Mongolia Focus

Dr. Maria Barrados: Future Opportunities for Canada-Mongolia Relations

Posted on May 2, 2012 by JDierkes

Keynote Address

22nd Annual General Meeting

North American Mongolia Business Council

Ottawa, Apr 18-20, 2012

Dr. Maria Barrados

Former President, Public Service Commission of Canada

Future Opportunities for Canada-Mongolia Relations

San Bainu! Good afternoon. Thank you for the invitation to speak to you today. A number of you here today probably have spent more time in Mongolia and have more experience working in Mongolia than I have had. I hope my observations will provide some different perspectives and some basis for further discussion.

Most Canadians don’t know that much about Mongolia. Even seasoned Air Canada agents ask about what the country is like. As a country it had the world’s largest empire and now is the least densely population country in the world. It apparently also has the highest number of horses per capita. Outside the urban areas it is a strikingly beautiful land.

For Canadians, no Ottawa is not the coldest capital in the world, Ulaanbaatar is! Ottawa is only number 7. And as you know — Canada ranks as Mongolia’s 2nd largest foreign investor after China. For the shoppers like me even if I have only half an hour, Mongolia has the finest cashmere products and great buys on wool carpets.

Mongolia is an emerging democracy between the large powers of Russia and China. It remains a poor country, ranking 110th of 187 countries on the UN Human Development Index. Those of you of who have been to Ulaanbaatar have experienced the congestion and pressures on the infrastructure in the City as people move into it look for a better livelihood. However, its abundant mineral wealth offers the potential, if managed effectively and sustainably, to make rapid strides in economic growth and poverty reduction.

Mongolia is a country on the one hand in need of development assistance and on the other offers great potential for investment in the natural resource sector.

The World Bank’s measures of governance (with the six areas that they measure including voice and accountability; political stability; government effectiveness; regulatory quality; (rule of law); and control of corruption) have identified issues that are widely acknowledged within Mongolia. The 2011 World Bank Country Survey cited improved governance and government effectiveness as, by far, the key development priority for the country. {World Bank Country surveys canvas the opinions of public sector, private sector, and civil society with respect to the development priorities of the country and the World Bank’s role. In the current Mongolian survey, government effectiveness/governance is cited by 31% as the most important development priority, well ahead of economic growth, identified by 12%.} The success of political and economic reforms is critically depending on the governance capacities of the public administration. This is the context for the context for the work we have been doing in Mongolia with their public service.

Public Service Reform

The public sector as a whole in Mongolia has undergone, and is still in the process of undergoing, several reform initiatives (such as rationalization, privatization, decentralization, tax reform, reforms in health and education sectors).

Public administration and civil service reforms have been on the agenda of various successive governments in Mongolia over more than a decade. Today, the Government is in the fourth stage of public service renewal, which started in 2008. In order to strengthen public personnel systems and professional civil service, the Parliament of Mongolia in 2008 amended the Law on Civil Service to mandate civil servants to be non-partisan and free from any political activities. This marked the move to creating a professional civil service which is politically neutral and is hired and promoted on the basis of the principles of merit.

These amendments did not result in the rate of change anticipated and the law is being examined for further amendments. In this area Canada is viewed by many countries as a model because of our professional, largely merit based nonpartisan public service.

The Civil Service Council of Mongolia had visited the Public Service Commission of Canada and was anxious to exchange experience and best practises on the building of a merit-based, non-partisan public service. This relationship was formalized with the visit of Prime Minister Batboldt to Canada in September 2010. Three MOUs were signed in the presence of both Prime Minister Harper and Prime Minister Batboldt at that time —one with Agriculture Canada, The Standards Council of Canada and the Public Service Commission of Canada.

John Walter, the President of the Standard Council is here today and he can speak to the work he is doing in Mongolia. SCC is engaging in a number of capacity building activities with the Mongolian Agency for Standardization and Metrology (MASM) and a number of ministries in the Mongolian government.

Prime Minister Batbold suggested that he would like to take Canada as a model for development particularly as it related to mining, infrastructure, construction, agriculture, service and public service.

This capacity building will strengthen Mongolia’s standardization and regulatory infrastructure and will contribute to Canada’s relationship with Mongolia as an important trading partner. Shared standardization practices will serve to strengthen ties between the two countries, reduce trade barriers and open the door to new trading opportunities.

The Public Service Commission undertook comparative work of the Mongolian and Canadian staffing systems which provided a better understanding of the similarities and differences between the two systems. The Mongolian Civil Service Council – closely equivalent to the Public Service Commission of Canada- wanted to make changes that strengthened their system more like ours in Canada.

Assistance was provided by CIDA’s Deployment for Democratic Development (DDD) program. Work was initiated with the Civil Service Council and a Prime Ministerial working group designed to make amendments to the existing legislation.
After a year of work under phase 1 of the DDD project a lot was accomplished but not surprisingly a lot more remains to be done. Draft legislation was completed by the Civil Service Council in January 2012 closely following the recommendations made by the project and achieving a key result for the project. However, the legislation has not yet been tabled since the President’s Working Group has not completed its work.

The project also started to work with the President’s Working Group. Both groups are “inspired” by the Canadian model to find an appropriate solution for Mongolia.
The project provided significant support to the CSC enabling them to do their work, through various activities. These included the preparation of proposed recommendations, cooperation with different working groups, national and international seminars, and ongoing advice on specific requests. This required a number of missions to Mongolia by the Canadian delegation and also involved visits by Mongolian delegations to Ottawa.

The final step of bringing together the results of the different working groups in Parliament has still to be taken, most likely in the fall of 2012, after the elections in June. Of course, legislative amendments are just the first step in effecting change.

Some Observations

1. The Reformers and Leaders

Many of the people in the government and public service in leadership positions are young, very well educated, usually abroad, and committed to reform. They are keen to modernize democratic systems and processes. Their experience in organizational implementation is often more limited and they are dealing with a bureaucracy that is not uniformly committed to change The challenge, of course, is to bring the whole system into the change process. Articulating a vision and putting in place enabling legislation are important parts of change but many initiatives flounder on implementation.

Building capacity needs to deal with the challenge of implementation and dealing with inevitable resistance to new, more formal, transparent, accountable ways of operating.
The Mongolia media has been interested in the reform process as it applies to getting jobs in the public service and the general philosophy of change. An interesting public debate led by one of the local television commentators was started on developing a more service oriented public service. He argued that terminology should be changed from civil service to a public service.

OECD has observed that new democratic states from a Soviet past need to be particularly vigilant is moving their public service from serving the interest of the state to serving the public interest. In democracies, public servants have the obligation of carrying out their duties and responsibilities in the public interest rather than the interest of the state. This requires fundamental change throughout the bureaucracy.

Indicating responsiveness on the part of the State Great Hural, the language was changed in the new Law on Regulation of Public and Private Interests in the Public Service and Prevention of Conflicts of Interest.

2. The Size of the Population and the Natural Resources

The population of Mongolia is about 3 million people with about half of the population in the capital City. This relatively small population that has traditionally been educated is more manageable for government to provide services and support. Without doubt there are numerous development challenges. There is potential in the responsible development of natural resource.

While aspects of the problem appear daunting, many countries, including Canada, have been willing to provide development assistance. With the smaller population, the scale of the issues to be dealt with is more manageable. The proximity of China has also provided for Mongolia a source of labour where they cannot meet the demands themselves.

3. The Commitment to Building a Strong Democratic State

Freedom House currently rates Mongolia as “free” with a 2.0 rating.2—this is good. {Freedom House annually rates 184 countries as being free (1-2.5); partly free (3.0-5.0); or not free (5.5-7.0) using a methodology that gauges civil liberties and political rights.} This rating reflects what I have observed in their leadership. A significant achievement that will hopefully be solidified in upcoming election processes.

Mongolia with its unique geo-political location and history can be a model democratic state to other new states and other states in the region.

For further societal progress to be made robust public service institutions need to support government. This is certainly recognized by the Mongolian leadership.

The work of the World Bank and other financial institution have concluded that social and economic development and well- being are directly related to the existence of a professional, competent, merit based public service. A society’s strength is directly related to the strength of its public service.

4. The Linkage with Canada

There are a number of factors that bring us together, not the least of which is our climate, proximity to strong powerful neighbours, and many similar natural resources. The land and conditions in our Prairies resemble parts of Mongolia.

In addition to the MOUs with the federal government, MOUs have been signed in British Columbia with the University and lumber. These are also linkages with the Saskatchewan Trade and Export Partnership (STEP). And of course, the investment of our mining sector in the development of the environmentally sustainable mining. There are number of bilateral linkages that have developed based on mutual common interest.

From my experience with the Civil Service Council, there are many Canadian practises that are of interest to them. Canadian government officials are proud to be able to share their experience and work with Mongolians to find solutions based on our experience that would work best for them.

5. The Development Challenge

Civil service reform in Mongolia has been receiving support from other countries/donors since the early 90s’. The Civil Service Council has worked with a number of Agencies including the Asia Development Bank (ADB), the World Bank (WB) and the Swedish Development Agency (SIDA) in the implementation of the Mid-Term Civil Service Reform Strategy and Implementation Action Plan from year 2007. These reforms were heavily influenced by the New Zealand model of public sector management.

As we started our work we would ask questions about existing structures and practises, for example, formal selection processes, review processes classification systems. We were told it was all there but there was a frustration that they were not working as intended. From further discussion it was evident that there were issues with a capacity to implement both from a knowledge of the people, willingness to change and the absence of necessary tools and support. The new frameworks were imposed on old practises and informal traditions.
In the absence of accepted conventions necessary powers were not put in place, for example, in my view the Civil Service Council did not have sufficient enforcement powers to carry through on implementation and ensure that past practise did not persist.

The culture and institutional traditions in New Zealand that allowed their contract model to work were not present in Mongolia. As is well argued by Allen Schick ( ‘Why Most Developing Countries Should Not Try New Zealand’s Reform’, The World Bank Research Observer, vol. 3, no. 1, February 1998, 123-31), developing countries dominated by informal structures are risky candidates for applying the New Zealand model. He goes on to argue that new public management reforms such as those in New Zealand are unlikely to succeed unless sound management practises are in place to begin with. His observations are consistent with the situation in Mongolia today requiring further reforms.

6. Government and Business

The development of the government and business sectors is not a question of either/or but both need to be strong and viable. There are debates in Mongolia as in other parts of the World about the amount of centralization versus decentralization, privatization or government control, out sourcing or in sourcing. These will be political decisions but both sectors need to be developed

Public services play many different roles – some more visible than others from development of policies and regulations to providing policing, border services and diplomacy. And many more. All services needed in a modern state.

Modern societies all rely on a bureaucratic structure to support the leadership. Different governments have different approaches to how they organize their bureaucratic arm. However, there is a consensus on its importance and the crucial role it plays in the development of society. While government organizations vary across cultures and societies. They have two factors in common:

the special status of their public service, and with that special status come special obligations which are set out in codes of conduct,
the importance of good people management. It is only through the people that things get done.

The driving forces of sound management, formalization and transparency, and appropriate control are important for both sectors. Analysts such as Allen Schick argue that progress in either sector requires parallel advances. However, I believe that leadership can and should come from government.

Prospects for the Future

My crystal ball is no better than anyone else’s. From our experience in the first DDD project we learned that there has to be considerable flexibility to be able to adapt to the issues and circumstances in Mongolia. As Canadians few speak Mongolian so there has to be a reliance on interpreters and translation.

Our project for the short period that it ran had considerable success in forming good working relationships, exchanging practises and drafting legislative proposals. The Mongolian public servants we worked with were very good partners. We shared a common vision of a professional, merit based, non-partisan public service. They are keen to continue their collaboration.

We had very good support from the Canadian Government—the Ambassador Greg Goldhawk and his staff was always there to help, CIDA officials provided much needed support, and the Public Service Commission allowed me to continue this work when my term was unexpectedly extended. I understand there is a commitment to continue providing development support on the part of the Canadian government.
We both live in democracies so with elections things can change. In Canada we have the good fortune to have a public service that does not change with electoral change but clearly political direction can change. This gives government stability and continuity. Hopefully Mongolia can achieve the same thing.

From the young leadership that I met from both political parties I was very encouraged by their commitment to modernization and reform within the democratic framework.
So I would say that the prospects for future collaboration on development initiatives are good. This collaboration would provide a stability and clarity in frameworks that would support further business development.

There are opportunities for effective collaboration on development with very willing and able partners. Modernized government that is based on formalized structure with greater transparency provides a more stable environment that will only help business.

As you can see I am quite optimistic and I don’t think I have on rose coloured glasses.

——————

Ms. Maria Barrados served as President of the Public Service Commission of Canada from November 2003 to December 2011, during which she organized cooperation with the Civil Service Commission of Mongolia as the result of the MOU signed during Prime Minister Batbold’s historic visit to Ottawa in September 2010. Ms. Barrados had originated the suggestion of such an MOU to Prime Minister Harper. She is still actively involved with the PSC program in Mongolia and in fact departed for Ulaanbaatar only a few days after delivering this keynote address.

She previously served as Assistant Auditor General at the Office of the Auditor General of Canada. Educated as a sociologist, Ms. Barrados began her career as a lecturer and later as a Research Project Supervisor at Carleton University. She is a member and former Chair of the Canadian Council on Health Services Accreditation. Ms. Barrados earned her BA with high honours in Sociology from the University of Saskatchewan in 1966, an MA in Sociology from McGill University (1970) and a PhD in Sociology from Carleton University (1978). She is a recipient of the Confederation Medal (1992). Ms. Barrados is married and has one daughter.

Posted in Bilateral Aid, Canada, Development, Governance, Maria Barrados | Leave a comment

Guest Post: Mongolian Medical Tourism Industry on the Rise

Posted on May 1, 2012 by JDierkes

By Tsogtbaatar Byambaa

Medical tourism (MT) entails the intentional pursuit of medical care beyond the borders of a patient’s home country, privately arranged for and usually paid for out of pocket. These patients are motivated by high costs of care in their home countries, higher quality or faster care abroad, and/or the inability to access care in their home countries. Research on the potential health equity impacts of MT has generally focused on patients traveling from the Global North, thus ignoring the large numbers of patients from the Global South traveling across lower and middle income countries to access medical care. These patients represent different challenges to their home health systems that require independent investigation.

Mongolia is increasingly a source of medical tourists for nearby countries promoting medical care to foreign patients. Between 13-22 April 2012, SFU team that works on Medical tourism traveled to Mongolia to explore the impact on local health services when affluent Mongolian citizens travel abroad for health care. The aim of SFU researchers’ trip was also to develop collaborative research networks in Mongolia, which will ground future comparative research examining the impacts of MT on a diverse array of health systems. Canadians represent the second largest group of international investors in Mongolia and will benefit from a better understanding of the forces shaping the health system of the country and, by extension, the health of Mongolia’s citizens. Further to this, we may glean insights into how Mongolian officials and health care providers are coping with the continuing outflow of patients while struggling to establish and maintain an equitable health care system. These insights can serve as potential areas of innovation to be applied here in Canada, which is another known source country for medical tourists.

Patients from more economically developed countries are flocking to developing countries to receive treatment for everything from elective cosmetic procedures to complex surgeries such as organ transplants and reproductive treatments, controversial stem-cell procedures and multiple sclerosis liberation therapy.

The medical tourism industry is booming in Mongolia. But there is a surprising lack of academic research into the industry’s size, the ethics and risks of medical tourism, and the effects it can have on developing countries’ local health services.

SFU health geographer Valorie Crooks established the SFU Medical Tourism Research Group (MTRG). In 2008, she was the first Canadian researcher to receive a Canadian Institutes of Health Research (CIHR) grant to study the subject. “We found that many Canadians are relying on informal testimonies and anecdotal information from the Internet to make important decisions for surgical care,” says Crooks. “People believe Canadians are going abroad because of waiting lists and Americans are going because it’s cheaper, but our research shows that it’s more complex than that,” says Crooks.

Health inequities?

What’s happening to local health-care services in developing countries that cater to medical tourists?

“There’s a lot of speculation that medical tourism is great for the locals because it brings in money and jobs,” says Crooks. “But on the other hand it shifts the focus to high-end surgeries and facilities for treating international patients. “There’s very little evidence one way or the other to prove these two theories.”

Between 13-22 April 2012, Medical tourism team traveled to Mongolia to explore the impact on local health services when affluent Mongolian citizens travel abroad for health care.

“We looked at the health-system challenges this poses for Mongolia to see if there were any lessons we can learn about how a lower-resource environment then deals with its patients,” explains Crooks.

They met with academics and interview facilitators who are sending Mongolians abroad for health services as well as local health officials.

Mongolian health sciences grad student Tsogtbaatar Byambaa, who inspired the research, is concerned about the growing numbers of Mongolians travelling outside of the country to receive medical care. He wants to know more about their outcomes and the long-term impact on the country’s health system. The study went successfully and results are expected to be revealed within next few months.

About Tsogtbaatar Byambaa

Dr. Tsogtbaatar Byambaa is the Project Coordinator for the CIHR funded Equity-Focused Health Impact Assessment Tools and Methodologies in Mongolia: Supporting and Scaling-Up Local Experiences project. He is a PhD candidate in the Faculty of Health Sciences at Simon Fraser University, Burnaby, BC. He received his MSc in Health Administration and International Health Policy from University of Colorado. He is a family physician by background who has worked on several public health projects in Mongolia, including serving as a coordinator for the Global Fund supported HIV/AIDS project of Ministry of Health in Mongolia. His research interest focuses on managing the potentially adverse public health consequences of development sector in developing settings. Tsogtbaatar Byambaa is currently engaged in research projects on health impact assessment policy development, medical tourism and air pollution.

Posted in Health, Research on Mongolia, Social Issues, Tourism, Tsogtbaatar Byambaa | 2 Comments

Election Set for June 28 2012

Posted on April 26, 2012 by JDierkes

Apparently, Thursday, June 28 has now been picked as the date for the parliamentary election in Mongolia.

That is after the dates that had been originally envisioned (June 20 or 27), perhaps to give the national election commission some more time for preparations.

Mongolians living abroad will vote June 10.

While Ulaanbaatar city elections will be held on the same day, the soum and aimag elections will not be, even though that had been proposed in the name of administrative efficiency. Ulaanbaatar city elections will be run using a mixed direct/proportional election system that is modelled on the system that will be used for the Ikh Khural.

Assuming that the three-week campaign period is still in place, that would suggest that the campaign will begin on June 7. Six weeks from today.

[Many thanks to Tsogtbaatar Byambaa for updating me on this.]

Posted in Elections, Ikh Khural 2012, Party Politics, Politics | Tagged Julian Dierkes | 1 Comment

Regulating Foreign Investment Directly?

Posted on April 25, 2012 by JDierkes

One of the questions that is emerging out of the recent announcement of a review of South Gobi’s mining license (transparently in reaction to an announced sale of South Gobi to CHALCO) is whether we will see an increase in resource populism in the upcoming campaign and whether this will suggest that laws to regulate foreign investment directly (rather than through mining licenses which has been the pattern in the past) is on the horizon.

My suspicion on both fronts is increasingly, yes, we will see more populist arguments in the campaign, and yes, legal changes regulating foreign investments may be on the horizon, but both developments are far from certain and are closely tied to the election (campaign) itself, so if they are not immediately visible during the election or in the immediate months after the Ikh Khural reconvenes with its new membership in September, this may pass.

Populism

There is no doubt that individual politicians campaigning for seats in the upcoming election will use populist arguments (à la, “the foreigners are taking our gold!”) in the campaign. Arguments of this kind have been made during previous elections and from sitting parliamentarians (though typically MPs without access to executive decision-making).

The 2008 election bidding war between the then-MPRP and DP over how large a cash payment (resource dividend) individual citizens should receive (“I’ll distribute 1,000,000 TG!” “Ha, you will receive 1,500,000 TG, if you elect me!”) is a relatively benign version of this kind of argument, but much of the rhetoric around the 1/3 share of ownership of the OT project and the decision not to sell the TT project is built on similar populism.

I still think that it is unlikely that party platforms, at least of the dominant DP and MPP, will embrace these kind of arguments, but will not be surprised at all if a number of individual candidates will turn this way to build their profile and bolster their electoral chances.

It remains to be seen and it will be highly determinant of future policies how many individual politicians embrace populist rhetoric and how openly they will do so in going how far?

Policy Changes for Foreign Investment

In the past, the mining license has been used as the main tool to regulate foreign investment. In the cases where (Canadian) investments have run into some regulatory trouble (Western Prospector, though its sale ultimately went through; Centerra Gold, now trying to move to construction/development of its Gatsuurt deposit; Khan Resources; now, South Gobi) the resources authority has relied on (revocation of) mining licenses as the primary policy tool. This is partly due to the fact that foreign investment was liberalized during the 1990s shock therapy days, but specifically in the 1997 Mining Law.

Current discussions suggest that legislative changes could be on the horizon that would regulate foreign investment in mining projects directly. Judging by their most recent press release, this is a possibility that Ivanhoe Mines seems to be foreseeing. The designation of a “strategic asset” that also provided the lever to insist on partial state ownership of OT, could be used in this regard to create a process of review for all foreign resource ownership.

This would all be quite familiar to would-be foreign investors in Canada’s resource sector, of course, as Canada has long insisted on restrictions of foreign ownership of resource assets, witness the 2010 BHP bid for Potash as one of the most prominent examples.

Conversely, any discussions of ownership restrictions may lend additional urgency to the Canadian government’s desire to conclude a bilateral Foreign Investment Protection Agreement (FIPA) with Mongolia that has been under negotiation since 2009, though with no publicly announced progress made.

As with many posts at the moment, I wish I was in Mongolia to get a more direct sense of current discussions and am very much looking forward to my visit there during the parliamentary election (campaign) in June.

Posted in Canada, Elections, International Relations, JD Mining Governance, Mining, Oyu Tolgoi, Politics, Populism | Tagged Julian Dierkes | 2 Comments

Evaluating and Classifying Developments in Mongolia

Posted on April 23, 2012 by JDierkes

Jonathan Manthorpe is one of the most prominent voices on contemporary Asia in Vancouver as the long-time international affairs columnist for the Vancouver Sun. Today he wrote a story that portrays many of the current developments in a very – and in my mind – unduly negative way: “Miner’s Motherlode Mongolia Faces Instability Ahead of June Election“.

Instability? For sure! Is there anything factually wrong with Mr Manthorpe’s article? No! In fact, I would say that the article is well worth reading, in part because it takes a different – in this case, more negative – view of political developments in Mongolia.

“[S]ince […] 1990, Mongolia’s early successes with creating a vibrant democracy have subsided into bitter factionalism, outrageous corruption and incompetent government.”

What are “bitter”, “outrageous” and “incompetent” doing here? More than factionalism, I would argue that Mongolian democracy has been characterized by patronage politics, that is attempts – often blatant, and more often than not linked to corruption – by politicians to exploit decision-making authority for (financial) gains for themselves, their families/supporters, or regional affiliations. Factionalism? I haven’t seen very much of that. Mongolian members of parliament of both parties certainly have had an independent streak, particularly parliamentarians who have not been members of cabinet and have seen benefits in an appeal to populist sentiments, possibly for electoral gain.

Manthorpe is surely right in linking the recent arrest of former president Enkhbayar to electioneering, certainly in its timing, but “extreme partisan politics”? Are robo-calls “extreme partisan politics”? Would we label them as such?

Some of the rivalry between Enkhbayar and the leadership of the Mongolian People’s Party, including Prime Minister Batbold, is rooted in his perception that the party (then still known as the Mongolian People’s Revolutionary Party) abandoned Enkhbayar during his campaign for re-election in the 2009 presidential election. What Manthope doesn’t mention or – more likely – doesn’t have the space to mention is that Enkhbayar has become more and more of a loose cannon with relatively wild accusations of other politicians, including current PM Batbold, and previous PM Bayar. Some of these accusations have come in the context of the trial of four senior police officers for the deaths of five demonstrators/rioters on July 1 2008, the unrest that Manthorpe mentions in his article as well. The arrest of Enkhbayar has come in the context of a reinvigorated Anti-Corruption Agency and a long-standing investigation of Enkhbayar and his wife for corruption. Calling the split between Enkhbayar and his former party-mates “bitter factionalism” is making this split sound like more of a systemic issue than it really is.

While there have also been some criticisms of PM Batbold within the MPP recently, I do not see these as evidence of the emergence of factions that are organized under a policy-view or a leader within the party. To the contrary, factions that have formed in the past have tended to leave parties to start their own, and the recent changes to the electoral system that have proposed to introduce an element of proportional representation would benefit such separate parties and encourage their formation.

“[Enkhbayar’s] arrest led swiftly to a large demonstration by supporters”

I have been struggling to find out more about these demonstrations over the past week. As far as I can tell from Mongolian press reports and contacts, these are not “large demonstrations”, but seem involve some hundreds of core Enkhbayar supporters. This would confirm my sense that Enkhbayar personally and through the re-formed MPRP has taken on a bit of a fringe existence.

Manthorpe says as much himself in the next paragraph, “Hundreds of people gathered in central Sukhbaatar Square in the capital Ulaanbaatar and mounted a noisy but peaceful demonstration outside the parliament building.” That does not sound like a “large demonstration” to me.

Manthorpe does refer to the July 1 2008 events. I would emphasize that almost all Mongolians were startled by the events four years ago and would argue that they were an aberration, not part of a development toward political violence. In fact, I would emphasize that compared to other post-state socialist countries, not just in Central Asia, but Russia as another example, the apparent rampant corruption in Mongolia has not been linked in any way to political violence or the development of any kind of organized crime, at least I have not heard about any indications of such developments.

Manthorpe believes that “Enkhbayar’s MPRP is set to do well in the June parliamentary elections.” I am not sure that I would agree. The re-formed MPRP will win seats, no doubt, in part because some current MPs look set to defect to the MPRP. Also, there are some attempts for the re-formed MPRP to usurp party structures that “belonged” to the old MPRP. While this will most likely not result in the transfer of any material resources, allegiances may well transfer, particularly with older voters and voters in the country. Though I hesitate to make specific predictions about the election outcome (hopefully, I will get a better sense of likely outcomes when I will be in Mongolia in June), the MPRP will likely reduce the MPP share of votes and possibly take some DP seats as well, but I would be very surprised if these seats amount to a significant portion of the 76 seats in the Ikh Khural. If the MPP loses significantly, of course, the MPRP might emerge as a possible coalition partner.

June’s elections are approaching at a time when Mongolia is facing a host of contradictions stemming from its transition to democracy. There are also the tectonic tremors in its economy as it shifts from a basis in agriculture and semi-nomadic herding on the country’s vast grassland steppes to one based on mining.

Political leaders have wrestled with the horrendous problems of trying to develop mining policy and regulations. They continue to struggle with fashioning a mining industry that benefits the country and its people even as hordes of mining company carpetbaggers from Australia, Europe, the United States and Canada clamour at their doors for concessions.

All fair enough, but “incompetent government”? While I certainly believe that there are areas where Mongolian politicians could be more strategic in developing their economy and ensuring sustainable benefits from such development, I am also very sympathetic to their struggles in managing an almost unimaginably rapid economic development that calls for policy-analysis and policy-making in so many different, but interrelated areas. Would I be able to handle these developments more competently? As a benevolent dictator, perhaps, but maybe not. Within a maturing democracy? Hardly! My personal emphases might be different, but then I might not get elected in Mongolia.

Is there a Canadian link/perspective on all of this? The strongest commercial link has been Vancouver-based Ivanhoe Mines and the Oyu Tolgoi project that it has been developing. However, Ivanhoe Mines gradual withdrawal (cashing out) from Mongolia is accelerating and within some months that link will practically disappear. There are some other projects under development, perhaps most prominently Prophecy Coal’s proposed power plant, but these are not on the scale of the Oyu Tolgoi project.

As the commercial relationship declines, the Canadian government seems to have taken more and more of an interest in Mongolia starting with the establishment of an embassy there and running through the visit of PM Batbold in Ottawa in September 2010, and repeated discussions of the possibility of further official Canadian visits to Mongolia, though much more likely after the June election.

Substantively, some of the areas that Manthorpe has identified (with a bit too much hyperbole, I would say) are open to Canadian initiatives. Offers should certainly continue to go to the Mongolian government that Canadian officials would be willing to share experiences particularly in resource development and regulation. While these are difficult areas where even long Canadian efforts have hardly produced clear solutions, there is a lot of experience on this available that Mongolian could draw on if they thought this might help them in their own policy analysis and policy making.

Posted in Corruption, Democracy, Elections, Governance, Ikh Khural 2012, Media and Press, Politics | Tagged Julian Dierkes | 2 Comments

Politics Heating up Ahead of Election?

Posted on April 17, 2012 by JDierkes

It does seem like (political) things in Mongolia have been getting more exciting over the past week. Clearly this is linked to the proximity of the beginning of the election campaign.

By the changes to the electoral law that were enacted in December, the parliamentary election is due to be held on June 20 or 27. That would suggest a beginning of the official campaign on May 31 or June 6. However, some of the changes initiated by the changes to the electoral law are still under judicial review. Also, the goal to hold local elections on the same day as national elections (primarily to reduce administrative costs significantly) is threatened by inter-party squabbling. If any of the changes to the electoral law are struck down, by default the election would be run under the previous election system. Recall that this was a bit of a mess of multi-member, multi-vote districts that proved to be difficult to count and also a challenged for voters and parties to wrap their head around.

While the exact nature of the campaign and election procedures remains to be determined, a number of political events suggest that the atmosphere is heating up a bit.

Late last week, frm. prime minister, speaker of the Ikh Khural, and president Enkhbayar was arrested for failing to appear before an inquiry of the Anti-Corruption Agency. Recall that he has been the first very prominent politician to appear in the trial of four senior police officers for the July 1 (2008) riots that followed closely on the last parliamentary election. Recall also that Enkhbayar lost the 2009 presidential election to current incumbent Elbegdorj, but Enkhbayar certainly felt like he was abandoned by his then-party, the Mongolian People’s Revolutionary Party, since re-named Mongolian People’s Party by Prime Minister Batbold, but re-formed as a splinter party with its original name by Enkhbayar. In his trial appearance and other public statements, Enkhbayar is increasingly slinging mud in all directions, focused on July 1, corruption, and some of his political rivals. Now, he’s being detained and looks to remain in detention for the remainder of the week at least.

Some protests have occurred regarding his detention, but the numbers of people involved in these protests continues to be relatively low.

As if domestic politics wasn’t exciting enough, the Mineral Resources Authority (MRAM) held a press conference announcing the suspension of South Gobi Resources’ mining license. It had been surprisingly quiet after the announcement of a takeover of South Gobi by Chinese aluminum giant CHALCO, so perhaps this reaction was to be expected. Predictably, this press conference sent various share prices tumbling and produced angry statements from various foreign investors.

Posted in Corruption, Elections, Ikh Khural 2012, JD Democratization, Mining, Party Politics, Politics | Tagged Julian Dierkes | 9 Comments

MoU: Ministry of Education and UBC

Posted on April 13, 2012 by JDierkes

On March 26, 2012, Mongolia’s Ministry of Education, Culture and Science and the University of British Columbia’s Norman B Keevil Institute of Mining Engineering and Institute of Asian Research signed a Memorandum of Understanding aimed at intensifying cooperation between UBC and Mongolian universities.

The MoU specified a number of areas of potential cooperation including the exchange of visiting scholars, joint organization of conferences and the eligibility of Mongolian students for UBC’s International Partial Tuition Scholarships.

Existing links between UBC and Mongolian institutions, particularly the Mongolian Univ of Science and Technology, focus on the area of mining.

Posted in Canada, Research on Mongolia | Tagged Julian Dierkes | 1 Comment

Mongolian Parliament Election and Uncertainty on an Electronic Vote-Counting System by Otgonbaatar (Waseda University)

Posted on March 21, 2012 by mendee

The election is drawing close attention from both domestically and overseas residing Mongolians, not only because there are many pending issues that are holding their solutions in the Mongolian society.

But also, this is because the State Great Khural (Parliament)[1] is the highest organ of state power as explicitly stated in article twenty of the Mongolian constitution[2] and it holds many important authorities over, for example, supervising the state annual budget, appointing the prime minister and cabinet, and defining the basis of domestic and foreign policies. Basically, the State Great Khural is the highest decision-making unit of the Mongolian political system.

As the Great Khural’s election is approaching in just a little more than three months away from today, implicit and explicit election propagandas has started to heat up in Mongolian media these days. From voters standpoint, the below mentioned issues would likely be the biggest concern when Mongolians decide whom they vote for in the upcoming parliament election.

Problems in good governance – corruption, a lack of transparency and an injustice in judiciary system,
Livelihood problems – air pollution, traffic and disorganization of city planning in Ulaanbaatar,
And more general problems – rapidly growing income disparity and environmental degradations.

Mongolian democracy has already been recognized by international community, although it is not one of the well-established democracies of the world. Indeed, there is an urgent need for further improvements.

On the 14^th of December of 2011, the Great Khural passed amendments to the electoral law. One of the notable changes was introducing a new electronic way of vote-counting system. So, for the first time in Mongolian election history, the new amendment has introduced “a mixed-member quasi proportional election system” which is widely expected to solve previous election incidents, like five people were killed in the demonstration against electoral fraud on July 1, 2008. Nonetheless, the new one is not out of questionings. It seems it also has a long way to be implemented as Mongolians wanted.

The general election committee of Mongolia (GEC) has been the highest organizing body of the elections in Mongolia since 1992. In other words, whether an election goes without incidents or not, is depends upon how the GEC works, in principle. Moreover, by the new electoral law, the GEC has been assigned responsibility for introducing a new electronic vote-counting system, however, its insufficient preparedness and inexperience of handling the electronic machine, have been under a heavy criticism from general public, as well as some MPs. Dissatisfied voices on the GEC’s action have increased in the major media. For instance, due to the low reliability of the proposed machines, the GEC’s first proposal on the electronic system has failed in the Parliament discussion on January. But, as reported in newspapers, the Great Khural has screened the GEC’s later proposal of buying electronic vote-counting machines from the U.S in the early February. The machines will be brought to Mongolia by late May, just a month before the election. Thus, it is really questionable that the GEC will be able to train staff to run the machines properly.

To sum up, many of the previous election entanglements were mainly caused by vote-counting incidents after balloting. A lack of capable human resources who needs to run the electric vote-counting machines, would lead an uncertain situation despite a promising amendments to the electoral law. Since an electronic vote-counting system is considered to be the one of the fundamental components of the new electoral law in order to have cleaner parliament election in Mongolia.

About the Author:

Otgonbaatar Byambaa, a Ph.D. Candidate at the Graduate School of Asia-Pacific Studies, Waseda University, has been conducting a research on Chinese energy security and its state-owned enterprises. He has a Master’s degree in IR from International University of Japan. Otgonbaatar is one of many young Mongolians who are educated in overseas and he has visited to UBC.

[1] The Parliament – The State Great Khural have one chamber and consist of 76 members that directly elected by citizens eligible for election.

[2] See http://www.mfat.gov.mn

Posted in Democracy, Elections, Ikh Khural 2012, Otgonbaayar Byambaa, Politics | 1 Comment

Is Mongolia Fighting or Preparing to Fight Corruption?

Posted on March 21, 2012 by mendee

By Mendee Jargalsaikhan

Mongolia seems succeeding to create the legal environment to tame the corruption by institutionalizing its efforts. But, these laws and any agencies will be powerless in the absence of political will and interest to clean up the Mongolian public service before massive mining revenues appear from 2013.

The Transparency International’s corruption perception index of Mongolia again regressed from 116 to 120 in 2011. It was 43 in 1999. Of course, we can argue there might be some deficiencies in the measurements or analysis of the Transparency International. Because some may argue, Mongolia is doing so well in eradicating the corruption – joined all international endeavors, passed laws, established a special organization to deal with it. In January, Mongolia adds another new bill on preventing conflict of interests into the collection of laws to tame the corruption.

It seems these laws powerless without political will and commitments. Or just, attempts by shrewd politicians to ease the public outcry domestically and international pressures, if there is any. Many politicians (not all) seem to be concerned about slices of larger pies, which will be generated from the mining revenues. Therefore, they are not ready to fight against corruption, but ready, albeit reluctantly, to approve the laws with lesser penalty and potentiality of execution. Two examples could be the laws on anti-corruption and conflict of interests. Both laws were passed by the parliament, but only a handful members of the parliament pushed for passage with strong public support. These pressures created an atmosphere for legislators that they can not oppose these laws.

The Law on Anti-Corruption established the Anti-Corruption Agency. The international and particularly domestic audience perceived this agency as the frontline law enforcement agency in fight against corruption. But, one looks carefully the law, it will be clear that legislators did not want to give law enforcement powers to this organization. It looks like a corruption study think tank to develop corruption index, policies, programs, and to do analysis. Or, an educational institution to increase public awareness of corruption and to teach public servants to compile their incomes. Maybe an archive to collect income reports of public servants. And, a little investigative power is given to the agency. Can a small agency fulfill all of these tasks – which are certainly belong to other government agencies? Civil Service Commissions can do compiling of income reports of public servants. The Ministry of Education can do enlightenment tasks. Any non-governmental organization do the research and indexing. So, let this agency just conduct independent criminal investigation and eradicate corrupted officials from the public services. Because they haven’t given this important power and politicians (un)intentionally crowded their “to do list,” now they are easy target for the “blame game.” The first chief of the agency died in Australia – the case remain unsolved. The second director ousted for doing surveillance, although the parliament never endorses the Prosecutor’s Office’s decision. Now a new team is in position. In addition, it has a 15 member board appointed by the President advises the Agency. Although any judiciary and Presidential posts should be apolitical, but the President is nominated by the political party and then gets power to nominate the Prosecutor General, who has enormous power over the Anti-Corruption Agency.

The second law was indeed a success – because this was the first time Mongolia succeeded at least on the paper to disconnect business and political interests. Politicians are now aware of the existence of the conflict of interest law. If we get lucky to have many politicians with political will and interest, the law is ready although the punishment is soft. Because it was just before the upcoming parliamentary election, members approved the law; otherwise, there will be consequences. The initial bill was intended to be valid from July 15, 2012 – which means people who get elected in the parliament or public posts would not dodge from this bill. However, the President veto-d that date and suggested to implement the law before the upcoming parliamentary election in June. Now, again, parliament members reluctantly received the Presidential veto – agreed to accept its implementation before the election. The law also changed the term for public servants. The public servants were legally labeled as “state servants,” but they will be called as “public servants” who are serving for “public interests.” One would see it as a conceptual change, but only a few members of the parliament like Temujin explains the essence.

These are indications of tightening, if not at least, setting the trap, for corrupted officials to survive and misuse public money. However, enforcement is not coming alone. The Parliament Member Kh. Battulga, a former member of the coalition government, reported on several occasions about domination of the major business groups. A former President N. Enkhbayar and incumbent Member of Parliament and Minister of the Justice and Internal Affairs Ts. Nyamdorj engaged in dyad recalling each other’s connections in corruption through several media interviews. [Also, there is a new dyad between Kh. Battulga and Ts. Nyamdorj in regards with infrastructure projects and the growing MCS’s influence in politics.] A Korean newspaper reported the current government officials sold a land to Korea, but reported in Mongolia as leased. Japanese and Mongolian media are disclosing about secret negotiation involving the Mongolian, Japanese, and the US governments on creating nuclear waste dump in Mongolia. None of these issues explained properly to public, except Mongolia’s stance on non-nuclear principles.

The positive note is that Mongolians freely criticize the government, but the sad note is the public officials are not responsive and reactive to public inquiry and for their actions. Some politicians may be just waiting for the good time to bust his/her opponents – so they need to get a hold of key government institutions, which could serve for their purposes. Only way ahead is to give more power to government law enforcement agencies and judiciary rather than politicizing them. Professionalism must succeed the populism and corruption.

Posted in Corruption, Democracy, Global Indices, Governance, Law | Tagged MENDEE Jargalsaikhan | 2 Comments

Survival of New Defense Minister and Other Issues of Controling the Security Forces

Posted on March 12, 2012 by mendee

One of the youngest cabinet members, J. Enkhbayar, has survived a “no-confidence” vote in parliament on March 9, 2012 after filling the Defense Minister’s seat in the post-Coalition government. At a quick glance, it could be easily interpreted as an election campaign tactic by the Democratic Party – raising accusations over the newly-appointed Defense Minister’s careless statement about the possibility of using the military during a state emergency. A senior member of parliament of the Democratic Party, R. Gonchigdorj, and other key Democratic Party members called for the resignation of the Defense Minister, but it was clearly impossible for the Democratic Party to succeed with this motion considering the majority of the Mongolian People’s Party in parliament.

At the same time, the Civil Service Commission intervened in the Defense Minister’s attempt to influence in appointing the State Secretary of the Ministry of Defense – the highest professional military and bureaucratic post at the Ministry of Defense. The Civil Service Commission appointed the new State Secretary from the short-listed four potential applicants. This closes ongoing attempts to bring a party-affiliated officials to the Ministry’s important bureaucratic post. Surprisingly, it happened in the military first – which indicates the growing influence of the Civil Service Commission.

The recurring trial of police chiefs related to July 1 (2008) event has now been postponed in order to call all high-ranking officials, including the former President, Prime Minister, and Minister of Internal Affairs and Justice in 2008 as witnesses. Upon request, former President N. Enkhbayar officially asked the Chairman of the Parliament to change the status of government materials to unclassified on March 9, 2012, so that he could attend as a witness in an open (live) trial. [On July 1, 2008, five people were allegedly shot to death by the police during the post-election demonstration.]

Related to Mongolian security institutions, the Government’s proposal to amalgamate three different schools – the Border Troops Academy, the National Intelligence Academy, and the Police Academy under the name of the Internal Security Academy caused a round of criticisms from the public. The most outspoken criticism came from the President’s national security advisor, Batchimeg. She warned the Government to re-consider this decision and opposed to empower the Ministry of Internal Affairs and Justice as same as the Internal Security Ministry during the communist regime. Although the government’s logic may be in line with the its attempt to reduce the number of universities and to improve efficiency and effectiveness.

Although these events might be explained in the context of heated political campaigning toward elections, they also tell us the different story. The trial of the police officials of the July 1 event, no-confidence vote over the newly-elected Defense Minister, appointment of the State Secretary of the Ministry of Defense, and backlash against empowerment of the Ministry of the Internal Affairs and Justice are signs of healthy democratic society, where the public and politicians are concerned over the use of and politicization of the security institutions. Like many post-communist states in Eastern and Central Europe, Mongolian security institutions played a quite constructive roles toward democratization process – none opposed or challenged the democratically-elected public officials. However, there are always been attempts by political parties in power to insert their influences in those institutions for their short term political goals. These events revealed attempts of political parties – certainly calling for more clear-cut institutionalization of the security forces – away from the political influence.

Posted in Civil Society, Democracy, Security Apparatus | Tagged MENDEE Jargalsaikhan | Leave a comment

Mongolia – Without Vodka, Cheers With Milk

Posted on March 9, 2012 by mendee

By Mendee J

Having lived through a two-decade democratic transition, people now recognize behaviours of politicians and distinguish the false promises from the practical ones. Therefore, it is also becoming difficult for political entrepreneurs to find something achievable in highly competitive political environment. But, they are always good in engaging in the “blame game”.

One successful and touching initiative is the fight against the vodka, a drink inherited from the Soviet past that has dominated Mongolia during the economic transition of the 1990s because the only successful light industry and business was the distilling business and vodka was included in the family ratio. President Elbegdorj proposed a toast with milk in the New Year’s eve (December, 2010) live to the country and initiated the Vodka Free Mongolia campaign. He asked Province Governors not to serve vodka in any activities where he is present and encouraged the public to join in the campaigns. Now people are beginning to embrace the “Vodka Free Wedding”, “Vodka Free Graduation Ceremonies”, “Vodka Free Women’s Day Celebration of March 8”. This campaign has received support from the public and seems to be gaining momentum.

Although this might be linked to political ambition, an influential Member of Parliament, “Jenko” Battulga, has pushed a draft bill to prohibit alcohol and cigarette manufacturers and people connected with drug (narcotics)-related crimes from running in parliamentary elections. He submitted his draft for the third time for consideration of the parliament.

These are the most practical initiatives to reduce the impact of vodka on Mongolian society. According to the Police Department statistics, about 70 percent of crimes were perpetrated by unemployed people and 20-30 percent involved intoxication (Reports of the General Police Department of Mongolia).

The military has been successful in strengthening anti-alcohol policies; for instance, any alcohol-related incident during deployment will now result in discharge or severe demotion. Now these initiatives need to be endorsed by the government and reflected in the legislation rather being used/perceived as political legacies of Elbegdorj or Battulga. Can the state prohibit the parliament and government to use taxpayers’ dollars to procure and to serve alcohol? The State of Alaska has done it, why not Mongolia – public officials can pay for their alcoholic treat from their own pocket if needed, but not from ours. Then, Mongolia can present its official disconnect from the detrimental Soviet practice – shine as an example for many others.

Posted in Social Issues | Tagged MENDEE Jargalsaikhan | 2 Comments

Guest Post: A Young Democracy Seeks Investors

Posted on March 9, 2012 by JDierkes

Adam Simpson is a Master’s student in the Human Security and Peacebuilding program at Royal Roads University. As a change management specialist and project manager with the Aga Khan Foundation, he is currently overseeing the development of a healthcare infrastructure programme in northern Afghanistan.

This post is based on a policy update to the Canadian Defence & Foreign Affairs Institute which also covered the regulatory framework of resource management for Afghanistan.

Mine-golia: A Young Democracy Seeks Investors

Mongolia has vast and largely untapped mineral deposits of copper, gold and coal, but until recently, has remained largely impoverished. With several big mining projects on the horizon, however, there is promise of an economic boom that will present the government with a very real challenge: how do you manage to successfully exploit these resources without further destabilizing the economy? And how will their proximity to China factor into the equation?

The International Monetary Fund foresees a double-digit annual-growth rate in Mongolia for the next several years, and a quadrupling of GDP per head – from a mere $2,000 – by 2018 (Anonymous, 2010). Two mines in Mongolia’s southern Gobi region – Oyu Tolgoi, a copper and gold deposit, and Tavan Tolgoi, a coal mine – are expected to provide much of the new wealth, both of which will include road and rail links to Mongolia’s hungriest customer: China (Anonymous, 2010).

Legal Constructs

Currently, the Mongolian government stands to profit handsomely from Oyu Tolgoi, of which they own one third (Anonymous, 2010). But in a country where politics is based on patronage, such a windfall could spell disaster. With swollen government coffers, vote-buying and corruption could thrive, and even “virtuous public spending” could push up inflation (Anonymous, 2010). Further, if their economy becomes too dependent on mining, Mongolia becomes highly vulnerable to price shocks and market fluctuations. One recent construct is the adoption of fiscal stability law that sets indices for commodity prices for budgeting purposes. When prices go above the index, excess revenue will be stored in a “stability fund”. If prices fall, the government can tap the fund to cover its costs (Anonymous, 2010).

Other measures are also being implemented to curb the risks, including the passing of new anti-corruption legislation, as well as promises to help boost investments in non-mining sectors, including tourism, finance and outsourcing so that the country does not become dependent on a single industry.

Proximity to China

Mongolia’s neighbour China is one of the largest global consumers of coal and rare earth minerals (Anonymous, 2010). With healthy diplomatic ties established between the two countries, Mongolia is uniquely positioned to start undercutting China’s existing coal suppliers such as Australia and Indonesia, pending the development of appropriate infrastructure.

Analysts estimate that when the Tavan Tolgoi mine opens, Mongolia could deliver coal to China for under $100/tonne, less than half of the $220/tonne for Australian coal (Anonymous, 2010). The main concern, however, is whether or not Mongolia can avoid becoming too economically dependent on China and their insatiable appetite for resources, and grow their mining industry in a sustainable way. To date, they have not been able to establish a solid foundation to achieve this.

Foreign Direct Investment: Shifting Frameworks

Mongolian mining frameworks have historically been poorly defined, shifting dramatically between a keen focus on FDI and a state-protectionist model. After the fall of the Soviet Union – its primary trading partner until the early 1990’s – Mongolia recognized the need to attract new investors (Anonymous, 2011).

Mongolia’s 1997 Minerals Law aimed to attract FDI by reducing investment taxes, strengthening land tenure rights, and increasing transparency, and in 2002, the government further lowered royalty payments on all minerals to 2.5% (Anonymous, 2011). As a result, FDI in Mongolia grew 2,200% to an annual total of $344m in 2006. This economic boom was highlighted by the discovery of the world’s largest copper and gold deposit at Oyu Tolgoi in the south Gobi Desert (Anonymous, 2011), but the government was starting to get nervous about the increasing foreign dominance in the mining sector.

A 2006 revision of the Minerals Law shifted the country to a significantly more protectionist model (Anonymous, 2011). The new regulation doubled royalty rates, imposed a Windfall Profits Tax of up to 68% on copper and gold, and reserved the right for the government to claim ownership of “strategically important” deposits (Anonymous, 2011). It also allowed the state to take up to a 50% equity stake in deposits discovered with government assistance or 34% for privately explored deposits (Anonymous, 2011). But investor backlash, coupled with the spread of the 2008 global financial crisis drove down demand and prices for Mongolian commodities, and in 2009 legislators repealed the Windfall Profits Tax and replaced it with a sliding scale of royalties, effective early 2011 (Anonymous, 2011).

The Role of China: What Should it Be?

The extent of China’s role in the context of growing Mongolia’s national mining industry is far too complex to be intimately addressed in the scope of this paper, but by using China at a high level to illustrate the influence foreign direct investors will have in the future of this emerging economy was worthy of a brief analysis. As Mongolia will continue to rely heavily (if not almost entirely) on FDI to exploit its mineral wealth, regulatory reforms and governance will largely revolve around the relationships with these foreign actors, whether they be private consortiums or state-run companies. Systemically, it is the question of to what extent will FDI govern the future of this industry, and can Mongolia grow and open their mining opportunities to an internationally diverse group of investors?

Mongolia’s Mining Future

Mongolia’s current mining regulatory framework is still a work in progress. While the Mineral Law allows 100% foreign ownership of businesses, only individual Mongolian citizens can own the real estate under mineral deposits to be exploited (Anonymous, 2011). The current tax code is an improvement over its predecessor and provides more opportunities for capital investment deductions, but in a country that is expanding at such a frenetic pace, not only must foreign companies ensure they are well informed of planned regulatory changes before they become law to ensure the viability and long-term stability of their projects (Anonymous, 2011). Perhaps most importantly though, Mongolians themselves must ensure that they keep their mining industry and reliance on China in check by establishing equally viable markets in other industries such as tourism, finance, and outsourcing.

References:

Anonymous (2011). Mongolia rocks. Industrial Minerals, http://proquest.umi.com/pqdlink?did=2259607981&Fmt=2&rqt=309

Anonymous (2010). Nomads no more; Mongolia’s mining boom. The Economist, 397(8705), 52.

Posted in Adam Simpson, Development, Mining, Research on Mongolia | Leave a comment

Call for Proposals: 2012 Central Eurasian Studies Conference

Posted on March 7, 2012 by JDierkes

Central Eurasian Studies Society (CESS)

Annual Conference

Bloomington, IN: Oct 18-21, 2012

Deadline for Submission of Proposals: Apr 1, 2012

Posted in Conferences | Leave a comment