CPSI NewsWire brings you market updates on Mongolia, compiled by CPS International, a Mongolian marketing arm of CPS Securities, a Perth, WA based stockbroking and corporate advisory firm, specialising in capital raising for mining and junior stocks.
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Khan Files Second Quarter 2012 Financial Results
TORONTO, ONTARIO--(Marketwire - May 4, 2012) - Khan Resources Inc. (TSX:KRI) ("Khan" or "the Company") announced today that it has filed its financial statements and management's discussion and analysis for the three and six months ended March 31, 2012 on SEDAR and has posted these documents to its website www.khanresources.com.
Highlights for the quarter include:
· The Company's interim financial statements have been prepared in accordance with IFRS and in Canadian dollars. Comparative statements, previously prepared in US dollars under Canadian Generally Accepted Accounting Principles ("GAAP"), have been adjusted for changes in the functional and reporting currencies of the Company and its subsidiaries and other IFRS adjustments.
· The net loss for the three-month period ended March 31, 2012 was $1,259,000 or $0.02 per share compared to a net loss of $1,222,000 or $0.02 per share for the same period in 2011.
· In respect of the $200 million International Arbitration action against the Government of Mongolia, a hearing on jurisdictional matters will be held May 14 to May 16, 2012. As a result, activity levels were high in the second quarter preparing and submitting briefs in advance of the actual hearing. Submissions were made to the Tribunal on February 3, 2012 and on April 23, 2012. The Company remains confident of a favourable outcome to the arbitration action.
· In respect of the $300 million lawsuit against Atomredmetzoloto JSC ("ARMZ"), the Company announced on March 12, 2012 that it had received the decision of Justice O'Marra of the Superior Court of Justice of Ontario allowing an appeal by ARMZ of the previous decision of the Superior Court which had validated service of a statement of claim in respect of Khan's lawsuit against ARMZ. On April 20, 2012, Khan announced that it has filed an appeal with the Court of Appeal for Ontario in relation to the March decision of the Superior Court.
· On April 12, 2012, the Company announced that it had received a notice from the Toronto Stock Exchange ("TSX") that the TSX has decided to delist the Company's securities effective at the close of market on May 11, 2011. The Company's common shares have been conditionally approved for trading on the Canadian National Stock Exchange ("CNSX") and the Company is in the process of completing the listing procedures for the CNSX.
· On April 19, 2012, the Company announced the closing of a non-brokered private placement financing resulting in the issuance of 13,600,000 common shares at a price of $0.17 per common share for gross proceeds of $2,312,000. The Company plans to use the proceeds of the offering to advance the International Arbitration case against the Government of Mongolia and for general corporate purposes.
MEC: Adjustment to the Conversion Price Under the SF Convertible Notes
Conversion Price under the SF Convertible Notes is adjusted to HK$3.14 per conversion Share.
May 4, Mongolia Energy Corporation Limited (HK:276) --
Mongolia Energy Corporation Limited (the "Company") refers to its announcement of 3 November 2010, and pursuant to which the 3.5% convertible notes of the principal amount of HK$466,800,000 (collectively the "SF Convertible Notes") were issued to the holders of the SF Convertible Notes.
As a result of the placing of 150,000,000 Shares as announced on 28 February 2012, and pursuant to the terms and conditions of the SF Convertible Notes, the conversion price of the SF Convertible Notes is adjusted to HK$3.14 per Share, and the total number of Shares issuable under the SF Convertible Notes upon full exercise will be 148,662,419 Shares. As of today, no conversion is made by the holders of the SF Convertible Notes. Save for the above adjustment, all other terms and conditions of the SF Convertible Notes remain unchanged.
The adjustment has been reviewed and confirmed by a financial adviser pursuant to the terms of the SF Convertible Notes.
2.4m 20c Draig Options Exercised
May 4, Draig Resources Limited (ASX:DRG) --
GCN: First Mongolian Share Distribution Entitlement
May 7, GoConnect Limited (ASX:GCN) --
Further to the announcement on 15 March 2012, directors of GoConnect Ltd ("GCN") are pleased to confirm that under GCN's partnership agreement with First Mongolian Investment Holdings Ltd ("First Mongolian"), 100 million First Mongolian fully paid ordinary shares representing 10% of First Mongolian issued capital upon ASX listing, subject to ASX listing approval, will be distributed to qualifying GCN shareholders in proportion to their GCN shareholding for nil consideration ("Entitlement Shares"). On a fully diluted basis, based on the existing issued capital of GCN as at 7 May 2012, and dependent on the number of GCN shareholders who will qualify, each GCN share will be entitled to approximately 0.10 First Mongolian Entitlement Share to be issued with a face value of 40 cents, thus providing a distribution face value for each GCN share of approximately 4 cents in First Mongolian share. Investors need to be aware that First Mongolian shares may have a market value higher or lower than the face value.
Only GCN shareholders who have 250,000 shares or more, and registered as shareholders by the books closing date, will qualify for the distribution. First Mongolian has planned to seek listing for its shares on the ASX. Preparation of a prospectus for the proposed ASX listing is well under way. Sino Investment Services Pty Ltd is the Lead Manager for the proposed listing.
For investors who buy or sell GCN shares, the final determination of entitlement to First Mongolian shares will depend on their GCN shareholdings being registered with Computershare Registry by the books closing date at the close of business on Friday 8 June 2012.
While normal settlement term for shares transacted on the ASX is T+3, GCN and its related entities and management, will not accept any responsibility or liability for investors who buy or sell GCN shares but for whatever reasons, including but not restricted to any delay in or early settlement of their share trades, fail to have their shareholdings registered with Computershare Registry by the books closing date of 8 June 2012 and accordingly, miss out on the First Mongolian share entitlement.
Investors should consult their sharebroker regarding settlement of their share trades to ensure that they are protected for the First Mongolian entitlement, and that their qualifying GCN shareholdings are registered with the Registry on the books closing date within the ASX settlement term.
Further, GCN shareholders who qualify for the First Mongolian Entitlement Shares on 8 June 2012, will also each be offered a right to subscribe for an additional $2,000 of First Mongolian shares under the prospectus to be issued ("Subscription Shares"). The right to take up the Subscription Shares will be independent of the Entitlement Shares and qualifying GCN shareholders will not be obligated to take up the Subscription Shares.
CONTRACT ON RAILWAY BASE STRUCTURE ALTERED
Ulaanbaatar, Mongolia, May 3 /MONTSAME/ The cabinet meeting on Wednesday discussed and then backed in principle a matter on amending a concession contract on constructing, utilizing and transferring to the state ownership a base structure of the Sainshand-Tavantolgoi-Ukhaakhudag railway.
Another issue was about amending a contract, established with special license holders to construct a base structure of the Ukhaakhudag-Gashuunsukhait railway.
Related orders were given to the Ministers and heads of agencies to establish contracts, harmonizing them with relevant laws. These contracts will have clauses about providing national investors with opportunities to cooperate, about openly trading some shares to people through the stock exchange, and about using 51 per cent of the railway stocks during the constructing and utilizing period and passing them to the state without charge when contract time expires.
G.ALTANSUKH BECOMES HEAD OF MINERAL RESOURCES AGENCY
Ulaanbaatar, Mongolia, May 3 /MONTSAME/ In accordance with the cabinet decision on Wednesday, Mr. G.Altansukh was appointed as a head of the Agency of Mineral Resources, implementing governmental agency.
G.Altansukh has graduated the Institute at the State Security Committee of the former Soviet Union and the Management Academy of Mongolia majoring in law and in state administration management. He has a master degree on international relations. He has been working for 26 years in the public service for General Authority of State Security, the Central Intelligence Agency and Mongolia's Embassy in Washington D.C.
THOSE WILLLING TO SELL ETT SHARES MUST MEET DEADLINE
Ulaanbaatar, Mongolia, May 3 /MONTSAME/ A deadline is to be May 20 for those who want to sell to the government their shares of the "Erdenes Tavantolgoi" company at a nominal value.
About this and other measures said T.Gandi, the Minister of Social Welfare and Labor at a regular cabinet meeting on Wednesday.
The cabinet obliged her to conduct a detailed survey of the people who want to sell shares.
Electronic ID Cards Won't Be Ready Before Election
Ulaanbaatar, Mongolia, May 3 /MONTSAME/ On Wednesday, the cabinet gave an order to all Ministers, governors and heads of agencies to work on making governmental activities open and transparent to the public and to improve the state regulations.
- Considered as violating laws and resolutions, some Ministers' decisions were annulled.
- The Minister of Justice and Internal Affairs and authorities of the General Agency of State Registration spoke a course of renovating the ID cards. They added the renovated ID cards will not be delivered to people before the parliamentary election.
- 4,600 tons of seed wheat will be sold to farming companies for the spring sowing. Revenue from this trade will go for creating seed wheat reserves until December.
- The cabinet did not back a draft amendment to the law on administrative units of Mongolia and their administrative officials, and other related draft laws. The drafts have been initiated by Ts.Tsengel MP and others. The cabinet decided to convey some proposals to the initiators of draft amendments to the laws on apartment, on land and on VAT.
- The cabinet backed in principle draft amendment to the laws on rail transport and on anti-alcoholism, drawn up by R.Rash, E.Bat-Uul, Bat.Batbayar and Kh.Temuujin MPs.
- Owned by the General Authority for Implementing Court Decisions, flats in "60-I" and "60-II" apartments, located in Bayanzurkh district, will be given to ownership of families currently living there.
- The cabinet discussed a draft plan on implementing strategic action of ensuring the traffic security for 2012-2020 and decided to issue a governmental resolution.
- It was considered as necessary to join the Agreement for the establishment of the International Anti-Corruption Academy as an international organization.
MSE Daily Market Update: MARKET BOUNCES BACK FROM 2-DAY LOSING STREAK
04 May 2012 (BDSec) – 123,260 shares were traded with a value of MNT 108.3 mln (US$82.4K) as winning stocks outpaced losers by 4 to 1 on the Mongolian Stock Exchange. MSE Top 20 added 289.9 points or 1.43% to 20,494.0. Mongolian stocks closed 1.22% higher for the week.
Aduunchuluun (ADL) soared 8.24% to close at MNT 4,600. Talkh Chikher (TCK), Genco Tour Bureau (JTB), BDSec (BDS) and Zoos Goyol (ZOO) gained 6.94%, 6.59%, 6.52% and 5.99%, respectively. Eermel (EER) tumbled 8.24% to close at MNT 2,650.
Secondary market trading of E-Trans Logistics (ETR) will to kick off on Monday, May 7th.
MSE Daily Market Update: MONGOLIA STOCKS INCHES DOWN, TELECOM MONGOLIA UP 15 PERCENT
03 May 2012 (BDSec) – On the MSE, 56,133 shares were traded with a value of MNT 162 mln (US$123 thous.) as four shares fell for every one that rose. BDS edges down 0.16% to finish at 4,512.26 and MSE Top 20 ended 0.62% lower to 20,204.10.
Telecom Mongolia (MCH) recovered today as the stock was the biggest gainer and closed up 15% followed by Olloo (+7.06%).
Hermes (HRM) lost as much as 8.43% to close at MNT 76. Aduunchuluun (ADL), Zoos Goyol (ZOO), Talkh Chikher (TCK) and State Department Store lost over five percent.
Local News in Brief
- The $3 billion initial public offering of Mongolia's Erdenes Tavantolgoi, previously pushed back from June to the third or fourth quarter, is now planned for the first quarter of 2013, a senior official said.
- Deadline for those who want to sell their shares of the Erdenes Tavantolgoi to the government is to be May 20.
- Turkish Airlines will start direct flights from July of this year in a route Ulaanbaatar-Istanbul-Bishkek.
- The Capitalist Exploits organization will host its first Meet Up and Investor Summit on July 25-28 in Ulaanbaatar.
Монголын Уул Уурхайн Нэгдсэн Лавлах 2013
Монголын уул уурхайн салбарт үйл ажиллагаа явуулж буй бүх уул уурхайн компани, хөрөнгө оруулагч компани, ханган нийлүүлэлтийн болон уул уурхайн салбарт үйлчилгээ үзүүлэгч аж ахуй нэгж, төрийн болон төрийн бус бүх байгууллагын нэгдсэн мэдээллийг хүргэдэг "МОНГОЛЫН УУЛ УУРХАЙН НЭГДСЭН ЛАВЛАХ-2013" номыг дөрөв дэх жилдээ Монголын Уул Уурхайн салбар үүсч хөгжсөний 90 жилийн ойг тохиолдуулан эрхлэн гаргах гэж байна. Тус ном нь гадаад, дотоодын уул уурхайн компани, Олон улсын хурал үзэсгэлэн болон Монгол Улсад суугаа Элчин сайдын яам, гадаад улсад суугаа Монголын Элчин сайдын яамдаар дамжуулан хөрөнгө оруулагч нарт үнэ төлбөргүй хүргэгддэг онцлогтой.
Монголын уул уурхайн салбарынханд бүтээгдэхүүн, үйлчилгээгээ хамгийн хүртээмжтэй хүргэхийг хүсч буй та бүхнийг "МОНГОЛЫН УУЛ УУРХАЙН НЭГДСЭН ЛАВЛАХ -2013" номтой хамтарч ажиллахыг урьж байна.
"Монголын Уул Уурхайн Нэгдсэн Лавлах 2013" Номын гэрээ татах
"Монголын Уул Уурхайн Нэгдсэн Лавлах 2013" Захиалгын хуудас татах
Mongolia prepares for boom in commodities
The London Stock Exchange last week played host to international resources investors clamouring to grab a chunk of the commodity-fuelled economic boom that is sweeping Mongolia.
May 7 (Financial News) Hailed as one of the last frontiers for resources exploration, the central Asian country is thought to have $1.3 trillion in untapped mineral deposits, including coal, copper, iron ore, zinc and gold, beneath its vast deserts and steppes.
Over the past four years, the country's mining companies have ramped up their output, and foreign resources giants are increasingly investing in the region. This year alone, Mongolia will see gross domestic product growth of 17.2%, according to the International Monetary Fund.
But if Mongolia is to enjoy the spoils of its natural wealth, the country's capital markets have to be reformed – starting with its fledgling national bourse.
Founded in 1991, the Mongolian Stock Exchange has 336 listings. Many names are inactive and overall trading on the exchange is thin at just two hours a day. With a capitalisation of $2bn (compared with the LSE's $3.7 trillion) the market is too illiquid to provide a platform for chunky home-grown listings. As a result, several of the country's commodity giants have had no choice but to seek public offerings abroad, with the Australian Securities Exchange and Canada's TMX Group the primary beneficiaries.
Altai Khangai, the Mongolian exchange's 30-year-old chief executive, said: "Because of the lack of sophisticated infrastructure, mining companies haven't been able to gain exposure locally."
Modernisation
The Mongolian government intends to change this. Last year the Ulan Bator-based exchange signed an agreement with the LSE to overhaul the Mongolian market. The London exchange beat off rivals Nasdaq OMX, Deutsche Börse and the Korean Stock Exchange to secure a three-year deal under which the LSE will help transform Mongolia's securities law and regulation, modernise its trading infrastructure, and develop its long-term business strategy.
As part of the deal, the MSE will implement the LSE's technology platform MillenniumIT at the trading, clearing and settlement levels.
Khangai, who was appointed to the role permanently in January, said: "We are in the final stage of testing and expect the Millennium-IT implementation to go live shortly."
Mongolia's parliament is reviewing a draft securities law which, among other things, incorporates elements of the UK's Financial Services Act listing rules and increases transparency and disclosure requirements. "We are bringing in technical but also conceptual changes," said Khangai.
The exchanges estimate that the MSE will notch up $45bn in listings during the next 10 years through the privatisation of state-owned companies and other assets – and the LSE hopes it will get a slice of the action.
The spotlight is currently on state-owned miner Erdenes-Tavan Tolgoi, owner of the world's largest coking coal deposit. The Mongolian company is scheduled to launch a three-pronged $3bn listing – in London, Hong Kong and Ulan Bator – following the passing of the new securities law this year.
Dual listings
Khangai, a former commodities trader and adviser to the Mongolian prime minister, also hopes the government-led reforms will result in several of the nearly 50 foreign-listed international mining companies with assets and operations in Mongolia to seek a dual listing at home. He said: "A dual listing would give these companies exposure to local investors and the local currency. We have had several expressions of interest and a significant potential pipeline. It is also regarded, politically, as the loyal thing to do."
The development of the local market is even more important for non-mining firms, he said, since domestic Mongolian companies that are not part of the commodities boom find it difficult to gain international exposure.
Tony Weeresinghe, LSE Group director of global development and chief executive of Millennium IT, said: "For Mongolian companies, the chance to develop lasting relationships with some of the world's largest institutional investors will kick-start their development and help fast-track the country's already rapid progress."
Currently the exchange trades stocks and government bonds but it is exploring the introduction of vanilla exchange-traded funds, which are growing popular among emerging market bourses.
Xinjiang BaYi Steel: Mongolia Contains 11Bt Iron Ore
May 2 (Steelhome.cn) Xijiang a natural-bounty province located in western China which has proven mineral resources of around 1.19 billion tonnes, is seeing steelmaking activities impacted by ingredient shortage due to lack of large mining and beneficiation plants. This shortage will expand with more steel project coming on stream.
Iron ore supply shortage is indisputable, Mr Cheng Xiang Vice General Manager of Xinjiang BaYi Steel International Trade said, adding both neighboring Central Asia and Mongolia have abundant iron ore resources. 14 major iron ore zones in Mongolia have around 11 billion tonnes.
As far as SteelHome knows, most Chinese steel mills are planning new projects in Xinjiang. According to incomplete statistics, there is over 60 million tonnes of steel capacity under construction or to be constructed in Xinjiang. Compared to the quick growth in crude steel construction in the place, iron ore output can hardly see any real improvement in short term because of iron ore shortage and transportation bottlenecks.
Many steel mills in the region suggest the flow-in of state-run businesses and social capital into iron ore mining and logistics and opening-up of Horgos Port.
According to Xinjiang Steel Association steel production in Xinjiang would amount 13.6 million tonnes in 2012 up by 38% from 2011; steel consumption would be around 12.6 million tonnes up by 25%YoY from 2011.
Quarterly Consolidated Bank Loans Report
April 30 (Mongol Bank) --
GREAT CONSTRUCTION IN GOBI TO BE INTENSIFIED
Ulaanbaatar, Mongolia, May 3 /MONTSAME/ At its meeting on Wednesday, the cabinet gave an obligation to Ministers to intensify an environmental impact assessment in areas of Tavan tolgoi and Oyu tolgoi deposits.
If herder families and their pastures are located on these areas, they will receive compensation, so an order was given to related Minister to study this matter and to create for it a proper legal environment.
The Ministers were also ordered to draw up a proposal on imposing export tax on raw coal and iron ore, and to put into use a checkpoint for trucks at Zamyn-Uud and a 2.3 km paved-road on the border checkpoint in the first half of this year.
A traffic jam at the Zamyn-Uud border checkpoint has been heavy, so it is urgent to expand its area and to tackle financial matters for the construction of 1 km road between the trucks checkpoint and the Chinese Erlian checkpoint and a 8-km road between the complex and the #3 railway trans-shipment terminal. In addition, the cabinet intends to discuss a managerial structure in charge of "Sainshand" industrial complex erection.
The cabinet meeting also considered issues of preparing and training people in connection with the construction works.
SALARY RATIO APPROVED TO ABOLISH DIFFERENCE IN PENSIONS
Ulaanbaatar, Mongolia, May 3 /MONTSAME/ The cabinet made on Wednesday a decision to implement the 2nd phase-measure of pension rise together with modernizing of the salary ratio in order to abolish a difference in pensions.
This year, the government placed a capital in the budget for 2-phased pension rise. Within the first phase, the pensions increased from February 1 this year by 35 thous. togrog.
Thanks to modernizing the ratio, the minimum size of pension, granted from the Social insurance fund, has been fixed at MNT 180,300, the minimum size of the balanced pension--at MNT 145,200. In conjunction with an improvement of the livelihood, this decision came into force on May 1 of 2012.
Now an average pension has reached MNT 222,900, increasing from 165 thousand. This is an increase of 75 per cent against the end of 2011, of 35 per cent against April 1 of 2012, and of 2.3 times against 2008.
By 40 percent, or 63 thousand, has increased the pension of those 193 thousand, or 64 per cent, who had their pensions fixed before the year 1995, and by 28 percent, or 49 thousand, of those with the money fixed after 1995.
ALLOWANCE AND BENEFIT FOR MEDICAL WORKERS IS TO START
Ulaanbaatar, Mongolia, May 3 /MONTSAME/ On Wednesday, the cabinet discussed and approved a decision to grant bonus, allowance and supplementary benefit to medical workers. This decision will come into force on January 1 of 2013.
Allowance and bonus will be given every month to medical professionals and workers, whose professions are registered in the list of poisonous and hard positions, equal to ten per cent of their basic salaries.
The quarterly incentive will be equal to 10-15 per cent of the salaries, to be given to the medical professionals and workers upon their job performance. A supplementary benefit equal to 15 per cent of a minimum salary will be given for every respond to first aid call to ambulance staff and those working for state-owned health organizations.
Jailing Complicates Mongolia Election
May 6 (WSJ) The unusual detention of Mongolia's former president could last until the eve of next month's elections, throwing into doubt his political comeback and dealing a setback to what had been considered a relatively healthy democratic system.
Enkhbayar Nambar was jailed last month on allegations he illegally profited in office. Last week, a judge extended the detention by two months, until days before June 28 parliamentary elections in which Mr. Enkhbayar planned to run.
Mr. Enkhbayar on Friday sent messages to supporters gathered outside the prison in which he pledged to protest his detention by ingesting only liquids, according to his attorney and family members.
They said they have had only limited access to the 53-year-old, and worry that his health is failing.
In Mongolia's 22 years of democracy, Mr. Enkhbayar has been president, prime minister and parliament speaker, a résumé his supporters and foreign analysts say makes him a formidable political threat to sitting politicians, including his most bitter rival, President Elbegdorj Tsakhia.
Mr. Enkhbayar recently formed a new political party and planned to contest himself one of the 76 seats in the parliament, which would give him a platform from which to campaign in next year's presidential elections.
"The only way to stop him was to detain him," said Enkhbayar Batshugar, his 25-year-old son.
The former president's detention was ordered by Mongolia's Independent Agency Against Corruption, which last month alleged Mr. Enkhbayar profited illegally while holding public office, including on the sale of a hotel and misuse of donations to a Buddhist charity.
Mr. Enkhbayar, who was dragged out of his house by riot police on April 13—the incident was shown on live television—hasn't appeared in court or been formally charged.
"All the charges are false and politically motivated," said the former president's lawyer, O. Baasankhuu, speaking by telephone through a family interpreter.
Government officials didn't respond to numerous requests to comment.
Political analysts say the timing of the corruption allegations against Mr. Enkhbayar strongly suggests a link to his effort to return to public life. In an open letter last week, a group of Mongolian lawyers described the former president as a "political prisoner."
Mark C. Minton, who served as U.S. ambassador to Mongolia from 2006 to 2009, said the treatment of Mr. Enkhbayar is "not only an image problem. That's a problem for the credibility of the rule of law in Mongolia."
Election season in historically nomadic Mongolia is often disorderly. In the previous parliamentary election, in 2008, deadly riots followed allegations the tally was rigged. The fallout was a factor in Mr. Enkhbayar's own loss to Mr. Elbegdorj in presidential elections the following year.
The two—both intellectuals, educated abroad and fluent in English—have long-running differences. Mr. Enkhbayar in the past was the leader of a conservative socialist party that traced its roots to Mongolia's Soviet era.
The current president, Mr. Elbegdorj, is the product of a party that came to power rallying pro-democracy street demonstrations. In November he reconstituted the leadership of the six-year-old corruption watchdog that later ordered his rival's detention.
A big source of political tension today is how to distribute the wealth from the country's mining boom among 2.8 million Mongolians.
Economic growth is expected to top 17% in 2012, according to the International Monetary Fund, for the second year in a row.
Issues include defining the role of foreign participants. With the parliamentary election looming, the government has pushed back against foreign investment in the sector, suspending some mining licenses for Mongolian coal miner SouthGobi Resources Ltd., after Aluminum Corp. of China Ltd. offered about $900 million last month for a controlling stake in the company.
A smaller, unrelated deal by the Chinese company a few weeks later was followed by a proposal for a new cap on investments by such foreign state-owned companies.
Corruption case looms over Mongolia poll
May 6 (Financial Times) With parliamentary elections in Mongolia two months away, the capital is humming with campaign preparations.
But in a jail cell on the edge of Ulan Bator, the capital, the situation of a former president charged with corruption threatens to overshadow the vote and highlights the turbulent politics of this young, mineral-rich democracy.
The charges against Nambaryn Enkhbayar make it the highest-level corruption case that Mongolia has experienced since it split from the Soviet Union 20 years ago and are proving to be a severe test of its legal and democratic structures.
Mr Enkhbayar, who had been planning to run for a parliamentary seat in the election, began a hunger strike on Friday to protest against what he says are the denial of basic legal rights, including the right to meet regularly with his lawyers.
"I was illegally assaulted and detained by the rulers of Mongolia's oligarchic government," Mr Enkhbayar wrote in an open letter announcing his hunger strike. The former president believes his political opponents have targeted him because they seek "to hide the crimes they have committed in order to obtain their seats".
Mongolia is one of a small handful of functioning Asian democracies, and its political system revolves around parliamentary elections held every four years – the next is due on June 28 – and presidential elections a year later.
A central issue in this year's election is the management of Mongolia's vast mineral resources, which includes the Tavan Tolgoi coking mine that is due to list in London early next year, as well as Rio Tinto's Oyu Tolgoi copper and gold mine.
Mongolia's anti-corruption watchdog has charged Mr Enkhbayar with three instances of improperly using his time in office to benefit himself and his family, and arrested him in a dawn raid on April 13.
The former president's lead defence lawyer says the case has been marred by procedural irregularities, including a failure to produce a written detention order before the arrest, and plans to ask for the case to be dismissed.
Before his arrest Mr Enkhbayar was among the top two or three most popular politicians in the country, according to independent polls. After leaving office in 2009, when he was defeated by Tsakhia Elbegdorj, the current president, Mr Enkhbayar formed an independent party, which has gained slightly in popularity since his detention.
Polls show Mongolia's two leading political parties will be closely matched in the upcoming election, a situation that can make independent parties powerful because neither major party has enough votes to form a government.
Mongolia has struggled with corruption, and ranks 120th out of 182 countries worldwide in Transparency International's corruption perception index. Privately, many in Ulan Bator say Mr Enkhbayar, regardless of the merits of the charges against him, was not any different from other politicians in that respect.
"Mr Enkhbayar definitely did a lot for corruption in this country to blossom," said Sumati Luvsandendev, a respected pollster and commentator in Ulan Bator. "But those who put him in prison did such a bad job that it upset everyone ... People have certain extrapolations. If an ex-president can be treated this way then how will an ordinary citizen be treated?"
Mr Enkhbayar's treatment by authorities calls into question the strength of the country's democratic institutions, according to Mark Minton, a former US ambassador to Mongolia who worked there while Mr Enkhbayar was president.
"This is pretty rough, even by the rough and tumble standards of young democracies," Mr Minton said, referring to Mr Enkhbayar's case. "Because the process has been so irregular and so dangerous to the defendant, it opens the door to entertaining some political explanations as the why this process is so severe."
Mr Enkhbayar's son, Batshugar Enkhbayar, said on Sunday that his father's health was failing as he entered his fourth day of a hunger strike with no food or water.
"All the accusations against my father are false, and the process of detaining my father broke the law," Batshugar said.
Mr Enkhbayar has engaged Debevoise and Plimpton, a law firm, to help advise on the case, and Lord Goldsmith, the former UK attorney-general, will arrive in Ulan Bator on Monday to assist.
Jailed former Mongolian president in deteriorating health condition
ULAN BATOR, May 5 (Xinhua) -- The health condition of jailed former Mongolian president Nambar Enkhbayar, who began a hunger strike at 7 a.m. Friday (2300 GMT Thursday), is quickly deteriorating, local media reported Saturday.
His chief doctor Tseden-Ish said that the decision on forced treatment of Enkhbayar was made earlier in the day.
Enkhbayar, held on corruption charges, demanded the dismissal of the chief of the Mongolian Supreme Court and the chief state prosecutor and top officials of the Anti-Corruption Agency, who he considered were appointed illegally.
In his handwritten letter smuggled by his lawyers from the jail, the former Mongolian president said that he was "arrested by an illegal order of the current oligarchy regime.
"The oligarchs, who took power through fraudulent elections... illegally detained me in order to hide their election fraud and weaken my struggle against their activities and for a fair election, the demolition of the oligarchy regime and the establishment of an independent legal and judicial system in Mongolia," he said in the letter.
On April 13, Enkhbayar was arrested on charges of being involved in an illegal privatization deal of a hotel and publishing house and of using TV equipment donated to a Mongolian Buddhist organization to form his own television station.
However, supporters said Enkhbayar, head of the opposition Mongolian People's Revolutionary Party, had been framed by President Tsakhia Elbegdorj for political reasons.
Enkhbayar, being held in a Tuv province jail, faces an extension of his arrest for two more months until June 27, just one day before parliamentary elections.
Ts.Nyamdorj Saved by 56% MPP Vote Following Heated Debate
May 6 (UB Post) On May 3rd, MPs discussed the matter of the Minister for Justice and Home Affairs Ts.Nyamdorj's resignation in the plenary session of Parliament. A total of 71 members participated in the session, whereas 40 members deemed the matter as "Needless to dismiss" and 31 members voted to dismiss. 2 MPs of Civil Will Green Party didn't attend the session as they do not wish to become involve with this matter.
The members of the Democratic Party group at the Parliament unanimously defended their position to dismiss the Minister Ts.Nyamdorj, yet they could not get the majority vote. Some Parliament members had submitted a request to the Parliament to dismiss Minister Ts.Nyamdorj with the grounds that the police organization had coarsely violated human rights and ran illegitimate operations during the arrest of N.Enkhbayar, the Head of Mongolian People's Revolutionary Party (MPRP).
The following is the discussion in brief of MPs about dismissing Ts.Nyamdorj.
Ts.Nyamdorj: -Many MPs submitted a request to the Court. It is true that I received General Authority for the State Registration (GASR). I have worked for two months to print new electronic ID cards. But two foreign companies which we signed a contract with postponed the plan because of the technical problem. I don't own those companies.
S.Erdene: -Many issues rise in connection with you such as when you correct the law by yourself without discussing with other MPs and denying that you own personal real estate and claim that you rent an apartment. Because of the law you corrected, Mongolia faces deep damage. Why are you sticking with this position to the death? Are there any cases related with Ts.Nyamdorj that the Independent Agency Against Corruption (IAAC) is investigating?
Ts.Nyamdorj: -Parliament will decide if I will stick with this position or not. I believe that people should save their reputation and further I will work to clear up my reputation. I will give my seat of Minister for Justice and Internal Affairs after conducting the upcoming parliamentary election peacefully, pursuing the order. I didn't violate the law. The MPs who broke the law submitted a request for me to resign.
L.Gundalai: -There is a saying that state policy is measured by the nation's livelihood. Citizens evaluated and scored you. I have spoken to many people and many think that you should resign. Now you should give in and resign in terms of morality. Hundreds of youths were arrested after July 1st incident, but trials of the police officials who are being accused of opening fire are still being delayed. Your party received 13 billion MNT as for the compensation. Is it a just act? You were the Minister for Justice and Home Affairs in 2003 when I was arrested. Where were you at that moment?
Ts.Nyamdorj: - It is right because the law on compensation and amnesty was approved by parliament. On that day in 2003 I was outside the country holding talks with a German counterpart. When I returned in the evening, your issue was fixed and had calmed down.
L.Gundalai: -So do you want to say that I went to the Gants Khudag detention centre because I wanted to? The declaration submitted members of the MPP group in the parliament after the arrest of N.Enkhbayar states "It is wrong for a legal organization to invade others' private property. Thus, related authorities should take certain measures." You are saying that July 1st incident will be repeated again after the upcoming election if you won't be at your position. Some MPs who made request to make you resign , why have they changed their minds?
Prime Minister S.Batbold replied: "Legislative organizations investigated and concluded that Ts.Nyamdorj didn't break the law, and the arrest operation of N.Enkhbayar was in compliance with the law. Any issue is decided by the majority votes. MPs pursued the principle."
S.Erdene: -The MPs who played by the government, returning from the middle of the way should apologize. Why did they sign the resolution to make Ts.Nyamdorj resign if they would change their mind? Ts.Nyamdorj should give his position and go home to Uvs province.
G.Bayrsaikhan: -Ts.Nyamdorj is defeated in terms of morality. However he could keep his seat.
Ch.Saikhanbileg: -Many things happen in 2 weeks. I witnessed how the MPP works and how it protects its members. Members of Mongolian Civil Will Green Party should have arrived at the session and state their positions.
S.Bayrtsogt: -If all the MPs who signed the resolution kept their positions and members of Civil Will Green Party attended the poll, Ts.Nyamdorj would have been dismissed. Issues relating to the MPP won't finish like this. This is not the issue of one person. Many people support MPP and MPRP, but MPP will win the election.
G.Zandanshatar: -We can't blame Ts.Nyamdorj for the electronic ID card printing. MP.Altankhyag is responsible for that.
N.Batbayar: -It seems the benchmark was set that law protects the ones who violated the law. You are the most serious thief in Mongolia. Foreigners are obtaining Mongolia's ground and territory through the law that you corrected.
Z.Altai: -During four years in the Parliament I have never seen such high attendance. Why didn't N.Altankhyag print the electronic ID cards when he was the Deputy Minister? What is a full right of an MP? Some MPs want Ts.Nyamdorj to resign because of the private revenge.
After that discussion MPs voted and Ts.Nyamdorj stayed in the position of Minister for Justice and Home Affairs.
Justice and Internal Affairs Minister is staying
May 4 (news.mn) Plenary session of parliament on Thursday, on May 3, decided not resign MP Ts.Nyamdorj, Justice and Internal Affairs Minister.
Some MPs have submitted a proposal to resign Justice and Internal Affairs Minister Ts.Nyamdorj. MP's explained they proposal "Police has ignored its duty to provide citizens' tranquility and public order when it has arrested ex-president N.Enkhbayar at night of April 12 to 13. Police employees have significantly violated the Constitution and immunities of MPs. Justice and Internal Affairs Minister Ts.Nyamdorj must take accountability of wrong action of politics and ethics".
O.Altangerel: judges are letting a ball into an unguarded goal
May 6 (UB Post) Advocate O.Altangerel, who was arrested after the hearing of Ch.Amarbold due to refusing to act as a lawyer for Ch.Amarbold, relying on court and violating lawyers' rights during the court hearing, was released recently. He was detained for two weeks in accordance with the Sukhbaatar District court decision for his actions of leaving the hearing and refusing to support Ch.Amarbold, the former head of the General Police Office who was involved in the July 1 incidents.
Attorney O.Altangerel spoke to Unuudur newspaper about the issue of the police officials who are related to the July 1st incident.
-Since you have started to defend general major Ch.Amarbold, you have experienced many good and bad things. How many years have you been working as a lawyer and attorney?
-I have been working as a lawyer since I graduated from the School of Law at the National University of Mongolia in 2003 and I have been advocating for 6 years.
-How many people did you advocate and what cases have you faced before? What do you think about why general major Ch.Amarbold hired you to defend him?
-I studies with Ch.Amarbold's son in university. Ch.Amarbold was familiar with me in terms of I am a friend of his son. Besides, he researched that since I have started to work as an attorney I provided legal assistance defending the victims of the savings and credit unions, and worked on the first case of human trafficking in Mongolia. I have been working for him for 4 years.
-You are the third lawyer who was arrested for fulfilling your duty, is this true?
-There are several attorneys who were detained due to the administrative rules because of the conflict. But there are a handful of people who were arrested for fulfilling their duties, advocating the clients. For example, attorney J.Yarinshil who provided the legal assistance to the people who were engaged in the sensational case named after 'doctors'. He was blamed for pleading that his clients were guiltless and was detained. Attorney L.Sanjaasuren, who advocated D.Enkhbat, the suspect for the former Infrastructure Minister S.Zorig's murder case, was arrested for defending his client, for the claim that he revealed state secrets. I know L.Sanjaasuren's son. I know that those people are loyal; they strive firmly for justice. Seeing L.Sanjaasuren's advocacy period and circumstance, I have thought that he worked on S.Zorig murder's case with great bravery.
-I think that there were not enough reasons and evidence to detain you. Previously you spoke to the press and said that you were being pressured. Did you face any pressures in the detention center?
-I am 100% confident when I say that I did not violate the law. I didn't face any pressure when I was detained. But one thing I want to say is that the living conditions and the surrounding condition of people who are being detained under the administrational measurement should be improved. Generally, the detention center has a capacity for 190 people, but the number of detained people has reached 400. Meals for 190 people are being divided into 400. 20 to 30 people are being kept in one tight room. Moreover, the police officials at the detention center work in very difficult circumstance. The number of police official was several times less than the number of detained people. I wonder how those officials work in such severe and overcrowded condition.
This detention center is still being used even though two years ago the General Agency for the Specialized Inspection has reported that this building should be out of the use. It seems like the building, with many cracked walls, could be destroyed in a small scale earthquake.
-The July 1st incident trial is postponed until the related police officials choose their lawyers. Have you met the police officials since you were release from the detention center?
-I have met them several times since I was released. In accordance with the task given from the Authority of Mongolian Advocates (AMA), I am granting assistance in choosing the advocates. Sukhbaatar district court gave the permission to meet the police officials. I provided the information about the advocates' proficiency, skill and experience, and police officials chose three advocates each.
-The case has lingered for 4 years. What do you think about that?
-Both the judge and the defendants should approach the case legally. Let's look back at the past procedures of the case. Judges didn't suspend the case even though the constitutional court accepted the complaint and the dispute was compiled. If they had waited for the constitutional court's decision the issue wouldn't have become that difficult. The constitutional court will make a decision on May 9th.
There was a chance to set the trial on the day after the hearing of the constitutional court's decision. The case is being lengthened because the legal environment of the trial attendants wasn't available. Usually it takes a long time to conclude a case, finishing the hearing and going through the all levels of the court.
-The advocates who worked on the July 1st incident state that the judges are breaking the law. Advocates possess high legal education just like the judges. But sometimes it becomes difficult to know whom to believe when the law on the criminal procedure is being explained in several different ways.
-This is because the laws and regulations pursued in Mongolia are really blurry. For instance there is a law about case suspension. The Constitutional Court states that the case will be suspended in disputes, but there is a law clause about the case suspension in the trial too. There are many problems such as this dispute.
During the trial procedure attorneys and judges have disputes because they are facing issues that have never faced before. Legal science has its own institution, where provisions and clauses cannot be explained in other ways. I am confident that I am advocating in accordance with the law. But we all witnessed what happened in court. I met many experienced Mongolian talented lawyers and attorneys and introduced my works and discussed providing legal assistance for the defendants. I didn't hear any negative or doubting respond. But in the court this situation changed.
-It was clear from the court procedures that the interaction between the lawyers and the judges were conflicted. Do the participants of the trial not have equal rights? Requests and statements made by the lawyers were denied automatically. Does this have something to do with your skills as a lawyer?
-I won't deny that it is connected with skills as a lawyer. Judges should treat equally both prosecutors and advocates. But in this July 1st incident case, judges treated us unequally. When I ask a question to the judges, they didn't give me an answer saying "the Prosecutor has just explained". According to the criminal investigation punishment law it is inappropriate for the judge to side with one of the subjects of the court. It would be like in a football match, where the prosecutor is an offense and the lawyer a goalie and the referee approaching the goalie and telling him not to stop the ball from entering the goal.
-There are many who state that the court procedure that is being carried since March has shown clear signs that the judges support one side over the other. Who has the authority to judge the judges when they make legal violations?
-The higher courts are in charge of monitoring the court procedures. Whatever the court decides, it is clear that there will be an appeal. The decision is for the prosecutors, the prosecuted will appeal again and if it's for the prosecuted the prosecutors will appeal. The preliminary trial hasn't even taken place but the City Court of Ulaanbaatar and General Court has already expressed their positions. The Head of the Court Council is the Head of the Supreme Court. Looking at this, it is clear how it will turn out. The prosecutors and lawyers have started meeting, the court date will be set soon. I hope they learn from their previous mistakes and avoid such issues and that they remember to be fair and just to the court candidates.
-Your statement will run through the Constitutional Court soon, do you think that if they approve of your statement it would have an effect on the court procedure?
-I made a complaint to the constitutional court that the judges are breaking the first and second clauses of the law on criminal procedure's provision № 294 and the provision № 14 of the Constitution. If the constitutional court examines and makes a decision that the judges broke the law, the situation will be different. It would be positive and effective for the defendants if the advocates, who worked on this case for 4 years from the very beginning, would defended the officials until the last level of court decision. But now the situation has changed.
-Will you continue working for Ch.Amarbold?
-We didn't discuss about re-advocating in this case. When Ch.Amarbold chooses his next lawyer, I will give all the materials, documents and notes to the new attorney that I have gathered during 4 years. I am ready to cooperate when necessary.
Republican Party Announces Coalition
May 3 (news.mn) The Republican Party and Labour Party of Whole Mongolia will join a coalition for June 28 election. B.Jargalsaikhan, leader of Republican Party and S.Molor-Erdene, leader of Labour Party of Whole Mongolia a signed an agreement on establishment of National Big Coalition yesterday, on May 2, 2012.
Both parties will nominate 38 candidates each for total 76 election constituencies. The platform of coalition will concentrate on establishment of society with human development and democracy.
"The coalition aimed to correct a mistake done by current ruling political parties. I hope this Mongolians will vote for development of country not for themselves" said B.Jargalsaikhan to journalists.
Senior U.S. military official in Mongolia to discuss further cooperation
ULAN BATOR, May 5 (Xinhua) -- Top defense officials from Mongolia and the United States here on Saturday discussed ways to boost bilateral military cooperation.
At a press conference following his meeting with visiting U.S. Acting Under-Secretary of Defense James N. Miller, Mongolian Defense minister Jadambaa Enkhbayar expressed his satisfaction with the current Mongolia-U.S. military cooperative ties.
He also said the two sides exchanged views on international and regional security issues of common concern, including the nuclear issue on the Korean Peninsula, adding that both sides believe the issue should be solved through peaceful means.
Miller arrived here on Friday for a two-day visit.
The Director-General of the UNIDO will visit to Mongolia
On Monday Kandeh K. Yumkella and G.Zandanshatar will hold negotiation at Foreign Ministry than Kandeh K. Yumkella will meet with Premier S.Batbold at State Palace.
Mongolia to work with world animal health body to combat foot-and-mouth disease
ULAN BATOR, May 4 (Xinhua) -- Mongolia and the World Animal Health Organization (OIE) will work together to develop animal health standards and amend veterinary laws to pave the way for declaring the country's western region free of foot-and-mouth disease, local media said Friday.
Visiting OIE General Director Bernard Vallat, who met Mongolian President Tsakhia Elbegdorj on Thursday, said Mongolia is one of the 10 countries to which the Paris-based agency pays much attention, because of its nomadic livestock herding and high level of livestock per capita.
Therefore, Mongolia has much potential for animal product exports, Vallat said.
He said the OIE has launched initiatives aimed at declaring certain regions of Mongolia, especially its region as "health region."
In order to gain "health region" status, there should be amendments to Mongolia's relevant veterinary laws, Vallat said. After that, the OIE will send analysts to Mongolia and prepare necessary documentation for declaring its western region a "health region."
Mongolia aims to make its western region free of foot-and-mouth disease within the framework of cooperation with the OIE.
The OIE also agreed to work with Mongolia to implement projects supporting its veterinary health sector and improving the health of animals, Vallat said, adding that necessary funding for the projects could be raised through the help of the World bank and other donors.
Elbegdorj said some work should be launched immediately, including the amendment of the veterinary and other relevant laws and regulations.
Mongolia boasts 37 million head of livestock including camels, sheep, goats, cattle, horses. But rural Mongolia is often plagued by animal diseases such as foot-and-mouth disease.
Mongolia Lands 13th Spot on the Digital Investment Attractiveness Index
High Rates of Literacy, Urbanization and Technology Adoption Push Mongolia to #13 on the Digital Investment Attractiveness Index
Boston, MA - May 3, 2012 – Surprises are coming out of the 2012 Digital Investment Attractiveness Index (DIAI), a Strategy Analytics ranking of 87 lower and middle income countries by their potential markets for digital products and services.
According to Tom Elliott, Director of the Emerging Markets Communications Strategies service (EMCS) and principal analyst of the DIAI, "Some countries that have been receiving a lot of international investment, like Pakistan and Nigeria, look less attractive when factors like GDP growth, education, quality of government and access to grid power are considered," says Tom Elliott, director of the Emerging Markets Communications Strategies (EMCS) service at Strategy Analytics. In contrast, sometimes overlooked countries, like Mongolia and Jordan, have very positive fundamental qualities.
The Digital Investment Attractiveness Index (DIAI) was created by Strategy Analytics to provide a single quantitative measure of the relative attractiveness of developing countries as markets for digital products and services. This tool aggregates 22 country-level measures of demographics, economics, business climate, and information and communications technology drawn from public sources and proprietary Strategy Analytics databases.
"With international companies like Telenor and Etisalat writing off billions of dollars of investments because of an Indian court decision, it is clear that closer attention must be paid to the actual risks and opportunities in developing countries," says David Kerr, Senior Vice President of the Strategy Analytics Global Wireless Practice.
Austria to Establish "Resource Alliance"
May 5 (Xinhua) The Austrian Department of Trade and Industry aimed to secure the supply of natural resources to the country by establishing an "inner-Austrian resource alliance," according to a press release issued on Friday.
The alliance is to bring together companies, stakeholders, and economic and political policy-makers to enable easier access to natural resource supplies abroad and to create greater resource-efficiency at home, with a planned start in autumn, said the statement.
As part of the plan, the country's economic minister Reinhold Mitterlehner said it was necessary to engage in "resource diplomacy" with resource-rich countries such as Mongolia, which could provide rare-earth minerals such as tungsten and molybdenum to Austrian companies.
Mitterlehner said talks with Mongolian representatives have been underway, adding that he hoped a bilateral partnership "can be achieved in 2013."
Malaysia Offers 10 Full Scholarships for Mongolian students
May 6 (The Star Online) THE Mongolian government has welcomed a full scholarship offer for its students to study in Malaysia by Limkokwing University of Creative Technology.
Malaysian Ambassador to China and concurrently accredited to Mongolia Datuk Iskandar Sarudin said the Malaysian university would sponsor 10 Mongolian students for a four-year programme.
The scholarship covers tuition fees, meals, accommodation, basic insurance and hospitalisation. The programme starts in September.
Students who pass the programme will get a direct entry into the undergraduate course in business and computer science.
The Mongolian Education, Culture and Science Ministry said that currently, the universities in Mongolia are collaborating with several higher institutions from Germany, the Netherlands and the United States to run 2+2 programmes.
At the meeting with Mongolian Education, Culture and Science Minister Yondon Otgonbayar, the ministry suggested that the university offer three more scholarships to Mongolia's neighbouring countries as their students understand the Mongolian culture and it was also much more cost-effective to do the 2+2 programmes in Mongolia first, followed by Malaysia.
The government will be opening a new education hub 120km away from Ulan Bator to accommodate the 120,000 student population in Mongolia.
The minister welcomed the initiative by foreign countries including Malaysia, to establish a branch campus or university in the proposed hub.
He also proposed that Malaysia conduct training courses in mining so that young Mongolians can enter the job market.
Limkokwing China representative office chief Foong Kah Wai said if the university were to set up a branch campus in Mongolia, it would be more like a resource centre that provides job opportunities and internships as it has strong corporate links.
This is the second initiative by a Malaysian institution after Al-Bukhary International University offered Mongolian students 15 full scholarships for foundation studies at the university for a year.
Related:
Body of evidence gives Malaysia's PM the jitters – The Australian, May 5
Mongolia: shuffling against the shoulders of giants
May 6 (UB Post) The National Bureau of Asian Research (NBR), a leading source of research on Asia in USA, has conducted an interview with an expert on Mongolian and other Asian economies' foreign relations, Alan Wachman. The below interview reveals a keen mind and some insightful observations:
Allen Wagner is an intern at NBR. A recent graduate of the University of Washington, Allen holds a BA in Asian Studies and Political Science.
Since its transition from a single-party Communist system with strong ties to the Soviet Union to a multiparty democracy in 1990, Mongolia has made large strides in its democratic and economic transformation. Now considered one of the world's fastest-growing economies thanks to an expanding mining sector, Mongolia is trying to reach out beyond China and Russia—who have historically considered Ulaanbaatar part of their sphere of influence—to what it calls its "third neighbors," such as the United States and the advanced economies of Asia and Europe.
NBR recently interviewed Alan Wachman, an Associate Professor of International Politics at the Fletcher School of Law and Diplomacy at Tufts University, for insight into Mongolia's achievements and its relationship with Beijing, Moscow, and its third neighbors, as well as into how the United States views Mongolia's role in the international system.
Mongolia has experienced rapid economic and democratic growth since the country's democratic revolution in 1990, following seven decades of Communist rule. Can you briefly describe the path that Mongolia has taken to achieve this rate of growth?
First, it is worth observing that Mongolia—with a population of about 2.7 million people—has a comparatively small economy. The World Bank reports that in 2010, the total value of Mongolia's GDP was only about $6.2 billion. The GDP increased impressively in 2011, by what the Economist Intelligence Unit states as 17.3%, and is anticipated by the IMF and other observers to grow again this year by nearly 15%, a phenomenon driven primarily by the acceleration of investment in the mining industry.
However, in the immediate aftermath of Mongolia's assertion of independence after seven decades of subservience to Moscow, Soviet subsidies—once amounting to about one-third of GDP—dried up and for several years, Mongolia's economy was in recession. Then, despite all the dislocations and difficulties associated with a transition from a command economy to market economy as well as the privatization of resources, Mongolia began to claw its way back to economic stability, but the pace was gradual.
Until quite recently, the economy had been almost entirely dependent on herding and agricultural production. So, severe drought or cold—which Mongolia has suffered repeatedly—exacts a painful toll on the country's economy. Abnormally cold winters cause livestock to freeze and die en masse, destroying the livelihood of herding families and crippling the national economy as a whole. Such was the case early in this decade, when GDP growth was only 1.1% in 2000 and 1% in 2001.
So, the rapid economic growth of which one now reads frequently, as well as projections for continued rapid growth, is largely the result of political decisions made since 2009 to invite foreign investment in the exploitation of Mongolia's vast, but essentially untapped, mineral resources. Mining enterprises from around the world are competing fiercely to secure licenses from the government of Mongolia to extract copper, gold, coal, molybdenum, fluorspar, uranium, tin, and tungsten—access to which has, until quite recently, been severely restricted.
In the past couple of years, Mongolia has already begun to benefit from massive investments, as mining firms and the service industries that serve them have undertaken the establishment of the infrastructure needed to draw minerals out of the ground and transport them to market. Grand expectations of substantial economic growth in the years ahead, leading to the transformation and diversification of Mongolia's economy, rest on how successfully Mongolia will steer clear of the manifold pitfalls of a resource-based economy.
Naturally, the efficiency of Mongolia's democracy, the viability of its legal and regulatory environments, and the transparency and "cleanliness" of its governing processes have had—and will continue to exert—a disproportionate influence over these economic changes. Thus far, Mongolia has achieved much of which it can be proud. It managed to make a relatively rapid, essentially nonviolent transition in the years since 1990, from one-party, authoritarian rule to a multiparty, representative democracy. Neither North Korea—the other former Soviet client state in North Asia—nor any of the Central Asian republics that emerged from the Soviet Union have come even close to doing what Mongolia has done. Indeed, Mongolia now has more in common with South Korea, Taiwan, and the Philippines—Asian states that were part of what political scientists saw as a "wave" of states that undertook the transition from one-party authoritarianism to multiparty democracies in the same period that Mongolia did—than with states that were once dependent on Soviet largesse and subject to Soviet caprice.
Last June, Mongolian president Tsakhia Elbegdorj, visited Washington, D.C., where he spoke proudly of the political transition his state has made. He asserted that in December 1989, at a moment when the Soviet Union was intact and the PRC (People's Republic of China) was still coping with the aftereffects of its violent suppression of the demonstrations in Tiananmen Square, "small Mongolia" dismantled the long-ruling authoritarian regime and, in its place, established the foundations of democracy without bloodshed or "shattering [a] single window." Elbegdorj exclaimed, "Now, my country is becoming the beacon for democratic developments. I call my country the 'democratic anchor in the East.'"
Mongolia has indeed come a long way in about two decades. Legislative and presidential elections have prompted a turnover of party control several times, as well as periods of coalition government. It is telling that on July 1, 2011, Mongolia assumed the rotating chairmanship of the Community of Democracies.
Notwithstanding Mongolia's successes, the transition to democracy has not been problem-free. A still-unresolved murder of a popular democratic opposition leader and an instance of political violence in 2008, when election results were contested by street demonstrators, several of whom were shot and killed by police, have stained an otherwise promising transformation.
Nevertheless, while external observers continue to report concerns about the corrupting effects of venal political figures padding personal coffers at public expense, government accountability, procedural transparency, bureaucratic and legislative efficiency, and rule of law, most Mongolians surveyed about the changes undertaken in the past two decades report a greater satisfaction with their democratic system—warts and all—than with the one-party system under which they suffered in the seven decades that preceded the transformation. Thus, most observers agree that Mongolia has moved beyond the point of no return and that democracy, even if of suboptimal quality, is likely to survive. Of course, one can hope that with greater practice and a generational shift among the power-holding elites, Mongolia's democracy will not just survive, but thrive.
-Since the 1990s, Mongolia has been seeking to build relations with its so-called third neighbors—the United States, South Korea, Japan, and European countries—to balance the influence of its physical neighbors China and Russia. Can you explain Mongolia's "third neighbor" policy and the drivers for this doctrine?
-Mongolia's "third neighbor" approach to foreign relations is driven most forcefully by geography. Mongolia is landlocked and shares borders with only two neighboring states: the Russian Federation and the PRC. As a class of states, those that are landlocked face monumental challenges to development. That Mongolia is bounded by only two states and that those two happen to be communist behemoths, compounds the difficulty that other landlocked states routinely face.
What Mongolia has done reveals a capacity for deft diplomacy that to date has served it rather well. Mongolia's legacy of dependence on one master—for centuries the Qing (Manchu) empire and later the Soviet Union—led it in its independence to seek more balanced relations with its two much-larger neighbors. This notion was enshrined in a foundational document titled "The Concept of National Security," in which Mongolia asserted, "A policy of non-involvement and neutrality shall be pursued in relation to the disputes between the two neighbors unless the disputes affect the vital national interests of Mongolia."
Beyond that, Mongolia has assiduously labored to cultivate supportive relationships with powerful states far afield to counterbalance the modern-day influence of Russia and the PRC. In another foundational document, "The Concept of Foreign Policy," Ulaanbaatar stated its intention to establish "friendly relations with highly developed countries of the West and East such as the United States of America, Japan and the Federal Republic of Germany." The same document continues: "[Mongolia] will also pursue a policy aimed at promoting friendly relations with such countries as India, the Republic of Korea, Thailand, Singapore, Turkey, Denmark, the Netherlands, Finland, Austria, Sweden, and Switzerland and at creating and bringing to an appropriate level their economic and other interests in Mongolia."
So, the heart of Mongolia's "third neighbor" foreign policy is to ensure cordial and balanced relations with its two proximate neighbors, while encouraging other states—many of them established and comparatively wealthy democracies—to take interest in Mongolia's development. Since 1990, Beijing and Moscow have generally respected Ulaanbaatar's independence and—with some trepidation—its relations with other states.
By linking its security to a roster of states other than Russia and China, Mongolia has made clear its intention to act internationally with as much freedom as it can muster from constraints that Moscow or Beijing might wish to impose. Both Russia and the PRC are still rather wary of external powers—notably the United States—setting down roots in states along their borders. The Chinese are vigilant about the prospect of encirclement. Russia seems especially unsettled by the prospect of a democratic Mongolia entangled with powerful Western democracies elsewhere, the United States chief among those democracies.
However, Mongolia's premise seems to be that integration in the world outside its immediate ambit will help assure its security, should that be undermined by the interests, ambitions, or actions of its immediate neighbors. It is not so much that Ulaanbaatar expects its "third neighbors" to ride in to rescue it should Moscow or Beijing impose with military force. If push comes to that particular shove, Mongolian statesmen realize that they may be compelled to revert to an earlier practice and choose an alliance with one of its two neighbors in opposition to the other. Nevertheless, it appears that so long as Russia and China hold each other in check, Mongolia hopes its "third neighbor" approach to security will encourage those external balancers to develop interests—economic, ideological, and strategic—in Mongolia that would significantly impede the effort of either Russia or China to trample Mongolia's independence.
-In 2005, George W. Bush became the first sitting U.S. president to visit Mongolia. The visit was seen as a gesture of thanks to Ulaanbaatar for its support in the war on terrorism, as well as a sign of the two countries' growing closeness. How has the U.S.-Mongolia relationship evolved since Mongolia's democratic transition in 1990? What interests does the United States have in Mongolia today?
-It is true that the visit by President George W. Bush to Mongolia in 2005—albeit only four hours in duration—was then perceived as a capstone to years of courtship and evolving relations. President Bush was, indeed, the first sitting U.S. president to visit Mongolia, even though Herbert Hoover visited in his capacity as a mining engineer in 1899, thirty years before he became president. Interviews with White House officials involved in planning President Bush's trip suggest that beyond any wish to express appreciation for Mongolia's participation in the "coalition of the willing," President Bush—like his father, who expressed a wish to visit Mongolia but never did, and his father's secretary of state, James Baker, who visited twice while in office and twice since—viewed Mongolia through Texan eyes. Thus, Bush apparently expressed an affinity with Mongolia: a place where a vast, rugged land is dominated by proudly individualistic, horse-riding herdsmen.
So, it may be that personal predilections, as much as national interest, played some part in the early receptivity of Washington to establishing relations with Mongolia. By far the greater influence was a sense in Washington that it must support a fledgling democracy growing in the shadow of two communist colossi. In 1921, Mongolia became the world's second communist state. During the late Reagan and early George H.W. Bush administrations, Mongolia showed every sign of turning its back on Communism and authoritarianism and starting down the treacherous path toward liberalization and, ultimately, democracy.
Since the establishment of diplomatic relations in 1987, the 25th anniversary of which is this year, four Mongolian presidents have visited the United States and a roster of prominent American political and military luminaries have visited Ulaanbaatar. Whenever these visits occur, the press and commentariat—both in the United States and abroad—have mused about the nature of U.S. interests in Mongolia.
Both the Chinese and the Russians have concluded that the United States aims to export its values to Mongolia, while drawing Mongolia into the U.S. security network in a way that may be deleterious to Moscow's or Beijing's interests. By contrast, American officials, and most Mongolians as well, assert that the relationship is founded on common values. They dismiss the notion that there is a "Mongolia card" that Washington can play in some grand geostrategic rivalry with Russia and the PRC.
American uniformed and civilian officials point out that Mongolia is entirely bounded by Russian and Chinese territory. Even if Washington was inclined to use Mongolian territory for strategic purposes, it would have to do so knowing that any troops or materiel transported to Mongolia would have to pass through Russian or Chinese territory or airspace, a severe constraint on incautious ambitions. Moreover, in its "Concept of Foreign Policy," Mongolia pledged to "pursue a policy of refraining from joining any military alliance or grouping, allowing the use of its territory or air space against any other country, and the stationing of foreign troops or weapons, including nuclear or any other type of mass destruction weapons in its territory."
If American statesmen are to be believed, Washington is principally interested in Mongolia because of its embrace of democracy, its devotion to economic reform and development, and its intent on acting in a responsible way—contributing constructively to, not just sucking support from—the international system. It is a value-centric approach to international political relations, tempered by a wish to avoid having a "failed" state in Asia as a provocation to chaos.
John Dinger, U.S. ambassador to Mongolia in the period 2000–2003, said in a conversation recorded at the Asia Society in New York, that in the early stages of the U.S.-Mongolia relationship, Washington regarded Mongolia as "the little democracy that could." Beyond that, Dinger asserts, it was in the interest of the United States to support Mongolia because "weak states are more likely to threaten America's interests than great states." Dinger said that the United States "wanted Mongolia to succeed" because "it would contribute to the political stability in…a very rough neighborhood, where two enormous nuclear armed powers and one rogue state, North Korea, meet. It is a good place to have a stable country."
-Is the U.S.-Mongolia relationship today primarily strategic, economic, or both?
-The relationship today should probably be viewed as principally ideological, rather than either strategic or economic. That may strike some readers as fantastic, given the propensity of most analysts to view international politics through the lens of realism. However, it is worth noting that, first, the United States has not sunk much capital into Mongolia, especially by comparison with what Russia and China have donated or loaned to Ulaanbaatar. Beyond that, in the minds of some political practitioners, ideological affinity—if played skillfully—can sound strategic overtones that are useful to sustain in case, at some later date, Washington seeks to transform the relationship for more explicitly strategic ends.
To date, however, even though some observers perpetually imagine that they detect the aroma of strategic intrigue in the relationship, they have not identified the simmering cauldron from which the alluring scent emerges. In an effort to locate the strategic cause for Washington's interest in Mongolia, much has been made of the cooperative defense relationship between the United States and Mongolia. However, according to a report by the Congressional Research Service, that relationship has thus far entailed an effort to enhance English-language education of Mongolian troops so as to allow for greater interoperability with the United States and its allies, as well as upgrading professional military education. Mongolia dispatched troops in ten deployments to Iraq and has been engaged in assisting NATO's efforts in Afghanistan. For instance, in March of this year, 130 Mongolian troops were deployed to Afghanistan, where they will serve as security guards at U.S. installations under Operation Enduring Freedom.
The United States initiated and remains active in a yearly peacekeeping exercise in Mongolia, "Khaan Quest," which involves American and Mongolian troops, as well as those from 30 other nations engaged in peacekeeping. The long-standing effort to train Mongolian troops for international peacekeeping has enabled Mongolia to benefit from opportunities to participate in peacekeeping missions established under the United Nations flag. Since 2002, more than 5,000 Mongolian troops have served in fourteen peacekeeping missions abroad. The United States has also supported an annual joint-military exercise focused on disaster preparedness, known as "Gobi Wolf."
As to economic interests, while these may expand in the years ahead, as American firms gain some share of the mining pie that is now being divvied up by Ulaanbaatar, to date economic self-interest has played a minor role in U.S. considerations regarding Mongolia.
-As mentioned before, Beijing and Moscow have historically viewed Mongolia as within their respective spheres of influence. What effect has Ulaanbaatar's relationship with the United States had on China's and Russia's expectations of whether they can influence Mongolia's economic or strategic policies? And is there any tension between Mongolia and its physical neighbors due to its U.S. ties?
-The most prominent dynamic arising from Moscow's and Beijing's historic associations with Mongolia probably have more to do with Russian resentment of China's commercial and economic dominance in Mongolia rather than any tension stemming from Mongolia's U.S. ties. A still-unbroken Russian habit of imagining itself to be the most influential foreign power in Ulaanbaatar makes Moscow quite frustrated by how deeply the Chinese have entrenched themselves in the trade and development of their mutual neighbor, at what Moscow views as its own commercial expense. It will be interesting to see how this tendency develops once Vladimir Putin resumes his role as Russia's president on May 7 of this year.
Nevertheless, it appears that—for the time being, at least—Moscow is content to have some influence in Ulaanbaatar and is comforted by the knowledge that Beijing does not utterly dictate what choices Mongolia makes. Likewise, Beijing seems confident that Mongolia's need of a ready market for its mining products and an equally ready source of foodstuffs, industrial products, and experienced construction laborers, will ensure a reasonably high degree of deference to the PRC, blunting any possibility that Ulaanbaatar will lean too far toward Moscow in the near term.
All that notwithstanding, the greatest irritant in this otherwise mutually accepted, albeit ephemeral, balance is the role of the United States. For Mongolia, the United States' comparative power, wealth, democracy—and distance from Mongolia—make it a much-valued source of support and security. Of course, Ulaanbaatar is well-aware that the close bond that has arisen between it and Washington is viewed with some skepticism in Moscow and Beijing. There are plenty of unofficial musings by Chinese and Russians online and in print about the nefarious intentions of the United States to export democracy, engage in a form of containment, or otherwise use a relationship with Mongolia to the disadvantage of the Russians or Chinese, even though this discomfiture does not arise explicitly in official public pronouncements by Moscow or Beijing.
As for Ulaanbaatar, it understands well that it must tread carefully, enjoying some fruit of the U.S.-Mongolia relationship, but curbing its appetite for too close a relationship out of concern that it not alienate its two proximate neighbors. Mongolian statesmen keenly appreciate that they must live with and within the implicit bounds imposed by Moscow and Beijing. They have cleverly navigated a perilous course that has enabled them to take advantage of U.S. goodwill toward Mongolia without stumbling over either Moscow's or Beijing's implicit "red lines."
There have been instances in the past when Beijing seemed to express its displeasure at the growing closeness of U.S. and Mongolian military relations. For instance, on occasion the PRC has denied permission for U.S. military transport planes to fly through Chinese airspace to Mongolia. For several years, Beijing turned aside invitations from Mongolia to participate in—or even to send observers to—the annual "Khaan Quest" peacekeeping mission, in which the United States has played a prominent role. Ultimately, Beijing relented and sent a few observers, but swiftly thereafter established its own bilateral peacekeeping exercises with Mongolia.
The PRC has gone overboard in stating its respect for Mongolia's independence, territorial integrity, and sovereignty in almost every bilateral document emerging since the two states reaffirmed their diplomatic relationship in 1994, following decades of tension. However, in interviews Chinese diplomats and think tank analysts have cautioned that Beijing will not sit idly by if Mongolia allows foreign bases to be established on Mongolian territory, or foreign troops to be stationed there. Doing so, they state, would challenge Chinese national security. It seems that these are oblique references to the presumed intentions of the United States.
Likewise, several years ago, Russia chafed at Mongolia's eagerness to accept $285 million from the U.S. Millennium Challenge Corporation to upgrade a portion of the rail in Mongolia, a line that is jointly owned by Russian and Mongolian enterprises—a vestige of Soviet dominance in an earlier era. Mongolia was obliged to turn the funds aside, accepted Russian loans to upgrade the rail, and thereafter negotiated a different use for the sum that Washington was prepared to donate.
These and other signs suggest that on the surface, Moscow and Beijing have no wish to interfere too blatantly in Mongolia's relationship with the United States, but are determined that Mongolia not grow too close to Washington in ways that either the Russian or Chinese government sees as imposing on its own interests. So, while there certainly are tensions in Mongolia's relationship with both Moscow and Beijing that arise from Ulaanbaatar's ties to Washington, both Mongolian and American officials have been vigilant in their efforts to avoid provoking Russian or Chinese sensibilities. Both parties understand that Mongolia cannot escape its geography and that the United States, whatever goodwill it may have toward Mongolia, is not likely to be in a position to shield Mongolia from the wrath of its neighbors, should they be provoked.
-What role, if any, does Mongolia play in the United States' new strategic vision for Asia? How does Ulaanbaatar see the United States' role in Mongolia's future?
-In January 2012, the United States released a document titled "Sustaining U.S. Global Leadership: Priorities for 21st Century Defense," which was widely understood as offering a new strategic vision for the United States. It is unsurprising that the word "Mongolia" does not even appear in that document. The principal focus of U.S. strategic interest in Asia is in the maritime domain, not deep in the Eurasian heartland, where Mongolia is situated. One can see this from the repeated reference within the document to concerns about "Asia-Pacific."
To be sure, there are ample references to "friends and allies," and Mongolia is certainly a friend. In extremis, one can surely imagine ways in which that friendship may be useful to the advancement of U.S. strategic objectives, but one can also imagine how difficult it would be for the United States to exploit such a friendship without exposing Mongolia to countervailing pressures from either Moscow or Beijing, or both. So, I would guess that the United States does not presently expect Mongolia to serve any role in its strategic vision in Asia, other than the one it already plays: a young democracy that shares ideals the United States holds dear, engaged peacefully and constructively in the international community by active involvement in regional and international organizations that promote objectives from which both countries benefit, as well as by sustaining friendly relations with its neighbors, near and far.
As for the role Mongolia hopes the United States will play in Mongolia's future, Ulaanbaatar would undoubtedly look with great pleasure on more substantial American munificence, investment, and attention. Mongolia already derives a degree of moral support from the interest that Washington has taken in its development, but would welcome even more. In August 2011, Vice President Joe Biden visited Ulaanbaatar, which certainly was another tangible sign of American interest, but the United States would have to do a good deal of work to keep up with the frequency of visits to Mongolia by Russian and Chinese political luminaries, and of Mongolian statesmen to Moscow and Beijing.
Some Mongolian scholars have said in private conversations that they hope the U.S. relationship with Mongolia will evolve to be as robust as the one the United States has with Taiwan. In that relationship, unlike the one that the United States has with Mongolia, defense cooperation entails not peacekeeping and disaster relief, but the upgrading of defense capabilities, the supply of military hardware, and an implied determination by the United States to defend Taiwan if it came under attack. For the most part, though, the Mongolian political elite seem to understand that there are limits to how much they can expect of the United States, and how much their two neighbors will tolerate.
Complicating Understandings of Mongolian "Resource Nationalism" Ahead of the Parliamentary Elections
May 3 (Marissa Smith via Mongolia Today Blog) The concept of "resource nationalism" has become prevalent not only within mineral industry and investment communities but also in popular media to describe difficult encounters between global mining companies and local governments. The term has an ominous connotation, compounding the usual sense of irrationality associated with "nationalism" with that of greed. Though it is important to consider the role of appeals to raw emotion such as anger and frustration in electoral politics, I hope to enrich our understanding of current Mongolian electoral politics through the examination of Mongolian understandings of economy and governance that are held throughout the society as a result of long-term processes rather than short-term effects of demagoguery.
I base my suggestions on continuing ethnographic research conducted since 2007 for the most part in Erdenet, but also in Ulaanbaatar and visits to Hentii, Bayanhongor, Uvurhangai and the Altai region. I also base my analysis in no small part to time spent living in and studying Russian society.
Attending to wider understandings of economy and governance may be especially important in the Mongolian context. Enkhbayar's pre-arrest release of documents supposedly revealing discussions between top politicians after the 2008 protests and his televised interview/arrest demonstrate that leaders rise and fall quickly in Mongolia and they require the support not only of business and political elites but the wider population. I am now considering these features of broad support for powerful leaders and their quick changes in fortune through an analysis of power and hierarchy in the workplace and home, but this is beyond the scope of this post. In any case, currently voters seem to be arguing not whether Enkhbayar's policies are sound, but whether he is a criminal or a victim. Either way, many are calling the incident a "show" (шоу). The policy path that Enkhbayar or any other Mongolian leader should take is clear and undisputed for many Mongolians, and not only Enkhbayar is failing to successfully trod it.
As I suggested in a comment on this blog a few days ago, Mongolians are widely unsatisfied with the very measures that commentators most often point to as especially "populist:" nationalization of mineral industries and cash handouts. I will focus on two aspects of Mongolian economic expectations and practice to suggest why these moves are not popular with Mongolians, including perhaps in some contexts among politicians themselves.
1. Soviet legacies: industrial cities and international development with national characteristics
Across generations, professions and income levels Mongolians are today expressing their hopes that Oyu Tolgoi will become the center of a new city as Erdenet did in the late 1970s. Erdenet was planned and developed as a city, with a constellation of smaller industrial units, such as meat processing and carpet making, around a major industrial complex, the mine and mineral processing factory. Planning was carried out by Soviet agencies and Mongolians were trained under Soviet specialists, including from Kazak and Armenian copper mining and processing enterprises. Today Erdenet is by far Mongolia's single largest industrial and economic unit. It continues to be a Russian-Mongolian joint corporaion.
This expectation of a "modern" Erdenet indexes Mongolian ideas of development as not only centrally planned but based around imports of infrastructure and technology executed with foreign assistance. With this in mind, one can see how total nationalization and cash handouts might be viewed as, at best, temporary solutions. Mongolians view their country as needing assistance from more "developed" countries (and their corporations) to develop not only Mongolia's infrastructure and industrial base but also professionals and workers. It is also important to point out that this does not necessarily conflict with wide participation and high valuation of nomadic pastoralism among Mongolians. As socialism itself was viewed to be developed along national lines, so today is industry and now capitalism. Indeed, for the past seventy or so years many Mongolians (and not a few foreigners) have intended to technologically enrich nomadic pastoralism rather than abandon or replace it. Leading to my next point, I would also point out that like industry and unlike service sectors, nomadic pastoralism is based on production of tangibles. Employment in taxi driving, teaching, and medicine on the other hand have ambiguous value.
2. Finance as foreign
Recently, Mongolians have been trying to plan large infrastructure projects and seek foreign partners to provide funds and technology for their realization. The way that Mongolians have been going about the Tavan Tolgoi tenders and IPO and the development of an industrial park at Sainshand suggest that ideas that many international investors hold as universal, at least among business and finance elites, are not sinking in. This is in large part due to a difference between nationally-oriented values and globally or individually oriented ones. But I would also point out that Mongolians largely do not accept the value of "financial products" or speculation (consider not only socialism but also the Manchu period when "predatory lending" by Chinese traders was rampant). It is interesting in this context to note that Mongolian business is dominated by conglomerates such as Max Group, Nomin Holdings, Monnis Group, and Erel Group based on small mines and mineral processing, imports of consumer goods, construction, and processing of raw materials sourced from nomadic pastoralists. Though involvement in insurance by these conglomerates seems to be growing, Erel Bank is exceptional as part of a conglomerate also holding placer gold mines and the Darkhan cement factory, and the Trade and Development Bank, arguably Mongolia's most prestigious financial institution, is headed up by an American. In this context, understandings of highly flexible multinationals that open and close mines as global markets and financial opportunities shift are unlikely to be emotionally positive, and the service and financial sectors that multinationals claim will arise from mining income and replace it are also unlikely to develop. Thus, Mongolian dissatisfaction with the likes of Rio Tinto and politicians working with them are unlikely to be short-term.
With these factors in mind, it is more understandable that Mongolian encounters with foreign investment have been complicated and that Mongolian politicians campaign on platforms that seem simplistic and disingenuous especially to international investors. Mongolian electoral politics is in part based on a combination of highly divergent understandings between Mongolians and the foreign partners they hope to enlist in national projects with a political culture requiring leaders to have wide support and that is accepting of frequent changes in leadership.
About Marissa Smith
Marissa Smith is a PhD Candidate in the Department of Anthropology at Princeton University. She has also studied Russian, Mongolian and anthropology at Beloit College, the Russian State University for the Humanities, and the School for International Training's Mongolia program. Her ongoing dissertation research explores the dual involvement of Erdenet Mining Corporation engineers and workers in both urban industrial spaces and rural pastoral ones to investigate domestic and global economic and political processes at work in Mongolia.
Update on 2012 Election Procedures
May 4 (Mongolia Today Blog) June 28, 2012 could be a decisive moment for Mongolian democracy. One of the important factors that enabled Mongolia's successful democratization compared to some of its post-socialist peers is the trustworthiness of the election results. However, as we all know well, this essential element of a stable democratic system is increasingly being questioned.
This was most vividly manifested by the July 1st riots that erupted against the MPRP, which allegedly influenced the election result in 2008. During the July 1st riot five people were killed by police and hundreds were injured during the clash between civilians and police. Last month four high-level police officials who commanded police during the state of emergency were arrested under the accusation of the abuse of power. Whether the 2012 election will increase the trustworthiness of elections or lead to a vicious circle of political instability is a crucial challenge ahead.
After a series of political negotiation (between the MPP and the DP) and court battles (the Ikh Khural vs. the Constitutional Court), the 2012 Ikh Khural election is set to be organized by a mixed election system. 48 of the total 76 Ikh Khural members will be elected through the single-district, single-winner system or multi-member district majoritarian system. The remaining 28 members will be elected by the party list system. So, ballots will have two sections.
First, there will be the names of candidates who will be competing in a electoral district. Second, the names of political parties will be listed by the order of the year of foundation. So there will be two types of MPs elected through two different systems and there will be no connection between the two systems. The Constitutional Court vetoed the article on 'slipping' in the Election Law of the Ikh Khural on May 2, 2012. 'Slipping' allowed candidates who were defeated, but received more than 28 percent of votes in their electoral districts to be included in the pool of candidates who are in the party list. These candidates would be ranked along with the candidates who are named in the party-list. But, according to the court, this a rather unfair "double opportunity" for some candidates was cancelled.
This week, 11 political parties and two coalitions submitted their platforms for the 2012 election to the Department of National Audit.
The Ulaanbaatar City Khural will use the same mixed election system. 15 of the total 45 Khural members will be elected through the party-list system and 30 seats will be taken by the winners in the single-member districts. This inclusion of the proportional system was a result of recent talks between the MPP and the DP.
While the rules of election have been finally set up, there is a question mark on the organization of election. First, there is much doubt about the reliability of the electronic ballot counting machines that will be used for the first time in this election. The technical reliability and security concerns regarding counting machines are key issues. Secondly, the Government of Mongolia failed to implement a program for digital national identification cards, which was expected to overcome the potential for election fraud.
There has been some significant gap in the estimation of the number of registered voters in Mongolia. One of the accusations against the MPP after the 2008 elections was that it used its control of civil registration to illegally increase the number of pro-MPP voters. Even though voters can check online whether their names are in the official registration of voters, the alleged fraud related to the voter registration often happened in rural provinces. Furthermore, the composition of the central election committee and local committees were always dominated by the members of the MPP and the DP. The equal inclusion of people representing different political and civil organizations should be taken seriously, as well. The role of local and foreign election observers is expected to be equally important, but it depends on the extent to which they are exposed to the details of the process of election. I expect that more foreign election observers will come to Mongolia this year and they will focus more on rural electoral districts than on Ulaanbaatar.
There is a lot at stake in the 2012 elections. The most important of which is how fair the elections are going to be organized so that it will support democratic legitimacy and stability in Mongolia.
Foreigners in Mongolia: Why are we here?
May 6 (UB Post) According to the National Statistical Office of Mongolia, from the last Census conducted in 2010, there are 16,428 foreign citizens and stateless people living for longer than six months in Mongolia. That is to say, 1 in 167 or 0.06% of the inhabitants of the country are foreign.
For some people, the number might seem high. After all they may think that it is comparable to the population of towns like Uliastai in the province of Zavkhan. Nevertheless, the rate 1 to 167 is low; actually it is one of the lowest in the world. Much lower than that of countries like the United Kingdom (9%), the USA (13%) or even that of poorer countries like Nepal (3%), or Turkey (1.8%).
The questions to answer now are: What do those foreigners do? Why are we here? And are they really necessary?
Although in 16,500 lives there can be thousands of different circumstances, the foreigners could be distributed in a variety of groups: members of diplomatic delegations, skilled workers, people related to education, such as teachers, professors, and a few researchers and students, and finally missionaries. To these groups we can also add tourists who, although are not residents, they spend some time (between one day and three months) and lots of money in Mongolia.
Diplomatic delegations
Mongolia has diplomatic representation from about twenty foreign states, one of the lowest in any capital city. In fact, only twelve countries of the G20 have representatives in Ulaanbaatar. Moreover, in the last years, many countries have transferred their diplomatic bodies to China, closing their offices in Mongolia. It is sad to see that most countries have little or no interest in this land. On the other hand, those sovereign states with embassies or consulates in Mongolia, have also different motivations, often far away from Mongolia. For example, what are the real interests of the USA in Mongolia? Certainly, not economic, Mongolian exports to the USA are USD 85 million, just small change. Strategic? Watching two world powers from a close-by is a good thing, no matter the name of the city from which you watch.
A country with no foreign relations is a dead country. Mongolian trade is (still) extremely weak. About 65% of its exportations go directly to China. China could smother Mongolia whenever it wants to. No army, no colonist, they could just stop buying or even paying for coal. With basically just one partner, Ulaanbaatar is in a desperate need to have more bonds with more countries. Are, then, those foreigners necessary in and for the country?
Skilled workers
It is no secret that the economy of Mongolia basically depends on mining. Although this country is very rich in resources, they are not at site. Often it is very difficult to detect them, and once found, it is extremely hard to extract them. A large amount of specialty knowledge and experience are required in any case. But Mongolia is a relatively young country with high level of primary education and low level of higher education. In a nutshell, there are not enough really qualified engineers, specialists, and other skilled workers to carry out that enormous task. Thus, there are only two possibilities left; importing foreign specialists while preparing Mongolians to do the job, or forgetting about extracting more resources, sinking the country.
Why do foreign skilled workers come to Mongolia? The answer is obvious in most cases: for money. They come to do a hard and often dangerous work. That is the same reason why they were working abroad, in their countries, and that is the same reason why Mongolian specialists do the same job here or in other countries. Nobody can expect that an engineer, just for being a foreign citizen from a rich country, come to Mongolia to work for free.
Nevertheless, those in the mining sector are not the only skilled workers in this country. We must add hundreds of doctors, nurses, veterinarians. Many of them do not get money in exchange of their services to the Mongolians, but they are here, saving people and animals (the other resource of Mongolia).
Are those foreign skilled workers necessary or just a burden to Mongolia?
Educators and students
This is probably the most heterogeneous group of foreigners. Knowing how the world works, and following the steps of the ancient Khans, the successive Mongolian democratic governments are investing in education. Mongolians must be able to speak not to stammer different languages, to be able to build houses, to repair machines, to produce, to be fully prepared for this world. But once again, Mongolia has no capacity to carry out this task. Local teachers, especially foreign language local teachers are often unable to do their job. They are not fluent in the target language, they don't know how to teach, they are not prepared for that job. The temporal solution to that problem is again abroad.
As a new generation of local competent educators is formed, foreign teachers are required to teach students and to teach local teachers as well. Strategies, ways of teaching, and even regular subjects are unknown by many of the locals.
There is not a third way having an isolated country full of partially competent people with few chances here and absolutely none abroad, or making Mongolia a modern country and its inhabitants proud holders of their nationality no matter where they are; or making a country of competent workers or keeping the status of a nation whose members go to the West, because of the lack of possibilities here, mainly to get married or to do low-prestige works such as cleaning Chinese restaurants.
What moves a foreign teacher to come to Mongolia? Some of them come attracted by its exoticism, while some others are eager to help a developing country like this. Although there may be a handful of teachers and professors who live in Mongolia because of the money they get, they are just that, exceptions. For most of the other teachers, being here does not represent any economical advantage. To illustrate it: a foreign teacher in Korea earns a minimum of USD 2500 (3 million tugruk), the same job in Europe or South America would receive a pay of more than USD 4000 (5.3 million tugruk), in Mongolia, some lucky teachers of some private schools get about USD 1000 (1.3 million tugruk), obviously the pay in the rest of schools and universities is much lower, and the working conditions and attitudes towards them are not comparable to those in their home countries. In fact, the pay of a foreign teacher in Mongolia is similar to that of supermarket stock boys in Britain, Ireland, the USA or any other country where most teachers come from.
However, we must not forget that many of the foreign teachers working in this country come for free, as volunteers. In fact, teaching in Ulaanbaatar or any of the other locations in the countryside costs them about USD 400 each week, adding to it the amount of the air or train tickets to arrive here.
In the same category, there are some students, mainly researchers. They are here because they love Mongolia, its language, its traditions, its history. They want Mongolia to be known in the world. They spend here months or even years in bad conditions, spending their money in behalf of this country. Thanks to those students and researchers, Mongolia is becoming known in the world.
Missionaries
The last general group of foreigners consists on those who are working for religious organizations, most of them Christians. Christianity was one of the main religions during the time of the Khans. Actually, there was a Christian quarter in Karakorum, the only real city in Mongolia, where foreign and Mongolian Christians lived.
In general those missionaries come here because they believe that their religion is good for people and want to share it. They don't get any money, as far as I know, for coming here and they don't gain anything. Just think, what does any church get if all Mongolians belonged to it? In fact it could be burdensome, for having to send money and aid to three million people.
One may agree or not with those religions, but the fact is that nobody is under the obligation of accepting any creed. Nowadays about 5% of the population belongs to the Christian churches. Are those people the ones who want missionaries here? Moreover, those foreigners are often working for free as doctors, teachers, or giving any other necessary service to this country since there are not enough local people to help Mongolians.
Conclusion
16,428 foreign citizens in a country of 2,755,000 inhabitants; 0.06% of the population. Is that too much? Should the foreigners be expelled from the country in the name of national security? If so, what should the rest of the world do with the 107,500 Mongolian nationals living abroad?
We must recall that an overwhelming majority of those Mongolian emigrants are not properly qualified workers and are not really necessary for the countries where they live in. However, those emigrants work hard abroad in low-prestige jobs. They try to save some pounds, dollars, forints, koruna or whatever currency they use so that their children can receive a good education and get good jobs in Mongolia.
They don't want their children to go to London, Budapest or Prague with a "toy diploma" of any Mongolian university to clean restaurants while people, to be polite, greet them 'Ni Hao!'. They want a developed Mongolia, a modern competitive country, like Japan. They want Mongolia to be known by its quality of life, like Korea. They want Mongolia to be known by its triumphs in sport and science, like China.
Mongolia has a past, a remote past. Genghis Khan died eight hundred years ago and he will never return. However, there are about three million Mongolians living today. It is time to look towards the future, not forgetting the past, and start creating new Mongol heroes.
Since the country is not fully prepared yet, there are thousands of foreigners ready to assist it, and thousands of foreigners who accept working here, happy to share their knowledge and experience, which will help the development of the nation. They will come as far as they are welcomed.
The resources in the ground of Mongolia are attractive. Not developing the country may suppose that one day, not so far away, the Mongolians may wake up under the foreign flag of a once neighbouring country, living in a ger in the dirty outskirts of Ulaanbaatar or of any other Mongolian city since the buildings are occupied by millions of colonisers. They will have to write in strange characters and speak an alien language. Many Mongolians would remember the days when there were only 16,500 foreigners who had come to help the country to develop.
'Ninja' miners in Mongolia
May 4 (People's Daily Online) --
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"Mogi" Munkhdul Badral
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