JD Mining Governance, Mongolia and ... | Tagged | 8 Comments

New Book: A History of Land Use in Mongolia: The Thirteenth Century to the Present

Posted on December 3, 2012 by JDierkes

Elizabeth Endicott

A History of Land Use in Mongolia: the Thirteenth Century to the Present

Palgrave/Macmillan, November 2012.

While modern Mongolia has attracted much attention from political scientists and economists seeking to explain the rapid changes that have occurred since the end of state socialism (1921-1990) and the advent of the free market democratic era (1990 – present), far less attention has been directed to core issues of land use in a country that supports a pastoral nomadic population.  A History of Land Use in Mongolia: the Thirteenth Century to the Present examines conceptual and practical issues of land use in historical terms.  For instance, to what degree over the centuries have external forms of authority – secular and religious – shaped herders’ relationships to the pasturelands that are crucial to their livelihoods?  What sorts of strategies in dealing with authority – confrontation, avoidance, flexibility – have Mongolia’s pastoral nomadic herders relied upon?  From a historian’s perspective, the current ways in which Mongolia’s herders have adapted to a new economic/political system are best fathomed by understanding how herders have adapted in previous historical regimes dating back to the thirteenth century.

The text of the book is accompanied by several of the author’s photographs.  Among these, for instance, are photos of winter/spring livestock shelters.  These shelters and their surrounding pasturelands represent a key area in which evolving land legislation and local practices intersect in today’s Mongolia.  Since summer and fall pastureland is by law open to common use and unrestricted by any form of land deed, the winter and spring livestock shelters point to new concepts of land leasing and ownership in a countryside largely devoid of fencing.

In the course of the book, Mongolian government policies vis-à-vis pastoral nomadic production are compared with Chinese government policies in ethnically Tibetan and Mongolian regions within the PRC.  Challenges faced by Mongolia’s herding population are also compared and contrasted with those faced by herders in neighboring Kazakhstan.

About the Author

Elizabeth Endicott is a professor emerita of History at Middlebury College in Vermont. She is the author of Mongolian Rule in China: Local Administration in the Yuan Dynasty and Pages from the Past: the 1910 Moscow Trade Expedition to Mongolia.

Posted in Grassland, Nomadism, Publications, Research on Mongolia | Tagged | Leave a comment

2012 Local Election Final Results

Posted on December 3, 2012 by D.Byambajav

The General Election Commission announced today the official results of local elections. In the run-off elections in six capital city districts, the Democratic Party (DP) won in 4 districts and the Mongolian People’s Party (MPP) won in 2 districts. Overall, the DP won in 12 provinces and 5 districts and the MPP won in 9 provinces and 4 districts. Below, the 2012 election results are compared with the corresponding elections in 2008.

Posted in Elections, Politics | Tagged | 1 Comment

2012 Local Elections and Parliamentary Runoffs

Posted on November 29, 2012 by mendee

Although the General Election Commission hasn’t announced the official results of local elections, the two major political parties have already accepted the election results and have begun preparing for the run-off elections in five capital city districts where the voter turnout was under the 50 percent threshold. [The runoff election is scheduled on November 30, 2012.]

The Democratic Party (DP) won in 12 provinces and 7 districts of the capital city and the Mongolian People’s Party (MPP) in 9 provinces and 2 districts. According to the General Election Commission, the DP won 379 seats, the MPP 334, the other parties 23, and independent runners 6 of the total seats of provincial Citizens’ Representative Khurals (link). This means that two major parties will establish the Citizens’ Representative Khurals at the provincial and county level in coming weeks and nominate their party officials for the posts of provincial and county governors – the most important positions in local politics. In fact, some analysts argue that a party’s influence at the local levels and especially the strength of their on-the-ground organization, has been an influential factor in parliamentary and presidential elections.  In the past, the MPP has been dominated in the local politics partly with its strong network that it inherited from the one-party era.  In addition to the capital city’s Citizen’s Representative Khural and Mayor, victories in 12 provinces demonstrate the DP’s strength and influence.

At the same time, the local elections highlight the weaknesses of smaller parties that lack local network and resources.  For small parties, the likelihood of gaining some role in the local elections is low in the absence of further disintegration of the two major political parties as happened prior to the parliamentary election in 2012.

Along with local elections, the runoff for the parliamentary election in Ulaanbaatar’s Bayanzurkh district ended with the victory of former MP Arvin (MPP).  According to the speaker, five new MPs are planning to sworn-in.  Ms. Sarangel (MPP) will fill in the seat vacated by MP Khurelsukh (both nominated by the party list).  Mr. Oyunbaatar (MPRP), whose sworn-in ceremony had been postponed in connection with former President Enkhbayar’s trial, will fill the seat of the MPRP party list.  Two DP members, Batkhuu and Zorigt, are cleared to become members after the disputed election in Uvurkhangai Province in according the General Election Commission, but the MPP still objects their sworn-in ceremony.  Their earlier sworn-in ceremony was delayed by the MPP’s “sofa boycott” which blocked the entrance of the parliament because the MPP nominees in Uvurkhangai Province appealed the initial court decision.  Since the Supreme Court hasn’t decided on the appeal of the MPP nominees, the MPP continue to object the General Election Commission decisions in regards with two DP members.

At the same time, the investigation of two current MPs of Uvs province (both MPP members) on violations of the election law (i.e., cash transfer) is ongoing and the DP majority parliament has still delayed the recognition of the MPP’s parliamentary group.  Without  parliamentary group status, the MPP will not have much say on upcoming bills, one of which will be the changes to the Presidential Election.

There wasn’t much debate nor allegations about new voting machines or citizens’ biometric IDs during this local elections. This will enable to organize the parliamentary and local elections simultaneously starting from 2016 – as decided in the revised Election Law.

Posted in Democracy, Democratic Party, Elections, Local Elections 2012, Mongolian People's Party, Party Politics, Politics | Tagged | Leave a comment

Working Paper on Human Security of Mongolia

Posted on November 21, 2012 by mendee

I am posting the abstract and link of my recent paper, “Unkept Human Security Promises in Developing Countries: A Case of Mongolia,” which is published as a working paper series of the Central Asian Program.  There are many weaknesses in the paper, and, I am really looking forward to any comments and criticisms.

Here is the link and following is the abstract.

Human security challenges in developing nations attract little attention when the latter are not experiencing armed conflicts. In spite of declarations and good intentions to improve human security, populations in developing countries remain vulnerable to both non-systematic violence and non-violent human security threats such as poverty, disease, and disasters. Non-conflict related human security is often worsened by three main factors: 1) the unprecedented difficulties of political and economic transitions in post-Communist Eurasia; 2) nation-specific geographic and ecological features; and 3) the ineffectiveness of the state to deliver security, social justice, and sustainable development. Mongolia is an excellent case study to understand the unkept human security promises of the developing world as it represents a new democracy, a landlocked state with specific geographic and ecological constraints, and ineffective state bodies unable to manage their limited resources.

Posted in International Relations, Politics, Publications, Research on Mongolia | Tagged | Leave a comment

2012 local elections: pre-election observation and analysis

Posted on November 19, 2012 by D.Byambajav

A record high over 19,000 candidates will run for the upcoming local elections slated for November 21 (A festival of democracy!). Seven political parties, two coalitions, and 893 independents will compete for the 8108 seats of Citizens’ Representative Khurals of aimags (provinces, 745 seats) and soums (counties, 7068 seats) and districts of Ulaanbaatar (295 seats). Two weeks of election campaigning have ended and Mongolians will vote for their local representatives tomorrow.

Voter turnout for the parliamentary election in June 2012 hit a record low of 65%, declining nearly 10% from the previous election. Voter turnout for local elections has been lower than parliamentary elections and it was 66% in 2008. Considering the low turnout in June we may see a number of run-off elections in Ulaanbaatar where voter turnout has been significantly lower than provinces. The festival needs more visitors and judges.

This year’s election differs from previous elections in several ways.

First, one reason of why the local elections attract much attention from political parties and independent candidates might be the new budget law. The law provides more opportunities for local governments to accumulate and spend local revenues as an effort to diffuse over-centralization. From next year, local governors, for example, will have more authority on local budget planning and spending.

Second, the new local election law was adopted by parliament. It introduced a number of important changes and innovations. Like the new parliamentary election system, the local elections will be organized under a mixed electoral system. One third of the members of the Citizens’ Representatives Khurals will be nominated from the political party list while the remaining two third will be elected through the majoritarian system. A similar mixed electoral system was used in the 1996 local elections, but a majoritarian system had been applied since 2000. This new system will likely to allow smaller political parties to have more representation than a majoritarian electoral system. Moreover, the local elections will use electronic counting, new personal identification cards, and biometrics to identify and check registered voters. In addition, political parties were required to follow a 30% gender quota when they nominated their candidates. More women are expected to enter local Khurals and acquire local government posts.

The result of the 2012 parliamentary election left the ruling Democratic Party and the opposition Mongolian People’s Party in a political situation in which either needs big win in local elections. The DP needs to have local institutional channels that would allow smooth and effective policy implementation. One obstacle of the DP’s policy effectiveness during 1996-2000 when the party led the government could be that the MPP controlled much of the local government. For individual members of parliaments it is also necessary to have local institutional bases via inserting own representations in local government institutions.

The opposition Mongolian People’s Party (MPP) faces much tougher test at the local elections. Since the inception of local elections in 1992, the MPP has been the majority party in most provinces and districts of Ulaanbaatar. In particular, since 2000 when the MPP became the absolute majority in parliament it could significantly cement its local dominance. Of 693 seats of Citizens’ Representatives Khurals of provinces and Ulaanbaatar the MPP won 569 seats or 82% of all seats in 2000. Since then the MPP has maintained its dominance (Table 1). Although the MPP’s number of seats in the Citizens’ Representatives Khurals decreased in 2004 (64%) and 2008 (62%), it still controlled the majority of provinces and Ulaanbaatar. Of 21 provinces, the MPP was the majority party in 17 provinces (See, Table 2). Moreover, the MPP controlled all districts (duureg) and satellite cities of Ulaanbaatar except the Khan-Uul district where the DP constituted the majority.

However, the MPP’s strength and confidence in local elections has ebbed since the election of the City Council or the Ulaanbaatar city’s Citizens’ Representatives Khural in June 2012, which was held simultaneously with the parliamentary election. The MPP had continuously dominated the City Council. Most recently, the MPP held 36 seats of the City Council’s 45 seats in the period between 2008 and 2012. So, it was a devastating result for the MPP to lose the control over the City Council this year. The DP won big in Ulaanbaatar in June in both the parliamentary and City Council’s elections. The DP’s successful campaign led by its preeminent leader Erdeniin Bat-Uul earned them 26 seats, enabling the DP to govern the Ulaanbaatar city the first time. Except two run-off elections in which at least one MPP candidate will be elected to parliament, the MPP has not won a seat in parliament from Ulaanbaatar.

The new local election law requires that the elections should be held on Wednesday of the fourth week of November. Unlike previous local elections that held in the early-October, the new law has provided a longer period or broader opportunity for the ruling party and coalition to formulate their policy and implement concrete programs that would gain them public support. During the last three months the new governor of Ulaanbaatar city E.Bat-Uul and his administration gained much support for their quick action to tackle with traffic jams, to improve public transportation, and to suspend illegal construction works and land ownership. Moreover, Prime Minister Norovyn Altankhuyag’s new initiative to reduce the price of coal for Ulaanbaatar’s ger district residents has seemed to be widely appreciated, adding strength to the DP’s campaign in the city. Thus, the MPP will have tough test in Ulaanbaatar and might lose their dominance in most districts.

It seems that the MPP has expended much effort in provinces and soums (districts). In the system of the MPP, the work of local party leaders or the governors of aimags have often been a step towards preparing to run in parliamentary elections. In provinces and soums, the party has had a well-functioning network of election mobilization comprising a large number of local government officials, local business connections, and party members. The vertical relations between the central and local units of the MPP are well institutionalized and there have been little local resistance to the elites at the top. A number of leading MPP members moved from Ulaanbaatar to provinces like Umnugovi to run for the local elections.

However, the MPP has some challenges there, as well. First, like the last parliamentary election in June, the Mongolian-People’s Revolutionary Party (MPRP) will be an annoying contender and will likely to attract some voters from the MPP. Even though the MPRP is in the coalition government, the party runs for the local elections independently. But in some electoral districts the MPRP is in coalition with the Mongolian National Democratic Party (MNDP) or with the Civil-Will and Green Party (CWGP). Second, over ten aimag governors who are all MPP members have been investigated by the Independent Agency against Corruption during the last couple of years, apparently humiliating the public image of their party. Third, the MPP did not propose an alternative, catching manifesto or policy priorities. The party’s electoral campaign largely focused on the critique of the ruling coalition, sending a message that the MPP will constrain and resist the unlimited power of the rulers. This might not be a good strategy and would not bring more seats for the party. According social media sources, there have already been open discussions within the party about a looming crisis of leadership and policy innovations in the party. If the MPP loses in the local elections it may prompt to a major intra-party reform or reshuffle in the party.

Meanwhile, the DP insists on the effective implementation of the coalition government’s program and asks the electorate to help them to increase their representation in local governments. While the DP may win big in Ulaanbaatar, it will likely to be difficult for them to have a massive victory in provinces. The defeat in the local elections would give the DP much-needed institutional infrastructure that could help the government policy to be implemented smoothly. It is also an opportunity to strengthen local party organizations, which is same for other smaller parties, as well.

See posts earlier this year for analysis of the June parliamentary election.

Posted in Democracy, Elections, Politics | Tagged | 11 Comments

Book Chapter: Introduction to Change in Democratic Mongolia

Posted on November 13, 2012 by JDierkes

Research on Contemporary Mongolia

Julian Dierkes in J. Dierkes, ed. Change in Democratic Mongolia – Social Relations, Health, Mobile Pastoralism, and Mining Leiden: Brill, 1-13.

Brill: Change in Democratic MongoliaIn my introduction, I document the origins of the volume in a conference I organized through the University of British Columbia Program on Inner Asia to commemorate the 35th anniversary of diplomatic relations between Canada and Mongolia.

One of the aspects of the conference that was a grand success and laid the foundation for the present volume was its inclusiveness in terms of topics addressed across the social sciences and origins of the authors from Asia, Europe and North America.

In the preparation I had selected eight focus areas that seemed to host particularly vibrant communities of researchers focused on contemporary Mongolia: 1. pastoralism, 2. ecosystems, 3. mining, 4. religion, 5. education, 6. politics and international relations, 7. health, and 8. transition studies. The papers collected in this volume represent a cross-section of works across these areas.

The introductory chapter situates these chapters within their larger academic context, provides an overview over the volume, and a brief synopsis of the historical background of Mongolian development that provides the backdrop for all the contributions to the book.

Posted in Book: Change in Democratic Mongolia, Research on Mongolia | Tagged | 1 Comment

Guest Post: Southern Gobi Water Shortage

Posted on November 4, 2012 by JDierkes

Guest Post by Michelle Tolson

Looking Past Oyu Tolgoi to the Southern Gobi’s Water Shortage

Of late, Mongolian media has been obsessively focusing on the investment agreement between Oyu Tolgoi and the Mongolian government.  Little attention is paid to the effect that the mine is having on locals in Omnogovi region, for good or ill.  Foreign media also seems to largely focus on the investment aspect of Oyu Tolgoi, monitoring how this affects other foreign investment opportunities.  Few foreign media publications delve into the environmental impact and the effect on herders in the region, but when they do, like Mongolian media, they scrutinize Oyu Tolgoi rather than Tavan Tolgoi and the mining situation overall.  Though negative articles about Oyu Tolgoi seem to dominate local media, Tavan Tolgoi has escaped this scrutiny relatively unscathed.

The World Bank published a water assessment in 2010 which provided a breakdown of the mining industry’s impact on water resources in the Southern Gobi Region, using data from the Dundgovi, Dornogivi, and Omnogovi.  The report listed the livestock population and their water use contrasted with mining operations’ water use in relation to known water sources.  The situation is potentially dire—mentioned discretely in one paragraph on p. 35—that the current water resources in the Southern Gobi region have an expected life span of 10-12 years, taking into consideration the abundant mining licenses, growing population and limited current knowledge of water resources in the area.  For example in 2005, water use was estimated at 85,000 meters cubed (m3)/day but in 2020 it could rise to 425,000. The water usage for people (rural and urban) is estimated at 10,000 cubic meters per day (m3/day)—a relatively small amount. Taking into consideration the livestock of the region, the usage increases.  The study estimated that the entire region has approximately 3.8 million head of livestock comprised of 120,000 camels, 260,000 horses, 100,000 cows, and 3.4 million sheep and goats. Camels consume an estimated average of 45 liters of water a day, while horses consume 35 L/day, cows 35 L/day and sheep-goats consume 4 L/day. This comes to a total of 31,600 cubed meters a day for the combined total of livestock in the Southern Gobo region.  However, the two main mining sites’ water use (and this would represent the construction phase) is each double the amount of all the livestock on the three Gobi aimags. The World Bank report found Tavan Tolgoi topped the charts at 76,000 meters cubed (m3) of daily water usage for 2010 taken from groundwater resources, while Oyu Tolgoi used 67,000 cubed meters taken from ground water resources. There are also several smaller mines gearing up which will further impact the situation.

Similar to Ulaanbaatar, the soums and aimags in the Southern Gobi region have experienced a population boom, stressing limited infrastructure.  The World Bank report notes population growth in the Dornogovi and Omnogovi provinces “has followed the national trend. Between 1985 and 2004, the human population in 13 soums of these two aimags increased 53 percent, from 41,072 to 62,735 persons.”  Most soums in the Southern Gobi region utilize water kiosks, much as ger districts dwellers do in Ulaanbaatar.

This migration has been influenced by the climatic changes which have been making the herding livelihood more difficult.  The UNDP action plan report for 2012-2016 noted the extreme environmental degradation on the steppes caused from overgrazing and higher rates of carbon in the air from the massive livestock population which grew beyond the capacity of the land when limits on herd sizes were abolished in post Soviet years.  Overgrazing has contributed to climate changes which have resulted in lower levels of rainfall and the reduction of the grasslands.  About 70 percent of the country is experiencing desertification.  Mining meanwhile has been booming and filling in the employment gap, further drawing people to the urban areas.

The World Bank report’s intended audience was stakeholders of the government of Mongolia.  In order to learn what plans are in the works, I interviewed the Ministry of Environment and Green Development regarding a feasibility study on diverting the River Orkhon by pipeline conveyance to the Southern Gobi region.  This has largely been ignored by the media—both foreign and local—but has been picked up by environmental NGOs and those advocating for herders’ rights such as OT Watch.  OT Watch has ironically linked the river diversion initiative to the Oyu Tolgoi mine, though the company does not wish to participate in this method, preferring to utilize a saline aquifer treated with a water purifier to supply the water needs for both mining and their staff.  Though the feasibility study is still being conducted on the river diversion project, the Ministry said the project “urgently” needed to be implemented for those living in the growing soums and aimags, including the herders.  They see this as a renewable resource.  The Herlen River, which was also part of the feasibility study, will not be utilized, but the Orkhon River is slated to be, according the Ministry.  Mark Newby, the Water Resources Principal Advisor to Oyu Tolgoi, said the company is using their technology to find additional underground water resources to addressing the growing needs of the nearby soums and aimags, which are expected to expand in population when the mine becomes operational.  However, Oyu Tolgoi’s water explorations have been viewed with mistrust according to Sara Jackson, who has conducted focus groups with the herders in the South Gobi for the past few summers as part of her PhD dissertation research on how herders are impacted by the mining boom.  She previously wrote a brief guest post on this blog about the neglected needs of the herders.   By Skype interview she told me that herders view Oyu Tolgoi’s further water explorations as proof that the company does “not even know where their water is coming from.”

The Tavan Tolgoi operation does not have a saline aquifer with a water purifier at its disposal and has limited water resource options.  There is only a nearby fresh water lake, known as Balgas or the river diversion project to cover the mining needs and those of its workers.  A previous story published by the UB Post— “Balgas Lake’s Limited Lifespan,” printed edition June 1, 2012—noted the lake, if used as a water source, would only last until 2020. According to the Ministry of Environment, the Lake Balgas issue is still being discussed and unfortunately is still a possibility—initially at least—until other sources for water are located but is not intended to be a long term solution. However, the river diversion project is still being researched and could take some time.

The recent conference in mid-October titled “Mining and Human Rights” illustrated the conflict in needs between locals in the Gobi and the needs of the rest of the nation.  A panel spoke on the problems in mining, which consisted of S. Oyun, the Minister of Environment and Green Development, Chandmani Dagva, Governor of the Dundgovi, a representative of the Special Inspection Agency and Mr. Ganbold Duvchigdamba, former herder and famous environmental activist.  The audience took part and asked questions.  Many herders came up.  One herder said he represented 4,000 people in his soum and he asked how they were supposed to live with five mines.  There were four already and another was set to go operational.  In contrast, the governor of the Dundgovi spoke of his inability to regulate the number of mining licenses issued and how his aimag had been covered up to 50 percent by mining licenses at one time which had been reducing over time through hard work.  He said what he saw that the local governments’ main problem was a lack of power, as the central government made the decision to issue mining licenses.

The true heart of the debate on mining seems to rest on the development needs the country versus the needs of the herders and locals in the Gobi.  The overall population of the Southern Gobi region is listed is at just 150,000 by the World Bank report, compared to the rest of the nation.  With the central government’s focus on the returns from mining, this conflict looks likely to continue but by looking past a foreign company as the source of the problem and looking at the bigger picture—which is the limited water resources , hopefully this critical issue can be addressed with the help of foreign companies’ technology.  The World Bank report noted that most present day water surveys are being carried out by foreign companies and researchers given the limited technology of the government.

About Michelle Tolson

Michelle Tolson, MSc, studied community development at the London School of Economics and Political Science and brings a background in gender with a human rights frame work to her writing. She has worked on research projects in New York City and Cambodia.  As a journalist, she has contributed to the Phnom Penh Post (Cambodia), Women’s International Perspective (U.S.), the Global Post (U.S.), Women’s News Network (U.S.), Women’s Media Center (U.S.) and the UB Post of Mongol News Group (Mongolia).

Posted in Environment, Environment, Michelle Tolson, Mining, Oyu Tolgoi, Water | Tagged | 3 Comments

Asia Pacific Foundation of Canada: ‘Five Minutes With’ on Mongolia

Posted on October 29, 2012 by mendee

Following a “Brown Bag” talk on “Mongolian Parliamentary Election” at the Asia Pacific Foundation of Canada on August 15, we had a chance to appear on their first “Five Minutes With” interview.  With the persmission of the Asia Pacific Foundation of Canada, we’re posting the brief interview.

How did Mongolia’s recent election differ from past elections?

This year’s election differs from past elections in several ways. First, the introduction of a mixed electoral system provides greater opportunities for smaller parties. Mongolia has a unicameral parliament with 76 members, and under the new system, 28 members were nominated from the political party lists while the other 48 were elected through the majoritarian system. As a result, the two major political parties are now more vulnerable than before. Second, a gender quota was introduced for the first time. The new parliament now has 9 female members, who have now formed the first-ever women caucus – aimed at advancing political gender equality. Third, the new parliament has more representatives from civil society organizations. Finally, there were number of innovations introduced in the elections – the implementation of new technologies (biometrics, electronic counting), the inclusion of diaspora voting, conducting parliamentary and local elections (esp., of the capital city) simultaneously, and increasing role of judicial institutions, anti-corruption agency, and police in screening candidates. These changes have meant that unless one of two major parties explicitly fails or succeeds to run the government, chances for overwhelming majority by one political party is unlikely. Furthermore, all parties avoided inciting violence, unlike from the past two elections. This can be attributed to limiting participation of the political parties in organization elections and increased security from police personnel.

How has the government responded to public opinion on corruption?

Corruption is the most important concern for the public. Corruption was prominent in the 1990s when state institutions, especially judicial and law enforcement institutions, were weak due to political and economic transitions. As corruption became prevalent, public pressure has steadily increased since early 2000. In 2006, the parliament passed an anti-corruption law and established an independent agency to tackle corruption. Optimists would say that Mongolia has successfully institutionalized anti-corruption efforts by establishing a new legal environment, increasing investigations of public officials, and raising the deterrence for public servants to abuse their powers. Pessimists, on the other hand, would argue that Mongolia’s fight against corruption has proven fruitless so far. Moreover, politicians have started using anti-corruption rhetoric as a method to marginalize/demean their opponents and win popularity. My views are somewhere in between – the prosecution of the former President on charges of abuse of his political authority was an important step forward, but allegations are noticeably one-sided as only minority party members or affiliated officials considered are suspicious.

How does Mongolia’s mining sector factor into domestic politics?

Mongolians view the mining sector with mixed feelings. On the one hand, the mining sector can provide greater economic growth, investment, technology, infrastructure development, and employment. But, on the other hand, it poses enormous challenges for country’s pristine environment, sustainability of key resources (e.g., pastures, water), and nomadic lifestyles. For instance, major mining exploration and extraction operations are occurring in Mongolia’s Gobi area. Since these activities use extraordinary amounts of water, they resort to using up un-renewable underground water sources. What would happen to the Gobi area’s ecology, its 33 oases, and its pastures? This would certainly contribute to Mongolia’s rapid desertification and more dust storms for Northeast Asian cities like Beijing, Seoul, and Taipei. Similarly, many rivers have been exposed to mining pollutants and pastures have been destroyed by other mining activities, including artisanal mining. Increased enforcement of new legislation which prohibits mining and exploration in forestry and river basins, the introduction of new regulatory mechanisms (e.g., license issuance, closure plans), and proposed changes in mining laws are just reflections of increased public outcry against irresponsible mining.

I think this public outcry will become more vociferous because the mining sector has been identified as one of the main sources of corruption (esp., regarding licenses and violation of regulations). At the same time, some populist politicians will likely use this public outcry for their own short-term political goals.

Posted in Corruption, Elections, Environment, Mining | Tagged | Leave a comment

Foreign Investment Considerations in Canada Resemble Mongolian Law

Posted on October 24, 2012 by JDierkes

When the Mongolian parliament passed a foreign investment law somewhat hastily in May 2012, partly in response to the proposed purchase of a majority of coal miner South Gobi Resources by CHALCO, this led to a fair bit of tut-tutting in the investment community. To many investors, this seemed like a threat to their ability to cash in on investments in Mongolia that have attracted some attention with frequent headlines such as “Mongolia fastest growing economy in 2011”.

Given the  lack of liquidity and diversification beyond mining in the Mongolian economy, investments in foreign mining companies seem like the obvious way for many investors to participate in the Mongolian boom. Yet, such investments are somewhat predicated on the ability of mining companies to participate in M&A activities to cash in on the value of their resources or production capacity. The foreign investment law limits the opportunity for such activities.

When the law was passed, it already reminded me of Canadian legislation that restricts foreign ownership and thus also foreign takeovers of resource companies. Often this legislation is justified in national security terms or with reference to a need to protect “national champions” with headquarters in Canada to protect economic development from a hollowing out by foreign owners. While the Harper government was already challenged by the proposed takeover of Potash, discussions have resurfaced recently with the CNOOC bid for Nexen.

The most recent twist in these discussions (see for example the Globe & Mail on Oct 23) suggests a two-track investment review process that distinguishes between state-owned and private investors as owners of Canadian assets, presumably being more lenient in decision on private investments and more cautious with the approval of investments by state-owned (primarily, but not exclusively Chinese) entities.

That is a distinction that is quite prominent in the Mongolian investment law as well in distinguishing state-owned from private investors and requiring different review processes for these different investors.

Surely, decisions like the current discussion in Canada give a lot of legitimacy to Mongolian moves to restrict foreign investments. Those who attack Mongolian moves in this regard should consider that similar policies are deemed legitimate, at least if they’re based in Canada.

Posted in Business, Canada, Foreign Investment, Mining, Policy | Tagged | Leave a comment

Green College Eurasian States and Societies Series: Robert Bedeski “Lessons from Mongolian State Evolution”

Posted on October 23, 2012 by JDierkes

Eurasian States and Societies Series
Green College
UBC

Monday, October 29
17-18:30h
Green College Coach House
UBC Campus

Dr. Robert Bedeski

Emeritus, University of Victoria

“Lessons from Mongolian State Evolution: The Anthropocentric Theory of Human Security”

Posted in Events, Mongolia and ..., Nationalism, Politics, Research on Mongolia, UBC Mongolia Lecture Series | Tagged | Leave a comment

Book Chapter Mongolia’s Mining Controversies and the Politics of Place

Posted on October 23, 2012 by JDierkes

Mongolia’s Mining Controversies and the Politics of Place

Sarah Combellick-Bidney in J. Dierkes, ed. Change in Democratic Mongolia – Social Relations, Health, Mobile Pastoralism, and Mining Leiden: Brill.

Brill: Change in Democratic MongoliaControversies about mining are not new to Mongolia, and they are never static. There are always new turning points, and earlier controversies provide essential context for understanding current developments on the mining front. This study follows a critical juncture in the mining controversies of 2007, when negotiations on Oyu Tolgoi were stalled and newspapers and magazines covered wide-ranging debates about the role of mining in Mongolia’s future. This case study of development discourse among Mongolian politicians, NGO leaders, businessmen and scholars highlights the ways in which critics were able to erode the legitimacy of the contracts and expand the conversation to include a variety of other options. While the rhetoric of global development casts mining as a standard means of achieving economic development, domestic critics in Mongolia representing a wide range of interests engaged in the ‘politics of place’ to raise questions about the effects of ‘big mining’ on their society and their land. Both the government of Mongolia and the mining sector proved to be more susceptible to such questions than investors had predicted.

 

Posted in Book: Change in Democratic Mongolia, Development, Economics, Mining, Oyu Tolgoi, Politics, Regulation | Tagged | 1 Comment

Book Chapter: Discovering Peacekeeping as a New Mission: Mongolia

Posted on October 20, 2012 by mendee

A chapter on Mongolian peacekeeping, jointly written with Dr. Thomas Bruneau, is published in the The Routledge Handbook of Civil-Military Relations (2012).  The chapter examines Mongolia’s explicit reorientation of its military from territorial defense, although that is formally still a purpose of the armed forces, to peacekeeping operations.  Here is a quick synopsis of the chapter.

In the past two decades, Mongolian military was employed for external peacekeeping missions and domestic law enforcement as well as humanitarian missions, which were real tests for Mongolia’s fledgling democratic institutions. Mongolians have, for example, utilized the peacekeeping role in elaborating their “Third Neighbor” strategy to maintain the maximum amount of independence from their gigantic, nuclear – armed, neighbors by strengthening its ties with Western democracies. There are adjustments taking place, and a fairly wide awareness of the need for updating and adjusting the legal and institutional bases of civil-military relations.

The Mongolian case demonstrated that peacekeeping could reveal interesting dynamics of civil-military relations in a new democracy. First, in a delicate geo-strategic environment, Mongolian political leaders projected peacekeeping as a way to advance its foreign policy goals of achieving bilateral relations with the West and increasing Mongolia’s international profile. Second, peacekeeping was perceived by military leaders to justify the existence of a small military and to consolidate civil-military relations. Third, foreign military training assistance and increased engagements with Western militaries consolidated a new identity for the Mongolian military, which respects democratic civilian control and stands out as the most reformed security institution, whilst many other institutions are wrestling their past legacies and new challenges such as corruption and ineffectiveness.

Despite raising concerns in Moscow and Beijing, Mongolia’s military engagement with the West was necessary for the military to overcome transitional challenges and to adapt new Western military standards and ideas. Mongolia’s current prestige as a forthcoming troop contributor for peacekeeping missions would be impossible without the US military assistance. Without deployments to Iraq, Mongolia’s peacekeeping commitment would have waned in early 2000. The deployments to Iraq brought a momentum for Mongolian peacekeeping efforts and introduced Mongolia’s military to the UN DPKO and other institutions. While militaries are withdrawing from Afghanistan, Mongolia is increasing its contribution to both the UN and coalition missions in Afghanistan.

Over two decades, Mongolia transformed its Soviet-style military into a modern, deployable peacekeeping military. A potential road map could be developed based on Mongolia’s experience since the process occurred within the newly institutionalized framework of democratic civil-military relations. In spite of these minor (fixable) institutional lessons-unlearned, one of the best lessons learned is that the Mongolian military was kept out of politics and economics during transition. A quick consensus reached between political and military leaders on future roles of the military during the transition made them as impartial constructive actors – not destructive ones. Mongolia’s lessons may help the West recalibrate its assistance towards development of the peacekeeping capability.

 

 

 

Posted in Foreign Policy, Military, Research on Mongolia, Security Apparatus, UN | Tagged | Leave a comment

Book Chapter: Changes in Pastoral Land Use and Their Effects on Rangeland Vegetation Indices

Posted on October 18, 2012 by JDierkes

Temuulen Tsagaan Sankey, Joel Sankey, Keith Weber, and Cliff Montagne

Changes in Pastoral Land Use and Their Effects on Rangeland Vegetation Indices

in

Change in Democratic Mongolia: Social Relations, Health, Mobile Pastoralism, and Mining

Brill: Change in Democratic Mongolia

Drastic changes have occurred in Mongolia’s grazing land management over the last two decades, but their effects on rangelands are ambiguous. After the democratic changes in 1992, formerly state-owned livestock collectives were disbanded and Mongolia’s livestock population was privatized. There was no longer a state institution to formally regulate pasture use and herders became responsible for pasture use management.  Temporal trends in Mongolia’s rangeland condition have not been well documented relative to the effects of long-term management changes. We studied the changes in pastoral land use management in Tsahiriin tal of northwestern Mongolia and their effects on rangeland vegetation productivity using a remote sensing satellite-based approach.  Grazing lands in Tsahiriin tal that were formerly managed by the socialist collective are now used by numerous nomadic households with their privately-owned herds, although the lands remain publicly owned.  Grazing pressure has more than tripled and herd distribution has changed from a few, spatially-clustered large herds of sheep to numerous smaller herds of multiple species including sheep, goats, horses, and cattle.  Our satellite image analyses indicate that rangeland vegetation significantly decreased (p-value <0.001) from the collective to the post-collective period.  The observed decrease was significantly correlated with changes in the grazing management system and increased herd size. The decrease in rangeland vegetation might be further accelerated, if current grazing land use continues with no formal rangeland management institution or organized, well-structured efforts by the local herding households.

Posted in Book: Change in Democratic Mongolia, Grassland, Nomadism, Research on Mongolia | Tagged | 1 Comment