Institutionalized Role for State in Emerging Resource Economies

By Julian Dierkes

The workshop on “The State’s Role in Large Resource Projects” CIRDI recently co-organized with the International Cooperation Fund of the Mongolian Ministry of Foreign Affairs was designed as an opportunity for Mongolians to share their experience in mining governance with international delegates (from Afghanistan, Kyrgyzstan, Laos and Myanmar), but also to spur discussions among Mongolians about the political and organizational decision that have been made on the state’s involvement in mining projects through State-Owned Enterprises (SOEs).

One aspect of the workshop that definitely worked was to expose the different approaches that countries are taking to the resource sector. In sociological parlance, these approaches seem to be highly institutionalized, meaning that they are governed by a set of taken-for-granted, implicit rules that show up as a striking uniformity across a population even when not explicitly mandated by laws or regulations.

Put very simply, these five resource economies take fairly different approaches to the state’s involvement in the resource sector. The contrast is particularly stark between Kyrgyzstan, Mongolia and Myanmar, while the Laotian resource economy seems to be mostly small scale and a bit of a mix of different governance models, and Afghanistan’s resource sector is still emerging from decades of civil war.

Patterns in the State’s Participation in the Mining Sector

For the three somewhat more developed resource countries, the pattern appears to be the following:

  • In Kyrgyzstan, direct state participation (investment and operation) in the resource sector is a given. Whether or not this is best understood in a post-Soviet political economy or rooted in other factors, Kyrgyz delegates were very clear that SOEs are the dominant model, but that these SOEs are also comprehensive enterprises in the style of a state socialist Комбинат (note that even Wikipedia acknowledges Erdenet’s status as an all-encompassing company-cum-town-cum-conception-of-modernization). Кыргызалтын‘s holdings thus include a health resort and a transport company. Governance issues have been a source of friction with Canadian miner Centerra Gold (also active in Mongolia, of course), around the Kumtor mine.
  • In Mongolia, Erdenet is the example of a state-operated and fully-integrated-into-policy project, while the model in the past decade has become to have minority stakes in resource projects. This taken-for-granted position has been enshrined in law through the designation as “strategic assets” that automatically trigger a state equity stake, but it has also been institutionalized in political discourse where only private sector representatives (foreign and domestic) seem to question it. The on-going turmoil around the co-ownership with Rio Tinto (via Turquoise Hill) of Oyu Tolgoi illustrates some of the governance challenges this poses, though Erdenes Mongol (the state holding company for assets other than Erdenet) is eagerly “normalizing” its position as a corporation, rather than a specific form of an SOE.
  • A foreign caricature of the Burmese resource sector would refer to (military) crony capitalism, Chinese investments, and a giant oil sector. But, the highly institutionalized form of government investment in the resource sector in Myanmar are production sharing agreements (PSAs). As a tool, these are very common around the world (including in Mongolia’s Dornod oil fields) in petroleum production, but not very common at all internationally in mining. PSAs are, very clearly, highly institutionalized in Myanmar.

Learning from Comparisons

The most fruitful discussion (in my mind) around these institutionalized alternatives for public participation in mining investments came around the Kyrgyz-Mongolian comparison. Clearly, The Kyrgyz and (Russian-speaking) Mongolians were very comfortable speaking to each other right from the beginning. A shared cultural history and legacy of nomadism and state socialism as well as a sense of common challenges reinforced this initial comfort through discussions. As one of the Kyrgyz delegates noted very memorably, “95% of the questions that you’re asking (in Mongolia), are the same questions in Kyrgyzstan”.

Yet, as the discussion showed, some of the answers are remarkably different. Mendee has been telling me for some time now that Erdenet is much more important to understanding contemporary mining governance, but also contemporary politics than is generally appreciated. As I mentioned above, Kyrgyz participation of the state in the resource sector follows a similar pattern to Erdenet. Yet, despite Erdenet’s apparent successes (long-lasting production, the creation of a mining city that has grown into a viable and livable (perhaps distant) alternative to Ulaanbaatar), this is not the pattern that Mongolia has followed over the past 20 years. In part, the alternative pattern grew out of the destitute mid-1990s when state investment was simply not a (financial option) and the door was flung wide open to foreign investment. By the time more serious governance questions arose in the negotiations over an OT investment agreement, perhaps notions of free markets had been ingrained enough that the pendulum only swung back to a financial minority investment, namely the current structure of stakes in “strategic deposits”. I don’t know enough about post-Soviet Kyrgyzstan to guess at the political economy of projects there with independence and its aftermath, but the paths between Kyrgyzstan and Mongolia have clearly diverged.

Best Practices?

As is often the case with highly institutionalized models, aspects of these models “make a lot of sense”, but when we step back for a broader/deeper analysis, it is not clear that there is much to recommend one model over the other. Clearly (and as emphasized by Matt Genasci in the workshop) different ways to participate in the resource sector offer different opportunities but also come with different risks and costs. While all forms of ownership can be mimicked by taxes and other regulations, ultimately, decisions about different governance models are made within the context of specific political economies. No well-meaning and unfathomably comprehensive (big data and AI, I’m looking at you) analysis can make the final decision on what model might fit a country best, so that institutionalized responses to the question “how does the nation benefit from resource endowments?” differ across different national contexts.

It certainly seemed that the workshop provided a meaningful opportunity for dialogue between international delegates and Mongolians, but also among the Mongolians that perhaps pointed to some of the consequences of choosing particular models and thus strengthens resource governance in a small way to lead to better decisions that lead to more equitable distribution and thus alleviation of poverty through the development of natural resources.

Posted in Afghanistan, Canada, CIRDI, International Cooperation Fund, Kyrgyz Republic, Laos, Mining Governance, Mongolia and ..., Myanmar | Tagged | Leave a comment

New to Ulaanbaatar in May 2016

By Julian Dierkes

I’ve been keeping a list of things that are arriving to/disappearing from central Ulaanbaatar: December 2015 |  May 2015May 2014October 2013.

I’ve copied the 2014 and 2015 lists here and am adding to it. New items since previous posts appear in italics.

What has arrived?

  • sadly, Louis Vuitton, KFC, Burberry Kids and Ugg
  • Mini, Bentley
  • child seats
  • sidewalks
  • parks
  • farmers’ markets
  • yoga
  • dogs on leashes
  • Sunday morning joggers and bikers
  • burgeoning coffee culture
  • river walkway along the Dund River (under construction in May 2015 but looking very promising)
  • city park along the Tuul
  • sports cars
  • organic shopping
  • gated communities (virtually all the new developments towards and in Zaisan)
  • wheelchair accessibility (moved from “What Will Appear” category as ministries are now (meant to be) wheelchair-accessible

Wheelchair accessibility arrives in #Mongolia. Note the ramp to the side entrance of the Ministry of Foreign Affairs.

A photo posted by Julian Dierkes (@jbdierkes) on

What has disappeared, or at least nearly?

  • stationary 80s-office-phone-looking old-granny cell phone booth
  • for-pay scales (actually, they seem to be hanging on)
  • free WiFi on Sukhbaatar, er Chinggis Khaan, er, Sukhbaatar Square
  • Sukhbaatar Square, er, Chinggis Khaan Square
  • open gullys/missing manholes
  • street kids
  • packs of dogs
  • smoking
  • the sixth-floor souvenir shop at the State Department Store (though perhaps seasonal)
  • oversized sunglasses for women that were so popular across Asia (?) some years ago
  • Nescafé (see above on coffee culture)
  • surprise at seeing bicycles
  • hillside Chinggis visible from the city centre

What will appear in the future

  • navigation systems
  • bike lanes
  • new airport (apparently)
  • subway (really, I wish they had selected light rail instead)
  • Harley-Davidson
  • urban renewal and historical restorations embracing district north of government house (National University of Mongolia, German embassy, etc.)
  • road signs in the countryside (and not just the very random, very occasional ones that can be found now)
  • street names and signs in the city
  • network of cross-country riding trails (though not in central Ulaanbaatar)
  • parking (meters)
  • Combined Heat and Power Plant #5 (yeah, right!)
  • hipsters discovering УАЗ (minivan and jeep)
  • Canada Goose, Arc’teryx.

What will disappear in the near future

I’m going out on a predictive limb here… 2-3 years is what I mean by “near future”.

  • stray dogs
  • stretched-out hand to signal for a car ride
  • that awkward extra half-step on most stairs
  • whitening make-up.

What will disappear in the medium-term future

I mean around 7 years or so.

  • new (to Mongolia) cars that are right-hand drive
  • the neo-classical Ministry of Foreign Affairs building, with its Stalinist (if that’s an architectural style) spire

Tough call to make as the MFA building is now dwarfed by its own annex.

  • deels in the city
  • some of the downtown university campuses
  • buildings of 4 floors or less in the urban core
  • Russian minivans (УАЗ452) but see above.
Posted in Curios, Social Change, Ulaanbaatar | Tagged | Leave a comment

ICF Workshop “State’s Role in Large Resource Projects”

Co-organized and co-hosted by

International Cooperation Fund
Ministry of Foreign Affairs
Government of Mongolia

Canadian International Resources and Development Institute

May 16, 2016, Monday

“State Participation in Mining: Global Trends and Perspectives” Matthew Genasci, Mining Policy Group LLC

Panel One: Political and Executive Perspectives

H.E. R. Amarjargal, Member of Parliament, State Great Hural of Mongolia

H.E. S. Oyun, Member of Parliament, State Great Hural of Mongolia

Panel Two: Perspectives of the Executives and Operators

Ch. Otgochuluu, Chief Economist, Erdenes Mongol LLC

D. Galbaatar, Deputy Director, Erdenet Mining Corporation

M. Otgonbayar, CEO, Baganuur JSC

M. Bayanmunkh, Director, Strategic Policy and Planning Department, Ministry of                                                     Mining

Panel Three: Participating Countries’ Presentations

Masouma Zargar, Senior Policy and Program Adviser,
Ministry of Mines and Petroleum, the Islamic Republic of Afghanistan

Boobekov Kudaimende, Head of Subsoil Protection and Mining Industry Office of State Agency of Geology and Mineral Resource, the Kyrgyz Republic

Abdrakhmanov Sagynbek, Vice President, Kyrgyzaltyn JSC

Vongthong Thimahaxay, Assistant Director of Mines Safety, Health and Environment Division, the Lao People’s Democratic Republic

Kyaw Zin Oo, Assistant General Manager, No. 1 Mining Enterprise, the Republic of the Union of Myanmar

Zarni Myint Maung, Metallurgical Assistant, No. 2 Mining Enterprise, the Republic of the Union of Myanmar

May 17, 2016, Tuesday

 “State Participation in Mining: Economics and Alternatives” Matthew Genasci, Mining Policy Group LLC

Panel Four: Perspectives of Private Industry

N. Algaa, President of Mongolian National Mining Associations

G. Battsengel, CEO, Energy Resources LLC

Dr. D. Bat-Erdene, Board Member, Mongolian Society of Economic Geologists

M. Tulgat, Khishig Arvin LLC

“Findings of the Corporate Governance Study on the Mongolian SOEs” D. Bailikhuu, Advisor to Prime Minister on Privatization and Restructuring

Panel Five: Perspectives of Civil Society

N. Dorjdari, Mongolia Country Coordinator, NGRI

D. Erdenechimeg, Manager for Governance Program, Open Society Forum

B. Tuvshintugs, Director, Economic Research Institute, National University of Mongolia

Dr. M. Dagva, General Director, QMC LLC

Posted in Canada, CIRDI, Erdenet, Governance, International Cooperation Fund, Mining, Mining, Mining Governance | Leave a comment

Information about CIRDI’s Mongolia Project

By Julian Dierkes

iPolitics’ James Munson recently published an article that is critical of the Canadian International Resources and Development Institute (CIRDI) in a number of important aspects: project selection, information about projects, and broader issues about Canadian development assistance, and links with economic interests.

Given my involvement in CIRDI’s IMAGinE Mongolia activities, I tried to offer some comments on these criticisms on the iPolitics website, but was rebuffed by commenting technology, so I reproduce these here:

Munson raises several important and interesting questions in this article, questions that come up repeatedly in conversations among academics such as myself, and staff who are involved in CIRDI programs.

In my case, I am involved in the Integrated Management and Governance in Extractives (IMAGinE) Mongolia project. Note that Mongolia is a country of focus for Global Affairs development assistance.

Our activities were approved as a CIRDI project late last year. After we had submitted a proposal for these activities, the proposal was reviewed (following CIRDI’s selection guidelines) and we received a lot of feedback on our proposal that looked very similar to the kind of feedback I would expect to receive on an academic paper, for example, anonymous reviewers who questioned various aspects of our proposal, from assumptions to methodology, and feasibility, etc., but also ultimately recommended approval.

While our Mongolia activities are still ramping up (I’m writing this comment from Ulaanbaatar in fact) our project team is eager to share information and lessons from our project, and to share these with beneficiaries in Mongolia and beyond, as well as with the Canadian public and academic colleagues. We want to communicate about the impact of our project activities in the same way that we’re eager to share and disseminate the results of our research as academics.

As I have long collaborated with graduate students in maintaining a blog focused on contemporary Mongolia, Mongolia Focus, we are adding some of our observations about our CIRDI activities to this blog as well, to complement the information that is provided on the CIRDI webpage. Note that we’re intent on “thinking out loud” in these posts (as is appropriate to a blog, I think), not to provide definitive answers or conclusions. As we are expanding our IMAGinE activities, we are continuously looking for indicators of the impact that these activities are having. We will also continue to share aspects of this impact measurement in blog posts as this is an area of direct interest overlap between academic research and development interventions.

I believe that the involvement of several Mongolian graduate students strengthens our project significantly in terms of an appreciation for the Mongolian context we’re operating in, but also in terms of conducting activities that meet requests by and needs of Mongolians. Of course, we have also solicited input from Mongolians more broadly on the specifics of our activities through needs assessments. Mongolians are able to make their own decisions about resource-led and other economic and social development, and we aim to provide them with more and better information to analyze the choices that they have in making policy. Ultimately, in a democracy like Mongolia, better information will allow citizens and policy-makers to make more robust decisions which will allow them to address poverty and inequality through development that they deem appropriate and want.

Beyond the immediate aims and activities of CIRDI and my involvement in these, Munson and some of the critics he includes in his article raise questions that are important to ask about Canadian development assistance more broadly. I find the lack of access that Canadians have to information about publicly-funded development projects surprising, to say the least. Yes, broad outlines of projects can be found, but information about specific activities is generally not made available by development organizations. Maybe Canada’s leadership in the International Aid Transparency Initiative will bring some change in this regard.

Global Affairs’ reporting requirements could do with significantly less bureaucracy and be reconfigured toward greater openness about process and impact that would be of interest to at least some Canadians, I think. More open policy-making is something that the Liberal government aspires to, and it seems to me that development assistance is an area where that openness could improve policy-making significantly, including by deepening the conversation about criteria for selection of target countries or target sectors as well as a discussion of specifically Canadian contributions to global poverty alleviation and, now, the Sustainable Development Goals.

iPolitics reported that a development policy review is imminent, so I hope that many of these discussions will be raised in that context. I certainly am eager to contribute to such discussion.

Posted in CIRDI, Development | Tagged | Leave a comment

With Changes to Electoral System, What Outlook for Mongolian Democracy?

By Julian Dierkes

As parliament has accepted the high court rejection of proportional representation, some options remained, particular a postponing of the election or a reversion to the 2008 block-voting system. It now seems that a return to the 2004 system (76 majoritarian ridings) is more likely.

In this context, I’ve offered some thoughts about the implications of the upcoming election beyond immediate outcomes at The Diplomat.

 

Posted in Constitution, Democracy, Elections, Governance, Ikh Khural 2016, Party Politics | Tagged | Leave a comment

How popular is Russian in Mongolia 26 Years After the Fall of the Soviet Union?

By Bulgan B

The May 9th Victory Day has revived the Mongolian love for Russia once again. Mongolians were watching the Victory Day parade and Mongolian social media was trending on any story which relates to the Great Victory. Wreaths were laid at the monuments of Zaisan hill in Ulaanbaatar, remembering the Soviet soldiers who defended the world from the Nazis. The case of the Lavrov jeans is forgiven and forgotten. Although I didn’t plan it to coincide with May, my quick poll on Russian language use in Mongolia seems nicely timed.

thediplomat_2016-04-18_20-44-18-386x282

Russian Minister S. Lavrov’s dress code for official welcoming on his visit to Mongolia in April, 2016 attracted many discussion around Russia Mongolia relationship.

The Russian language has been revered as a language of class, education and identity in Mongolia. A quick (social media) poll to the question “In addition to your mother tongue Mongolian, what other language do you speak/use?” suggests English is taking over from Russian as the preferred second language in Mongolia. However, Russian language holds a strong root in Mongolian society and culture. Considering the rise of China globally and the China-Mongolia relationship it is interesting to note that the Chinese language did not quite make it to the top 5 foreign languages in the poll.

 In order to group the Russian-speakers by generations (with the aim to examine a hypothesis that new generation is choosing other foreign languages over Russian) I ran parallel polls on Facebook and Twitter and asked  participants which generation they belong to. The majority of  participants were from the 1970s and 80s with a total of 61 out of 85. The number gradually declined in the 90s represented by 16 and 2000s with 1 participant. Surprisingly, a low number of 7 selected the 60s (in opposition to my guess  that older people are more likely to know Russian). But this could be explained by the fact that many from this generation do not use Facebook as a main platform of engagement.

table for russianRussian still is a very useful language to establish connections and make friends with the people who are running the show in Mongolia, as those generations from 60s to 80s are in decision-making positions in the government and business sectors. But for Mongolians, I think we should learn our Mongolian language well, and then as boastful as we are of our linguistic abilities, we could learn (at least) Russian, Chinese and English to survive and thrive as Mongols.

 

Posted in Bulgan Batdorj, Education, Foreign Policy, Kazakhs, Nationalism, Russia, Social Change, Society and Culture | Tagged | Leave a comment

Mongolia in the Panama Papers

By Julian Dierkes

Since the #PanamaPapers scandal broke there has been speculation about any Mongolian entanglements in the dealings of the Mossack Fonseca law firm. With the release of further information on May 9, that speculation has been fed by some limited bits of information.

As deplorable as the seemingly endemic nature of corruption is in Mongolia, it’s also very unfortunate that most discussions of this challenge veers into conspiracy theories, rumours, and accusations. The quality of discussions about corruption, nor the evidence of actual corrupt practices has continued to decline under the DP government which had come in with many rhetorical pointers to anti-corruption.

I do not intend to contribute to any kind of rumour-mongering with this post, but I do want to consider the implications of the appearance of some names in the PanamaPapers.

I should thank UBC PhD student Damdinnyam for reminding me of the release of the data and thank some Twitter followers also for helping me identify some of the names that have popped up, and understanding the implications.

Prominent Names that Appear in the Panama Papers Release

Depending on how the search on the ICIJ database is configured, somewhere around 40 names linked to Mongolia appear.

The temptation is to search for recognizable and prominent names first and, perhaps not surprisingly, some such names can be found.

Caveat: Offshore ≠ Illegal

However, it should be remembered that appearing in the Panama Papers is not an indication of anything illegal at all. All it suggests is the existence of a tie to an offshore company. There may well be legitimate uses of offshore companies that involve complex investments in multiple jurisdictions and they need to move capital associated with these investments around. However, there are also many other uses that may be technically legal, often euphemistically referred to as “tax planning”, but surely contravene the spirit of tax law that generally structure taxation to be fair and to include (dis)incentives for certain kinds of economic or other behaviour such as investment tax credits, etc. In the case of legitimate use of offshore companies, it would certainly behoove individuals associated with such companies to explain what legitimate use this investment was aimed at.

I acknowledge that I’m approaching the question of the existence of offshore companies with some preconceived notions about these structures. I also acknowledge that in my interest in the nature of these financial investments, I may be engaging in some relative balancing of the right to privacy of individuals (such as those named here), and the (public) desire to understand mechanisms that may be used for corrupt and other illegal purposes, especially when corruption is seen as such a significant problem in the Mongolian context. Individuals and their right to privacy should be borne in mind, however.

As the disclaimer on the Panama Papers website states:

There are legitimate uses for offshore companies and trusts. We do not intend to suggest or imply that any persons, companies or other entities included in the ICIJ Offshore Leaks Database have broken the law or otherwise acted improperly.

Names

The four most prominent names that appear in the database are:

Again, all these individuals should be considered innocent in a legal way until any evidence emerges that there is anything illegal or underhanded about the companies they are involved in.

In Chuluudai’s case, the relevant company, “Strategic Mines” seems to have only existed from June 2011 to November 2013.

Batbayar is associated with Abros Co which appears to have been set up in Aug 2007 and is listed as “active”. Note that Aug 2007 is almost a year before Batbatar was elected to parliament in 2008 and served until 2012.

Bum-Erdene is associated with the same Abros Co. Seeing as it is listed as “active” his association with the Financial Regulatory Commission makes this connection particularly curious.

Bayar’s daughters are associated with Linnock Holding which existed for a year, Oct 2014 to Oct 2015, and Gold Wellen Inc which existed from Aug 2013 to Oct 2014. This is long after Bayar’s prime ministership.

Questions

Where offshore companies are used for illegitimate and perhaps illegal purposes, two particular uses come to mind:

  • tax evasion
  • corruption

A reduction in taxation seems to be the main purpose of offshore companies in such prominent cases as the father of British PM Cameron.

Yet, is “tax planning” a plausible motive in the Mongolian context? With a flat income tax of 10% it seems to me that an individual would have to have amassed a significant fortune before the costs of paying the advisors and structures that are required for an offshore company. Somehow, I’d have to suspect that tax reduction is not the primary aim of Mongolians who maintain offshore companies, though this is not an area I specialize in in any way, so I hope that others can enlighten me about this.

The greater fear in the case of Mongolia is that offshore companies are part-and-parcel of corruption schemes where shell companies and complex transactions may be used to hide the movement of funds to officials or decision-makers. That would clearly be an illegal activity, and certainly an illegitimate one. It is noticeable that a number of the records associated with individuals above point to company names that are at least inspired by names commonly used in the mining industry.

For example, the record that is associated with Chuluudai points to him as a shareholder in something called “Strategic Mines”. Some of the records associated with less prominent individuals have similar names.

Other Names

Of course, there are names beyond those that appear at first glance in the Panama Papers. For example, a search for Ulaanbaatar addresses leads to numerous addresses that seem to be linked to names that appear to be foreign names, be they Chinese or “Western”.

More Evidence Please!

Obviously, individuals named deserve a chance to explain themselves, and are entitled to a legal assumption of their innocence. I sincerely hope that the journalists involved in the analysis of the Panama Papers will be able to follow on the concreteness of the indications offered in the Papers by building up a greater understanding of the legitimate uses of offshore companies, or by pointing to concrete evidence of less-than-legitimate, perhaps even illegal use of such constructions. A greater understanding of different financial instruments will help inform debates about corruption and make strategies to curb corruption more effective.

Posted in Corruption, Law, Media and Press, Social Issues | Tagged | 2 Comments

National Survey of Mongolian Public Opinion

By Bulgan B and Julian Dierkes

Just three weeks after Santmaral’s PolitBarometer came out, we have another indicator of Mongolian public opinion, courtesy of IRI with funding from the Canadian government, the “National Survey of Mongolian Public Opinion”. (Full Results (PDF))

As with the previous post on the PolitBarometer, we’ll try to pick out some of the surprising and/or important insights provided by the data.

Also like the PolitBarometer, there was significant focus on questions surrounding the durability of democracy, the policy areas of particular concern to Mongolians, and of economic policy. In addition to these areas, gender also was a focus of the survey.

But first,

Methodology

The most notable difference between the PolitBarometer and the IRI Poll is the broader coverage of the countryside in the latter. Data from 13 aimags was included in the IRI Poll, thus more than half of the provinces were represented. While that still leaves the result open to some biases through regional political allegiances, this bias – if any – is reduced further from the PolitBarometer data.

2,800 interviews in the countryside and 2,200 interviews in Ulaanbaatar means that the countryside views could trump some of the Ulaanbaatar views that may be more dominant in public perceptions, but not at the ballot box. In some of the results, it seems like a countryside tilt could be part of the explanation and we identify those below. The numbers reflect population distributions, of course, but what makes this proportion particularly interesting is that Ulaanbaatar’s “share” of public discourse far outstrips its population.

Because of the fairly large sample, the margin of error is small at 1.4% at a 95% confidence level.

Democracy

As for the PolitBarometer, the IRI Poll speaks to some confidence that Mongolians have in democracy, but also points to some challenges to that interpretation.

At the most general level, it seems that Mongolians believe in democracy, but that they have relatively less trust in the political institutions that democracy has brought with it to democracy. In the various questions about trust in/performance of certain institutions, parties, cabinet, the PM, the president, etc. score low, while voters still report an abstract belief in democracy, voting and profess to plan to vote in significant numbers.

The “Chinese Way”

In the context of Mongolians’ support for democracy, one question stood out as particularly interesting, “In Mongolia, if you could have only one or the other, which is more important to you: a democratic system of government or a prosperous economy?” (p. 51). 41% chose democracy over prosperity, 49% vice-versa. Right next door to Mongolia, in China, the government has obviously been arguing for years that material development should come before political freedoms. It seems that Mongolians are open to that argument, though it should be noted that support for democracy is more enthusiastic (27% “Democracy is definitely more important to me”) than for prosperity (18% “Prosperity is definitely more important to me”).

Gender

For many of the questions in the gender section, it’s most interesting to dream about longitudinal data. For all the questions that touched on domestic violence, for example, it would be fascinating to see to what extent public perceptions shifted in the course of some of the public mobilization and legislative initiatives last year, but unfortunately, a reliable retroactive survey tool has not been invented yet.

The somewhat contradictory nature of answers to questions regarding women’s representation in politics could be an indication of changing dynamics on gender. On the one hand, there is a broad support for women in politics and leadership role (p. 25 and 26 give support from well over half of the respondents to promoting women to leadership positions/elected office), yet, many respondents also seem to be comforted in traditionalist views of women’s role in society. More than 3/4 of respondents thus endorse the statement (p. 28) “Women should be primarily responsible for taking care of the house and children.”

Interestingly, responses by women and men were not very different on the question of whether “Women are equally represented in political decision-making positions in Mongolia” (p. 22). One might have expected that men see more equity than women, but that is not the case.

Where responses were disaggregated, one result was puzzling, the difference between women and men in response to a question about their personal economic situation. While 66% of women see themselves as likely worse off in the coming year, only 44% of men responded in the same way (p. 10). This would suggest that the current economic challenges are having a disproportionate impact on women’s opportunities.

Dominant Political Issues

Responses to various questions about the most important issues facing the nation point to the economy broadly, and bread-and-butter issues that directly affect voters, specifically. This is reflected in the ranking of top 3 issues (p. 13) as well as the assessment of the government’s performance on p. 19 and 20. In this assessment it should be noted that the only issue that comes close to the negative judgement of the government on the economy is air pollution where only 85% of respondents assess the performance as poor or very poor. Note that the concern with air pollution is especially surprising as only 43% of the respondents were from Ulaanbaatar and that air pollution seems unlikely to rank as a pressing problem in the countryside or even aimag centres.

Governance

While the PolitBarometer has always probed for views on political involvement in the economy, the IRI Poll adds a twist to this governance question, namely the influence of the aimag vs. national government. Fully 44% of respondents would assign primary control of natural resources to the provincial government vs. 37% for the national government (p. 14). This sensitivity to regional justice is also reflected in the broad support (84% strongly + somewhat agree) for a statement like, “My province should be given a proportional share of revenue from natural resources to address the problems affecting the province.”

(Social)  Media

An entire section of the survey was devoted to the media. Here, it was startling how much trust Mongolians place in TV, and how little they seem to rely on social media/the internet for information and election coverage. TV? Really? TV9 which is openly affiliated with the MPRP’s Enkhbayar, for example, is the second-most often watched station (p. 60) and 49% respondents point to TV as the source of most of their information related to the election (p. 58).

Perhaps this reliance on TV is partly skewed by the many aimag centre/countryside respondents in the survey who might have less access to other sources.

Posted in Aimags, Countryside, Democracy, Democratic Party, Ikh Khural 2016, Media and Press, Mining Governance, Party Politics, Public opinion, Research on Mongolia, Security Apparatus, Social Issues | Tagged , | Leave a comment

Julian Dierkes: Яагаад Монголыг сонирхдог болов?

[See the English version as well. Thanks to Mendee for translation, and Bulgan for edits.]

Зарим үед хүмүүс надад Монголын тухай энгийн асуулт тавьж алддаг. Учир би нэг яриад эхлэвэл сэтгэл маань хөөрөөд, намайг зогсооход ч төвөгтэй болно.

Яагаад ингэдэг билээ? Яагаад Монголыг би ингэтлээ их сонирхох болсон юм болоо?

Монголыг би хэрхэн сонирхдог болов

Миний бие 2005 оноос эхлэн Монголд тогтмол очих болж, 2011 оноос эл блогийг хөтөлж эхэлсэн ч надад Монголыг сонирхох, бахархах сэтгэл бүр эрт бий болсон.

Би (баруун) Берлинд өссөн. Заримдаа бид Зүүн Германд жуулчилж, ингэхдээ цөөн тооны дойч маркийг Зүүн Германы мөнгөөр сольж авна.  Тухайн үед сонирхоод, мөнгөө үрэх зүйл Зүүн Германд их л цөөхөн байж билээ. Хамгийн түгээмэл наймаа бол хөгжмийн ноотны цаас, харандаа, харин сүүлд бид Зүүн Германы далбаа, Зүүн Германы залуучуудын байгууллага FDJ-ын тэмдэгтэй цамц авах болсон. Ном бас их авна, ялангуяа, германы сонгодог зохиолууд Зүүн Германд их хямдхан, бас(Баруун)Берлиний сургуулиудад уншихыг шаарддаг болохоор л тэр.

Ингэж явахдаа би Чинагийн Галсан (германаар Galsan Tschinag гэж бичдэг )-гийн 1981 онд Зүүн Германд хэвлүүлсэн түүний анхны “Eine tuwinische Geschichte” хэмээн номыг худалдаж авсан байх. Тэрээр өсвөр насны хүүг Монгол уруу, хэдийгээр Тувагийн тухай ч гэсэн, татан оруулсан гайхамшигтай зохиолч байжээ. Тухайн үед Герман хүүг Монгол уруу хөтөлж чадах Fritz Mühlenweg-гийн In geheimer Mission номыг би хараахан уншиж амжаагүй байлаа. Би Галсангийн зохиолуудыг амтархан унших болж, 2006 онд тэрээр Ванкуверийн Зохиолчдын Наадамд анхны англи хэл дээрх ном- The Blue Sky (see Milkweed Editions for his English books)оороо оролцож байхад нь түүнтэй уулзах сайхан боломж тохиосон юм.

Ийнхүү жаалхан хүүгийн дотор Монголд татагдах тэр үрийг тарьж өгсөн зүйл бол Чинагийн Галсангийн хэрхэн Тува хүү монгол нутагтаа өсөж, бөө, удирдагч болж байгаа тухай зохиол байлаа.

Японтой холбогдох нь

Намайг Монгол уруу хөтөлсөн дараагийн шижим нь Япон. Би япон хэлийг Берлингийн ахлах сургуульд сурч эхлээд, дараа нь Беркелегийн их сургуульд үргэлжлүүлэн судалсан.  1990-1991 онд, их сургуулийн 3 дугаар дамжаанд байхдаа Токио дах Софиагийн их сургууль(上智大学, Tokyo)-д оюутан солилцооны хөтөлбөрөөр очиж суралцав.  Тэр үед дэлхийн хаа сайгүй нилээд нүргээнтэй байжээ. Миний коллежийн хамгийн сайн найз Росс, тэр үед бас Японд оюутан солилцоогоор суралцаж байсан бөгөөд бид хоёр Японоос Берлин үрүү галт тэргээр явахаар шийдсэн юм.  Миний хувьд гэр лүүгээ явах санаатай.  Тэгээд бид хоёр 1991 оны 7 дугаар сард Бээжин (эргээд санахад одоогийнхоос их өөр байжээ)-гээс Транс-Сибирийн төмөр замаар Монголоор дайран өнгөрөх аялалаа эхэлсэн юм. Энэ үнэхээр гайхайлтай аялал байлаа.

Ийнхүү анх удаа 1991 онд би Монголд очсон, гэхдээ энэ аялал маань зөвхөн галт тэргээр дайран өнгөрч,Улаанбаатарын буудал дээр 20 минут л гарч зогсохоос цааш хэтрээгүй.  Одоо миний санаж байгаагаар үнэхээр сайхан байгаль (цаг агаарын хувьд нэн таатай, дулаахай) бас Улаанбаатар галт тэрэгний буудлын өмнөх талбай дахь Зүүн Германыхтай төстэй хоосон лангуунууд л байсан.  Хэдийгээр энэ аялалаас надад хэдхэн галт тэргээр явах үед авсан зураг байсан ч их гүн гүнзгий дурсамж үлдээсэн юм.

Тэгээд бараг 10-аад жил миний анхаарал Япон дээр төвлөрчээ.Берлин, дараа нь Японд амьдрахдаа, миний бакалаврын сургалт (үндсэн анги нь социологи, дагавар мэрэгжил нь гүн ухаан)-ын хувьд жаахан завсарлаг аваад, 1993 онд Принстоны их суруульд социологийн чиглэлээр доктронтурт суралцахаар боллоо.  Хэдийгээр би Япон, арай өргөн хүрээнд Зүүн Азийн нийгмийн шинжлэх ухааны судалгаа хийж байсан ч Монголын талаар маш бага зүйлтэй таарч байв.  Би Чинагийн Галсангийн шинээр хэвлэгдсэн номнуудыг үргэлжлүүлэн уншсаар (ижий минь миний сонирхолыг хэдийнээ гадарлаад надаа Галсангийн шинэ номнуудыг илгээсээр байсан юм, гэхдээ энэ үед хоёр Герман нийлчихсэн байлаа). Энэ үед миний хийсэн ганц ажил бол Степен Коткин болон Давид Вулффийн хамтарсан “Ази дахь Оросыг нээсэн нь: Сибирь болон Оросын алс дорнод” нэртэй Принстоны их сургуульд хэвлэгдэх номны индекс байв.

Миний докторын ажил Япон, Зүүн болон (Баруун) Германы дунд сургуулийн сурах бичиг дэх түүхийн бичвэрийн тухай байсан болохоор би Берлин болон Японд тус бүр жил орчим судалгааны ажил хийгээд нилээд завгүй байжээ.

Докторын ажлаа хийж байхдаа,2001-2002 онд 15 сар орчим Кембриджийн их сургуульд судалгаа хийх хөтөлбөрт хамрагдлаа.  Гэхдээ, харамсалтай нь миний сонирхол тухай үеийн шохоорхолоос хэтэрээгүй учраас, би Кембриджийн их сургуулийн Монгол судлаачидтай төдийлөн холбогдож чадаагүй.

Ванкувер болон миний Монгол завсарлага

2002 онд одоо ажиллаж байгаа Бритиш Колумбын их сургуулийн Ази судлалын хүрээлэнд шинэ багш (туслах профессор)-аар би ажиллаж эхэлсэн.  Хэдийгээр ажил үүргийн хуваарийн дагуу Японыг голлон судалж, хичээл заах ёстой боловч би өмнө зааж байсан Ази, Номхон далайн бодлогын магистр(Master of Asia Pacific Policy Studies)-ын хөтөлбөр, мөн саяхнаас зааж эхэлсэн Нийтийн (нийгмийн)бодлогын болон дэлхийн хэргийн магистр(Master of Public Policy and Global Affairs)-ын хөтөлбөрийн хүрээнд зөвхөн Японоор хязгаарлахгүйгээр Ази болон Номхон далайн харилцааны асуудлыг анхаардаг болов.

Ванкуверт ирээд удаагүй байхдаа, Канадын болон Ванкуверын сонин хэвлэлд Монголын тухай дурдсан өгүүлэл, нийтлэлтэй таарах болж,улмаар Ванкуверээс Монголын уул уурхай ихээхэн хэмжээний хөрөнгө оруулалт хийж байгааг ажигласан. Энэ байдал Оюу Толгой нээлт нь Монгол сэтгүүлчид болон хөрөнгө оруулагчдын анхааралд улам өртүүлэх болсноор улам нэмэгдэв.  Хэдийгээр би уул уурхайн үйлдвэрлэлийн талаар сайн мэдэхгүй ч,энэ бол Монголтой холбогдох чухал холбоос болохыг би мэдэрсэн.  Тэгээд ч олборлох салбар нь Канадаа төдийгүй, Бритиш Колумб,Ванкуверийн эдийн засгийн голлох салбар болохыг ойлгож билээ.

Ингээд би сонин, хэвлэлийн мэдээг улам анхаарах болов.

2006 оны 10 дугаар сард тухайн үед Ерөнхийлөгч байсан Багабанди Канадад хийсэн төрийн айлчлалынхаа хөтөлбөрт Бритиш Колумбын их сургуулийг оруулсан юм.

Айлчлалын бэлтгэл ажилд оролцох болсондоо би машид баясав. Ерөнхийлөгч Багабанди сургууль дээр үг хэлж, дараа нь дээд боловсролын асуудлаарх бага хэмжээний ярилцлагад оролцож билээ. Эл ярилцлагын үеэр Ерөнхийлөгч Багабанди Канад-Монголын хооронд соёлын харилцааг, ялангуяа, боловсрол, судалгааны хэлхээ холбоог хөгжүүлэх санал тавьсан юм.

Энэхүү айлчлалын дараа, би Бритиш Колумбийн их сургуулийн удирдлага болон хамт ажиллаж байгаа нөхдөдөө Монголын их дээд сургууль, хүрээлэнтэй хамтран ажиллах боломж байгааг ядахдаа судлах хэрэгтэй, айлчлалаар яригдсан зүйлсийг хэрэгжүүлэх хэрэгтэй хэмээн зүтгүүллээ.  Ийм судалгааг би өөрөө санаачлан хийхээр болж 2005 анх удаа Монголд тухтай зочлов. Ийнхүү миний Монголыг сонирхох сонирхол улам нэмэгдлээ.

Монголыг фокусалсан нь

Анхны айлчлалаасаа хойш, би Монголд жилдээ 1-4 удаа очих болов. Би хурал, арга хэмжээ, судалгаа гэх мэт Монгол уруу очих бүх л боломжийг алдахгүйг хичээсэн. Хэдийгээр би хөдөө явж байсан боловч, миний айлчлалын дийлэнх нь Улаанбаатарт л өнгөрч байлаа.   Гэхдээ одоо хүртэл Говь нутаг, зүүн аймгууд, баруун зүгийн зарим нутаг, тухайлбал, Хөвсгөлд очиж амжаагүй.

Эдгээр айлчлалын үеэр олон сайхан Монгол хүмүүс, мөн тэнд амьдарч, ажиллаж байгаа гадаад хүмүүстэй уулзаж, танилцсан. Одоо энэ хүмүүстэйгээ Монголд болж буй үйл явдлын талаар тогтмол шахуу ярилцдаг.  Мэдээжийн хэрэг, Монголд сошиал медиа түгээмэл болсон болохоор Монголын талаарх мэдээлэл авахад их хялбар болсон.

Миний энэ сонирхолыг манай Ази судлалын хүрээлэнгийн хоёр захирал (Питман Поттер болон Пол Эванс) ихэд дэмжиж, хамт ажиллаж байсан нөхөд маань миний сонирхолд хүлээцтэй хандаж билээ.

Ингэхдээ, би улс төрийн хөгжил, дэвшил болон уул уурхайн бодлого гэсэн хоёр асуудлыг нилээд анхаарч судалдаг.  Гэхдээ, орчин үеийн Монголын талаарх гадаад улс орнууд дах судалгаа ховор болохоор би зөвхөн өөрийн сонирхдог асуудлуудаас гадна Монголын нийгмийн харилцааны олон асуудлыг ерөнхийд нь анхаарч, мэдлэгтэй болохоос өөр арга байхгүй.

Улс төрийн дэвшил

Азаар 2008 онд би анх удаа сонгуульд ажиглагчаар орж билээ. Мэдээж хэрэг сонуулийн дараах үймээнээс болоод нилээн онцлог сонгууль болсон. Энэ сонгуулиас өмнө ч гэсэн би улс төрийн хөгжлийн асуудлыг сонирхож байсан, ялангуяа Монголын ардчилал нь бусад олон улсаас ялгаруулж, орчин үеийн хөгжлийн асуудлыг өвөрмөц болгож харагдуулдаг. Энэ үеэс эхлэн дараагийн сонгууль (2009, 2012, 2013)-иудад ажиглагчаар оролцож, Монголын ардчилалыг бахархан, ардчилсан дэглэмтэй улс орон бүрт тулгардаг холимог үндсэн хууль, авилгал, ардчилсан шийдвэр гаргах үйл явцтай холбоотой асуудлуудыг анхаарсаар байна.

Би (ялангуяа, хувь хүний ёс зүйн хувьд) ардчилал бол ард иргэдэд үйлчлэх, улс төрчид болон “улс төрийн тогтолцоо” нь мөн ард түмний тусын тулд оршдогт хатуу итгэдэг. Тодорхой баримт, нотолгоонд тулгуурлан, улс төрчид нээлттэй байдлаар шийдвэр гаргаж, учир шалтгааныг тайлбарлан таниулах нь чухал гэж би боддог.  Монголын улс төрийн хөгжил, дэвшлийг ийм ленз-ээр хардаг. Улс төрийн авилгал нь хөршийнхөөсөө хулгай хийхтэй адил учир би жигшин зэвүүцдэг. Гэхдээ, авилгал (сонгуулийн будлианы хувьд ч гэсэн)-ыг нотлох баттай баримт ховор учраас авилгалын асуудлаар би харьцангуй чимээгүй хэвээр байна.  Учир нь улс төрийн асуудал тодорхой баримт дээр суурилсан байх учигтай.
Би Монголын улс төрийн үйл явцад ямар нэгэн байдлаар нөлөөлөх бодолгүй, харин институц болон бүтэц, зохион байгуулалтын асуудлаар саналаа солилцдог.

Гадаад бодлого

Монголын улс төрийн хөгжлийн асуудлыг ерөнхийд нь судалдагийн хувьд Монголын гадаад бодлогыг ч гэсэн нилээд сонирхох болсон. Монголын болон Монголыг сонирхдог гадаадын дипломатуудтай харилцаад эхлэхээр энэ асуудал уруу жам ёсоороо хөтлөгддөг. Энэ нь миний хувьд юу гэсэн үг вэ гэхлээр Монголоос Канад, Герман, болон Японтой явуулж харилцааны талаар мэдээлэл, тодорхой ойлголттой байдаг.  Сүүлийн үед энэ сонирхолд маань “дижитал харилцаа” [digital diplomacy] нилээд өргөн утгаараа багтах болсон.

Уул уурхайн бодлого

Бритиш Колумбийн их сургуулийн, ялангуяа Уул уурхайн инженерийн сургуулийн найз нөхөд, дипломын дараах сургалтын оюутнууд миний Монголыг сонирхох сонирхолыг улам өдөөж өгсөн юм.

Бас тун хачирхалтай нь миний аав – бас л насаараа эрдэмтэн байсан хүн – Германы том нүүрсний Ruhrkohle AG концер Герман дах нүүрс олборолтын ажлаа дуусгаж байх 1980-аад он зөвлөхөөр ажиллаж байсан. Надад үүнээс өөр уул уурхайн асуудлаар тодорхой сонирхол байгаагүй.

Хэдийгээр миний Монголыг сонирхох сонирхол 2005 оны эхний айлчлалын дараа нэмэгдсэн ч гэсэн би төдөлгүй Канад болон Ванкуверийн Монголтой харилцах гол холбоос уул уурхайн хөрөнгө оруулалт болохыг гадарлаж билээ. Ингээд, би анхаарлаа мөнгө урсаж байгаа тэр зүгт хандуулсан – Монголын засгийн газар баялагийн үр шимийг хэрхэн ашиглаж байгааг, энэ нь Канадын хөрөнгө оруулагчдад яаж нөлөөлөхийг анхаарч эхэлсэн.

Энэ сонирхол маань намайг НВК Уул уурхайн инженерийн хүрээлэнгийн нөхдүүдтэй танилцуулж билээ.  Учир нь тэд ч гэсэн Айвонхо компаний нээсэн Оюу Толгой том нээлт болж, Монгол улс уул уурхайн улс орнуудын клубт нэгдэх болсоныг харж байжээ.

Уул уурхайн инженерийн нөхдүүд Монголын бодлого, нийгмийн ухааны асуудлыг сонирхож байгаа нь миний гайхалыг төрүүлэв.  Хэдийгээр тэдний өөрсдийнх нь сургалт, судалгаа нь техникийн шинжтэй боловч уул уурхайн төслүүд голдуу нийгэм, улс төрийн нөхцөл байдлаас болж унадаг.  Ингэснээр уул уурхайн үйлдвэрийн салбар,мэргэжил нь алдаатай (заримдаа амжилттай байсан ч)үйл ажиллагааны улмаас нэр хүндээ алдах аюултай тулгардаг ажээ. Тэгэхээр тэдний тухайн уул уурхайн эдийн засаг, улс төр, нийгмийн нөхцөл байдлыг сайтар ойлгох хэрэгтэй гэсэн ухаарал бидний урт хугацаанд хамтран явуулж буй магистрын оюутны төсөл, сургалт,мөн Канадын уул уурхайг дэмжих төслийн “IMAGine Mongolia” гэгдэх Монгол хөтөлбөрийн үйл ажиллагааны үндэс болдог.

Монголыг сонирхдог доктор, магистрын оюутнууд

Монголыг гэх миний өөрийн сонирхолын нэг салшгүй хэсэг [“ingredients”] нь орчин үеийн Монголыг сонирхдог Бритиш Колумбын их сургуулийн [доктор, магистрын]оюутнууд юм. Энэ блог маань ч гэсэн үүний хамгийн бодитой илэрхийлэл, гэхдээ би Бритиш Колумбын их сургуулийн архитекторын тэнхмээс эхлээд уул уурхайн инженерийн тэнхим хүртэл, дээр нь өөрийнхөө Ази, Номхон далайн бодлогын магистр, Нийтийн (нийгмийн)бодлогын болон дэлхийн хэргийн магистрын оюутнуудтай хамтран ажилладаг. Цаашид орчин үеийн Монголын асуудлыг ойлгохын тулд доктор,магистрын оюутнуудаа улам ихээр түших болно.

Posted in Research on Mongolia | Tagged | 1 Comment

Where did my Interest in Mongolia Come from?

By Julian Dierkes

Sometimes people make the mistake to ask me a seemingly straight-forward question about Mongolia. Well, once I get talking, I get pretty excited and it’ll be hard to stop me.

So, why is that? Why am I so interested in Mongolia and how did I become interested in the first place?

How I Got Interested in Mongolia

I’ve been traveling to Mongolia very regularly since 2005, we’ve been running this blog since 2011, but my fascination with Mongolia goes back further.

I grew up in (West) Berlin. Occasionally we would visit East Berlin and when we did we had to exchange a certain amount of D-Marks for East German Marks. There was generally very little that was attractive for us to spend our money on in East Berlin. Typical purchases were sheet music and pencils, later on we were keen on East German flags and perhaps an FDJ-shirt. Books were also a common choice, in part because German classics were often available for pennies in East Germany and assigned for school back in (West) Berlin.

I must have come across Galsan Tchinag’s (Galsan Tschinag as transliterated in German) Eine tuwinische Geschichte on one of these trips, his first book published in (East) Germany in 1981. What a wonderful story teller he is and how he brought me into Mongolian, well Tuvan anyway, settings as a teenager! Curiously, I did not read Fritz Mühlenweg’s In geheimer Mission until much later, which would have been another easy to get fascinated with Mongolia as a German boy. I have continued to enjoy Galsan’s writings very, very much and had the great pleasure to meet and host him in Vancouver in 2006 when he participated in the Vancouver Writers’ Festival on publication of his first English translation, The Blue Sky (see Milkweed Editions for his English books).

So, it was Galsan Tchinag’s storytelling about growing up Tuvan in Mongolia and growing up into a shaman and leader that planted the seeds of a youthful fascination with Mongolia in me.

The Japan Connection

The next thread that lead me to Mongolia was Japan. I had started learning Japanese in high school in Berlin and then ended up pursuing it in university at UC Berkeley as well. From Cal, I went to Sophia University (上智大学, Tokyo) on exchange in my third year of university in 1990-91. Turbulent times in the world. My best college buddy, Ross, was also in Japan on exchange at the time, so we decided to travel home (for me) to Berlin from Japan by train. So, at some point in July 1991, we started from Beijing (also a very different city at the time from what it is now, the little I remember of that trip) on the Trans-Siberian trip through Mongolia. And it was breathtaking.

In a way, I thus visited Mongolia for the first time in 1991, but it really was only transit through Mongolia, since we didn’t leave the train other than for the 20 minutes that it stopped in Ulaanbaatar. All I recall from that trip is the beautiful landscape (we had glorious, pleasantly warm weather), and the brief run around the square in front of the Ulaanbaatar train station where we encountered the empty shelves that I knew from East Germany. While the trip left a deep impression, I have only a very few photos and memories focused primarily on the existence in the train.

For the next 10 years my attention was almost entirely focused on Japan. After a brief hiatus between my undergraduate degree (Sociology, with a minor in Philosophy) and graduate school when I lived in Berlin and Japan again, I entered Princeton University in 1993 to pursue a PhD in sociology. While I focused on social scientific analyses of Japan and somewhat more broadly, of East Asia, for much of the 1990s, I rarely came across Mongolia in these pursuits. I continued reading Galsan Tchinag when new books were published (as my mother knew of my delight in his writings and kept me up-do-date on his publications, now in united Germany). The only encounter with the region was a job I had as a graduate student producing an index for a book, Rediscovering Russia in Asia: Siberia and the Russian Far East, that Stephen Kotkin and David Wolff at Princeton had co-edited.

My dissertation work on historical narratives in school textbooks in Japan and East and (West) Germany kept me busy for many years and took me for fieldwork back to Berlin and to Japan for a year each.

As I was completing the dissertation, I accepted a fellowship at Cambridge University where I spent 15 months from 2001-2002. Sadly, I had very limited contact with the Mongolia crowd at Cambridge during this period, largely because my interest had not really moved much beyond the early fascination.

Vancouver and my Mongolia Break

In 2002, I accepted a junior faculty (assistant professor) position at the University of British Columbia’s Institute of Asian Research where I continue to work today. The position continues to be focused on Japan, but given that I used to teach in our Master of Asia Pacific Policy Studies until recently, and now teach in the Master of Public Policy and Global Affairs, my perspective was never focused exclusively and narrowly on Japan, but certainly spanned an interest in Asia and transpacific relations.

At some point relatively soon after I arrived, occasional articles mentioning Mongolia began to appear in Vancouver and Canadian media and I noticed that a significant amount of investment capital was flowing from Vancouver into Mongolian mining. This only intensified as the “discovery” of Oyu Tolgoi pushed Mongolia further onto the radar of journalists and investors. While I didn’t know much about the mining industry at the time, I did notice that this was a very concrete link to Mongolia, and also realized that the extractive sector was not only a vibrant sector in Canada broadly, but of particular relevance to the British Columbian and Vancouver economy.

I started paying closer attention to these news items.

In October 2004, then-president N Bagabandi, came on a state visit to Canada and included the Univ of British Columbia on his itinerary.

I was thrilled to be involved in planning for this event. Pres. Bagabandi gave a public address and joined a smaller group in a discussion that included a focus on higher education. During this discussion Pres. Bagabandi invited more people-to-people links between Canada and Mongolia in general, and also called for more academic connections.

Following this visit, I made an argument to colleagues and the UBC administration that we ought to follow up on this invitation and at least investigate whether there were opportunities for collaboration with Mongolian institutions. I was very happy volunteer for such an investigation and thus visited Mongolia properly for the first time in 2005. And thus… my interest in Mongolia grew very quickly.

Focusing on Mongolia

Since my first visit, I’ve been traveling to Mongolia from 1-4 times per year. I grab any opportunity I can get to visit, really, whether that is conferences, events, or research. Most of those visits have been to Ulaanbaatar, though I’ve also taken some extended trips to the countryside. I have yet to visit the Gobi, and the Eastern provinces, as well as parts of the West, including Lake Huvsgul.

On these visits, I have had the good fortune to get to know many individuals, Mongolian and non-Mongolian, based in Mongolia. They are the people I speak to regularly to keep up with events in Mongolia. Of course, the rise of the popularity of social media in Mongolia has made the task of keeping up with developments much easier.

My interest has been supported by two directors of the Institute of Asian Research (Pitman Potter, Paul Evans) and has been tolerated by many other colleagues.

Substantively, I have focused on two areas in particular: political development and mining policy. At the same time, the lack of scholarship on contemporary Mongolia abroad means that I have been forced to become somewhat of a generalist, aiming to be somewhat knowledgeable about many areas of Mongolian social relations, not just topics that I focus my attention on.

Political Development

It was by chance that I participated in election observation for the first time in 2008. That turned out to be an eventful election, of course, primarily with the riots in its aftermath. Even prior to this election, I had become interested in political development, however, in part because Mongolia’s democracy is one aspect of its contemporary development that makes it stand out among many countries. Given that interest and subsequent participation in election observation (2009, 2012, 2013), I remain fascinated by Mongolia’s democracy, including all the challenges that its mixed constitution, corruption, and democratic decision-making brings with it, as it does everywhere where democracy is the form of government.

I do firmly believe (this is more a matter of personal ethics) that democracy is intended to serve the people, and that politicians and the “political system” thus also serve the people. I think that evidence-based policy-making and open communications by politicians about the policies they are pursuing and the reasons they are pursuing them, are important, and I thus follow developments in Mongolian politics through that lens. Political corruption to me is the equivalent of stealing from your neighbour on a large scale, and I find it disgusting. Yet, any points I raise about politics should be based on evidence and given the scarcity of concrete evidence of corruption (as well as electoral fraud) I remain relatively quiet on this issue in public.

I do not have any intention to influence any particular direction that Mongolian politics might take, but I do comment on institutional and organizational questions as well as the  wisdom of specific policies.

Foreign Policy

Given my general interest in Mongolia and in political developments, I have also become quite interested in Mongolian foreign policy. To some extent this interest comes “naturally” through interactions with Mongolian diplomats and foreign diplomats who focus on Mongolia. For me this means that I am particularly aware of interactions between Mongolia and Canada, Germany and Japan. Recently, this interest has also begun to include “digital diplomacy” more broadly.

Mining Policy

One of the great delights of my interest in Mongolia has been the interactions this interest has spurred with colleagues and graduate students at UBC, especially in Mining Engineering.

Curiously, my father – who is also an academic – spent a fair bit of time on consulting projects with the Ruhrkohle AG, Germany’s giant coal concern, as it was closing the last of its coal operations in Germany in the 1980s. Other than that, I had no contact or particular interest in mining as a topic of inquiry.

However, as my interest in Mongolia grew after that initial 2005 visit, I quickly noticed that Canada’s and Vancouver’s main link with Mongolia would come via mining investment. So, I turned my attention to where the money was flowing, i.e. how is the Mongolian government trying to manage resource endowments, and what does that mean for Canadian investments.

With this interest, I soon encountered colleagues from the NBK Institute of Mining Engineering at UBC whose attention had also been caught as it became clearer that then-Ivanhoe Mines’ Oyu Tolgoi discovery was a major discovery and vault Mongolia into the club of mining countries.

A number of colleagues in Mining Engineering surprised me by their interest in policy and social science on Mongolia. While technical in their own training and research, they recognize that mining projects often fail due to social and political circumstances, and that their entire industry and profession is under threat from the poor reputation that comes with such failures or sometimes even with successes. Their recognition of a need for better understanding of the economic, political, and social context for mining has been at the root of long-standing collaborations that have led to graduate student projects, teaching, and our collaboration in CIRDI’s “IMAGine Mongolia” activities.

Graduate Students with an Interest in Mongolia

One of the crucial “ingredients” in my own interest in Mongolia have been collaborations with UBC graduate students who have pursued an interest in contemporary Mongolia. This blog is one of the most concrete expressions of that interest, but it has extended to my interaction with students in departments across UBC from Architecture to Mining Engineering and our own MA Asia Pacific Policy Studies and Master in Public Policy and Global Affairs. I continue to rely heavily on graduate students in furthering my understanding of contemporary Mongolia.

Posted in Research on Mongolia | Tagged | 1 Comment

Politbarometer April 2016

By Julian Dierkes

With BULGAN B

Santmaral Foundation’s Politbarometer (April 2016) remains the “go-to” political poll for Mongolia. This is because a) it is the only credible poll that has been conducted repeatedly, and b) because it is generally credible.

We have thus previously commented on pre-election polls conducted by Santmaral:

Methodologically, the weakest part of the poll remains its limited polling across the country. This year’s edition was limited to Uvurkhangai, Selenge, Sukhbaatar, Dundgovi in its countryside sampling. This is particularly a limitation in the polling on specific politicians’ popularity as voters may prefer politicians from their aimag in significant numbers compared to the nationwide underlying sentiment.

Most of the results are best interpreted by comparing this year’s results to last year‘s.

Summary Observations

  1. The poll offers little evidence for any growth of “resource nationalist” sentiments. [See my recent post for an argument that that label is useless to begin with.]
  2. Mongolians are feeling generally more confident than last year and particularly so when it comes to questions about democracy.
  3. Populist politicians continue to be the most popular.
  4. Election outlook: many Mongolians are undecided, the MPP is not gaining as much from the DP’s stuggles as might be expected, the XUN party may be viable.

“Resource Nationalism”

Many observers will be tempted to look at the listing of most popular politicians, find Ganbaatar, Enkhbayar, Battulga, and Uyanga leading that category and declare this to be an indication that “resource nationalism” is on the rise. Never mind that this label remains problematic and thus appears in quotes here.

Apart from the popularity of these individual politicians, Santmaral includes a number of questions that measure attitudes about the state’s involvement in the economy generally and in resource projects more specifically.

When we compare the 2015 responses with the 2016 responses (for Q E5 “What should be the proportion of Mongolian and Foreign ownership in strategic mine deposits”) we notice that the share of respondents who want 100% Mongolian ownership of strategic mine deposits has slid from 21.7% to 20.7% at the national aggregate level, but for Ulaanbaatar (where we would deem the poll more reliable and informative, and where we would expect populist arguments to have more potential adherents) that proportion has gone down from 26.4% to 20.3%. This drop seems to be reflected in the gain in respondents who favour majority Mongolian stakes from 58.6% to 64.6% in Ulaanbaatar. And the number of respondents who endorse majority foreign stakes is also up, though only a little. These numbers certainly don’t seem to indicate simplistic economic nationalism.

Another question that specifically asks about nationalization (E19. “Some people think that the state should nationalize every Mongolian company”) offers a similar conclusion. Nationwide only 1/7 respondents favour such an approach.

Confidence in Democracy

Most observers would probably agree with an assessment that the DP (party and government) struggles have produced much hand-wringing about democracy. The proposals for constitutional reform late last year hinted at this, raising the spectre of dissatisfaction with democracy just as celebrations of the 25th anniversary of the democratic revolution were coming to an end.

Yet, this year’s poll suggests that Mongolians are more confident in democracy than they were last year. When asked about the need for stronger leadership, perhaps a proxy for some latent desire for more authoritarian rule, respondents indicated a desire for such leadership at a greater rate (64%) than last year (59%), but endorsements of technocratic government and more democracy are also up around 6-7%. Should we conclude then that voters are looking for more powerful democratic experts, perhaps? Or, are voters simply looking forward to exercising their right to voice a view on government at the ballot box and endorsing strengthened democracy in that context?

Individual Politicians

One of the most-discussed element in the PolitBarometer poll is always the question inquiring for the “Top 10 Politicians”. In this listing, there has been remarkably little change over the years. The same group of politicians tends to show up with some regularity, though there are some newcomers and some politicians who drop out as well as some shifts in popularity.

We generally disregard the countryside responses on this question as it is too vulnerable to preferences in specific regions.

Some observations

  • The top names, Ganbaatar, Enkhbayar, “Jenko” Battulga, Uyanga could all be characterized as populists.
  • The scandals and discussion of Ganbaatar and Jenko recently, seem to show that “there’s no such thing as bad PR” as they remain popular.
  • Uyanga remains the only women on the list.
  • Compared to last year, Ganbaatar’s popularity has declined from 36% to 27%.
  • Pres. Elbegdorj has dropped from 4th to 7th.
  • Bat-Uul, Ulaanbaatar mayor and a possible DP presidential candidate, has dropped out of the top 10 entirely.
  • Speaker of parliament and DP chair Enkhbold Z has cracked the top 10.
  • Amargjargal is now in 5th.
  • The only MPP leader in the Top 10 is Bat-Erdene. Other party officials like Enkhbold M or Khurelbaatar, for example, do not appear anywhere in the Top 10.

In the countryside listing, not that the greatest difference in popularity is for Jenko who is much less popular in the aimags sampled than in the city.

Party Outlook

Apart from particular policy issues and the  popularity of individual politicians, the PolitBarometer is obviously significant as an indication of how the parliamentary election at the end of June may go.

Here are some of the most suggestive results:

  • If you combine “don’t know” and “no answer” to form an undecided category that would amount to over 40% of voters. Obviously, that leaves lots of room for movement during the campaign and leading up to the election. Given that 85% of respondents signal their intention to vote (much higher than actual turnout in the last elections) that must give some hope to all political operatives as to their chances to win more votes.
  • (Somewhat surprisingly, perhaps) The MPP does not seem to benefiting from the DP’s struggles and factional turmoil to suggest a massive victory like the 2000 election following a DP government. The two “big” parties are favoured by only 15% in Ulaanbaatar. The lack of personal popularity of MPP leaders may be contributing to this, as may the emphasis on Ulaanbaatar in the polling.
  • With a nation-wide share of only 10% of the vote, the MPRP will have to depend on prominent candidates and their chances at first-past-the-post seats to return in numbers similar to the current parliament.
  • Prominent independents generally look to have a good chance at election in first-past-the-post races given the overall division of the electorate.
  • The CWGP scores a very low share of 1.4% nationwide and even in Ulaanbaatar is only selected by 2%. This may be due in part to the on-going discussions of a merger of the CWGP into the DP, but it casts a shadow over the future of the part.
  • The XUN Party (National Labour Party) does seem to be within reach of seats in the Ikh Khural with a 5% share of the vote in Ulaanbaatar contributing to 3.4% nationwide. That will depend largely on some resolution of party governance and recruitment of prominent candidates. But note that given the constant share of the vote for the larger parties, XUN does not seem to be splitting their vote, but rather may be collecting voters from other smaller parties.

 

 

 

 

Posted in Bulgan Batdorj, Civil Will Green Party, Democratic Party, Elections, Ikh Khural 2016, Mongolian People's Party, Mongolian People's Revolutionary Party, Party Politics, Politics, Populism | Tagged | 2 Comments

Education about Extractives to Alleviate Poverty

By Julian Dierkes

As we continue the “IMAGinE Mongolia” work on drafting a curriculum for providing basic and more advanced knowledge of the extractive sector, there are a number of challenges we’re running into in discussions with colleagues from the Mongolian University of Science and Technology as well as among ourselves.

No Recipes Available Here

Our basic aim with CIRDI activities is poverty alleviation. For the IMAGinE Mongolia initiatives and especially in our collaboration with GIZ’ IMRI project, we hope to enable Mongolians to make better decisions on resource projects and governance by offering them more and better information about the extractive sector. That’s it. We’re providing information for Mongolians to make decisions. Information is not the same as how-to recipes. We shy away from labeling “best practices” that should be adopted and instead offer examples of bad practice (current and past, in Canada and elsewhere) and of good practice (again, current and past, Canada and elsewhere). We also select those examples to be appropriate to a Mongolian context. But, ultimately, it is Mongolians that have to make choices and rely on democratic participation to move their government toward implementing those choices.

Our stance in this regard is in some contrast to the expectations of some Mongolians we interact with who ask for recipes and specific instructions, at least a methodology. In recognizing expertise, they want to benefit from this knowledge and assume that it has definite and concrete implications. That is not the case with complex policy, however, whether it is the tax or social welfare system of a modern state, or mining governance.

Other “Hang-Ups”

An element in our unwillingness to offer instructions and recipes is recognition of the quasi-colonial nature of some development activities. This is especially true in the resource sector, perhaps, where international (generally code for OECD-based) companies dominate when it comes to the implementation of large projects.

It is for Mongolians (and citizens of other emerging resource-rich nations) to decide whether and how they want to develop mineral deposits, not for us to instruct them to follow a path that Canada or Australia might have followed which has led companies from these jurisdictions to dominate the world market (to some extent).

The fact that CIRDI funding ultimately comes from the Canadian government (via CIDA, now Global Affairs Canada) also means that there are particular orientations that are included in the project.

For example, ambitions to empower women are manifest throughout Canadian development programs and thus form an integral part of IMAGinE Mongolia activities as well. Obviously, these ambitions need to be appropriate to a specific context, however. So we have to recognize that an emphasis on the role of women in the context of the extractive sector may meet with quizzical looks among some Mongolians who might argue that such a focus is either not appropriate to the development stage that the mining sector finds itself in, or not of great significance to meeting the most pressing challenges. One can disagree with these views (and sometimes we have to), but it is important to acknowledge that such views will have an impact on the efficacy of interventions and – possibly even more significantly – on the long-term sustainability of activities and their impact.

Overall Ambition for our Impact

How do we then expect to contribute to CIRDI’s ultimate objective, namely the alleviation of poverty? Put simply, our IMAGinE Mongolia activities are aimed at providing more and better information to Mongolians to enable them to make better decisions about resource projects. These decisions will then lead to greater benefits (financial and otherwise) accruing to Mongolians which will be distributed more equitably.

This vision of an impact of our activities is predicated on two factors: democracy, and the devolution of (public) decision-making in the resource sector. Whatever faults Mongolians and observers might find with the particular version of democracy practiced in Mongolia, citizens have the opportunity to contribute to decision-making through the ballot box, but also through a number and an increasing number of participatory mechanisms (Local Development Fund, citizens’ halls, etc.). Decision-making is thus an area where individual Mongolians can make their voices heard.

At the same time, the Mongolian national government (possibly on some foreign advice, but out of a stated desire to move towards more participatory democracy as well) is devolving (participation in) decision about the resource sector to the provincial (aimag) and local (soum) level. 30% of revenue is now returned from the national purse to provincial coffers. Exploration licenses offer (at least in principle) a local veto. Impact benefit agreements involving local communities are now mandatory.

With these factors in place (and presumably firmly in place, i.e. across electoral cycles, etc.), we can imagine an impact of our aims to bring more and better information to Mongolians on poverty. On the one hand, we’re addressing decision-makers themselves to give them more and better information. On the other hand, we’re also addressing individual Mongolians (in four aimags for now) to enable them to understand the resource sector better and pose more specific questions to policy-makers.

Thus we are developing a curriculum to be delivered to the general population and – likely in more technical detail – to provincial and local decision-makers that will inform them about the extractive sector. This will not be an endorsement of any specific project or the sector as a whole, nor will it be a condemnation. Instead, we will build this curriculum around an understanding of the mine life cycle, technical and managerial aspects of mining operations, potential impacts (benefits and harms) that may accrue, as well as a number of specific topics of relevance to Mongolians like water and mining, and ninja mining.

To rephrase an English proverb,

we’re not giving Mongolians a fish, nor teaching them how to fish, but instead offering them information about how to manage fish populations and make decisions that will have an impact on the fish and on livelihoods derived from fishing.

This management is of particular importance when the relevant fish (minerals), unlike real fish, will not regrow.

 

Posted in Aimags, CIRDI, Countryside, Development, Mining, Mining, Mining Governance, Policy, Regulation, Water | Tagged | Leave a comment

Guest Post: Envisioning the future of Mongolia by students in Canada

By Batdorj BULGAN

On Monday, March 28, 2016 in Vancouver, Canada: UBC Mongolian Students and Alumni Club organized “The Future of Mongolia through Our Eyes”[Ирээдүй бидний нүдээр] workshop among Mongolian students in Vancouver. At the beginning of the workshop, the UBC MSA club announced its launch of operation and presented their vision to unite the Mongolian students and alumni in Canada.

The introduction of the event was followed by a presentation by Mongolian professors from the Mongolian University of Science and Technology. Dr. A. Enkhbat, Dr. D. Myagmarsuren and Dr. Ya. Tuguldur are here to learn and develop the mining curricula for non-miners in Mongolia through the IMAGinE project from CIRDI.

Following the presentations, the students identified “the Good and the Bad” of the current condition of Mongolia and developed 4 alternative scenarios envisioning the future. The students felt that “freedom” has been achieved and the country is blessed with rich natural resources. The under development of the country in the eyes of the students were seen as a vast opportunity to create, to innovate and to grow. On the other hand, the political instability, environmental pollution and deterioration of soft and hard infrastructures were sources of distress. Among all, the students were grieved by the lack of morality that has clouded the current society of Mongolia.

The education system, economic opportunities (domestic businesses) and public investments were identified as the driving factors for the future deprivation or development of Mongolia. The notions of media literacy, critical (rational) thinking, morality, education founded on custom and science, and participation of individuals were highlighted as root causes which could play significant roles in shaping the future; these were listed under “personal enlightenment” [хувь хүний төлөвшил]. Each scenario created was based in the year 2030 in Mongolia of which the condition of the country was based on economic opportunities/entrepreneurship and personal enlightenment. For the scenario development exercise the students chose the economic opportunities/entrepreneurship as the vertical axis and personal enlightenment as the horizontal axis.

Screen Shot 2016-04-05 at 2.47.17 PM
The scenario exercise helped students connect and share their concerns in the context of Mongolia and their participation in the making of the future. The UBC MSA club reiterated their invitation to the students to collaborate and actively participate in upcoming events and activities.

zurag_4 zurag_3 zurag_2 zurag_1

Acknowledgement

The event organizers would like to thank the CIRDI, GIZ,  H.E. Ambassador of Mongolia to Canada Ed Jager, Mr. Roger Chilton, Dr. Marie-Luise Ermisch, Mr. Damdinnyam Gongor and Mr. Mendee Jargalsaikhan for their generous support.

About Bulgan

Ms. Batdorj BULGAN, MASc Student, Norman B. Keevil Institute of Mining Engineering, UBC and a researcher of the Integrated Management and Governance in Extractives (IMAGinE) Mongolia project.

Posted in Canada, Youth | Tagged | Leave a comment

The story of the discovery of Oyu Tolgoi

By BYAMBAJAV Dalaibuyan

Introduction

“Friedland came out his helicopter. He had a red jumper and running shoes on. He kissed the land and run straight to the Oyu Tolgoi discovery site.” A local elder told me this story. The date is not clear but he surely referred to the early 2000s when there was exploding excitement around the discovery of the Oyu Tolgoi deposit. The discovery was hailed by some people in Mongolia as the most important economic opportunity for the country’s future prosperity. While being criticized by many, Robert Friedland, the then CEO of Ivanhoe Mines, was described by some people as a saviour whose audacious decisions led to the discovery of Oyu Tolgoi. The discovery, however, did not emerge overnight.

Several books have been written in Mongolia about different aspects of the Oyu Tolgoi project. Some of them contain interesting memoirs of the members of the Oyu Tolgoi exploration project. In particular, the memoirs of D.Garamjav and S.Sanjdorj, two senior Mongolian geoscientists who were instrumental in the discovery, are valuable information sources. In the following, a story of Oyu Tolgoi’s discovery is outlined based on the reading of these and other sources (see, References).

Early Encounters

Russian explorers and geologists made the first geological observations in Mongolia during the late 19th century. After the 1917 Russian Communist revolution, the Soviet state paid significant attention to geology as an applied science to serve its industrial and military interests. Soviet geologists created the first general regional geological maps in Mongolia in the 1940s. One of these regional studies reported that the Oyu Tolgoi (Turquoise Hill) area had potential for copper deposits in 1957. The author of the report noted that advanced mineral exploration was suggested by local people who all knew about mineral occurrences in the area. What is now called Oyu Tolgoi was reported as the Bor Ovoo (Brown Hill) area in the report. This name was used in the geological maps created at the time. Although the report recommended further study, Bor Ovoo was not revisited until the early 1980s.

An interesting take on from the report is that local knowledge was important for helping focus geological study, especially in the initial geological prospecting and mapping projects in Mongolia. There are many hill and mountain names with prefixes such as ‘precious’ and ‘rich’ in Mongolia, indicating local histories and knowledge of mineral occurrences and their use. In the Oyu Tolgoi mine area, for example, small circular pits and minor copper smelting slag from the Bronze Age were discovered during the extensive mineral exploration stage. Another example is Erdenet, which was the largest mine in Mongolia until the discovery of Oyu Tolgoi. The Erdenet Ovoo (Precious Hill) copper-molybdenum deposit was discovered by Czech geologists in the early 1960s. As suggested by their Mongolian colleagues, they made a short visit to the area on their way to another exploration area. The samples they collected showed high values of copper and other minerals, which led in a short period of time to a joint Mongolia-Czech exploration project at Erdenet Ovoo.

It is worth noting that the subsequent development of the Erdenet project coincided with a positive commodities cycle. The exploration project was interrupted by the Prague Spring of 1968. The results by then however had attracted interest from Moscow, with the Soviet Union at the time a far smaller copper producer than leading producers such as the USA and Chile. The significant commodities boom that occurred in the early 1970s was apparently key to the Soviet Union’s decision to invest in Erdenet and establish a joint venture with Mongolia.

Mongolian geologists carried out a preliminary geological and geochemical mapping study in the Oyu Tolgoi area in the 1980s. In his memoir, geologist D.Garamjav, who led the team that discovered the high-grade gold, copper and molybdenum surface zone at Oyu Tolgoi in 2001, noted that he had observed evidence of alteration and copper staining in the area when he did fieldwork in 1983. The area was subsequently covered by extensive geological mapping in the Mongolian Gobi region in the late 1980s, a period when geology was consolidated firmly as an applied science in Mongolia. Exploration and estimation of the nation’s vast mineral reserves and economic deposits was a high priority for the state. Erdenet had become the major source of national export income by the mid-1980s as Mongolia like other Soviet bloc countries began to experience significant economic downturns.

Western Interest

Mongolia underwent severe economic recession after its transition to market-based economy and multiparty democracy in 1990. The national income shrunk substantially as the aid Mongolia had received from the Soviet Union and other socialist countries, that constituted one third of GDP, was abruptly discontinued. All sectors of the economy were affected by the crisis, including geological surveying and the mining industry. Hundreds of geologists became unemployed as the government curtailed funding for geological fieldwork.

Mongolian political leaders tried different ways to attract foreign aid and business interest. In 1994, the then CEO of the state-owned Erdenet Mining Corporation (EMC) Sh.Otgonbileg contacted the US-based Magma Copper Company (MCC), which was at the time one of the largest producers of copper in the world. After declining EMC’s two separate proposals on investment in the Erdenet Mine and a joint copper production complex, MCC proposed to run a joint copper-targeted mineral exploration project in Mongolia. As a result, the joint venture company Erdenet-Magma was established in 1995 under a contract between EMC and MCC. S.Diyakov, a Ukrainian-born, multi-lingual (including Russian) geologist from MCC, was appointed as the project lead. The company recruited several Mongolian senior geologists experienced in copper mineralisation, including D.Garamjav.

By 1997, more than 80% of Mongolia has been mapped at a scale of 1:200,000 and 15% at a scale of 1:50,000. Geological mapping, geochemical sampling and airborne geophysical surveys over portions of the country had generated a good database since the 1960s. Most of the geological information was in Mongolian or Russian language. The Erdenet-Magma team reviewed all existing reports on copper mineralisation in Mongolia and selected over 20 areas to carry out geological field study.

Two geological teams were established to explore selected areas in in Western and Central Mongolia in 1995. The teams visited 73 of the deemed most promising mineral occurrences in Mongolia and selected the best four for more detailed evaluation and exploration. These were in Zavkhan, Bayankhongor and Umnugovi aimags. The Central Mongolian team visited several areas in the Gobi region and although D.Garamjav, mentioned earlier, suggested visiting the Oyu Tolgoi area, the team decided to visit another area instead.

As one of the first exploration projects involving Mongolian and Western geologists and Soviet and Western methods, the fieldwork was a learning and inter-cultural process. Besides technical exchange, cultural understanding and learning occurred. D.Garamjav tells an interesting story in his memoir. The exploration crew stopped for an overnight camp near a herder household somewhere in the Gobi and began to erect their tents. The leader of the crew, a geologist from USA, complained about the odour of a nearby animal shelter and dung, and asked to find a better place. The translation was made literally. This angered the Mongolian crew members, especially senior geologists. A strange division occurred, whereby the Mongolian and foreign members erected their tents at a distance to each other. The incident ended well with mutual understanding when the crew leader called a meeting in the evening and apologized for his behaviour.

The Salience of Local Expertise

In 1996, MCC was acquired by BHP (now BHP Billiton). Under new ownership, the exploration team at the insistence of D. Garamjav visited the Oyu Tolgoi area for the first time in September 1996. The company’s regional reconnaissance program in Dornod and Sukhbaatar aimags had not found any significant copper targets, and only two days were enough for the team to decide that Oyu Tolgoi was a promising copper deposit and apply for an exploration concession.

In 1997, Magma-Erdenet was dissolved because EMC’s failed to the contract terms in co-funding the joint venture, and the CEO of ECC was involved in series of political and corruption scandals at the time. BHP Billiton decided to establish a branch office in Ulaanbaatar in 1997. A new liberal Mineral Law adopted by the Mongolian parliament served as an important incentive for the company to launch an expensive exploration program of its own. BHP began detailed exploration at Oyu Tolgoi as part of a regional reconnaissance program of the South Gobi region during the 1997 field season.

In 1997-1998, the BHP Billiton team at Oyu Tolgoi completed 23 diamond drill holes. Although the first phase showed encouraging results, the second and third phases of drilling failed to identify significant ore grade mineralization. In 1999, the new CEO of BHP, Paul Anderson, commenced company-wide restructuring, cutting exploration budgets and jobs. The company decided to close the Mongolia office, and its exploration tenements, including the Oyu Tolgoi exploration concession, were offered for joint venture. A presentation of the Oyu Tolgoi deposit was given at the PDAC meeting in Toronto in March 1999.

Ivanhoe’s Breakthrough

Ivanhoe Mines, a Vancouver-based exploration company that had launched exploration programs in Mongolia after the introduction of the 1997 Minerals Law, signed an option agreement with BHP Billiton to earn a 100% interest in the Oyu Tolgoi Concession in May 2000. The company completed 109 drill holes by September 2000, with encouraging results. Ivanhoe subsequently opened a major office in Ulaanbaatar under the name of Ivanhoe Mines Mongolia Inc (IMMI).

However, 149 drill holes were completed before the project’s ‘eureka’ discovery hole, OTD-150, was drilled in in Southwest zone of the Oyu Tolgoi area in July 2001. D.Garamjav was central to deciding the location of the hole. According to the Mongolian project members, the project was running out of funding. D.Garamjav was invited to choose the location of OTD-150, one of three deep drill holes that the project could afford. The discovery drill had a depth of 590 metres, and it penetrated a new zone of porphyry mineralisation containing high-grade gold, copper and molybdenum. As a result, more drill rigs were added to speed up evaluation of the Oyu Tolgoi deposit. The results demonstrate the benefits of using local expertise and knowledge in conjunction with international good practice.

In August, another discovery hole, OTD-159, was completed in the Southwest zone, confirming the massive economic potential of the deposit. IMMI launched an extensive drilling program to expand the resources. Consequently, Ivanhoe Mines drilled a hole (OTD-270) in the far northern portion of the Oyu Tolgoi area, which resulted in the discovery of another massive deposit at depth (subsequently named after Hugo Dummett, Vice President of exploration at BHP Billiton and Ivanhoe Mines), one of the world’s largest and highest-grade gold/copper deposits. By mid-2003, Oyu Tolgoi had become one of the biggest mining exploration projects in the world, with 18 exploration drill rigs operating. While a number of Mongolian drilling companies were hired during the early stages of exploration at Oyu Tolgoi, international companies with more advanced technical and human expertise began to lead the advanced exploration drilling. Like Erdenet, further development of the Oyu Tolgoi project coincided with a commodities boom that began in 2002.

Concluding Remarks

The discovery of the Oyu Tolgoi deposit, and the Erdenet deposit, shows how development momentum can result from the dynamic interface of global and local factors, and especially the influence of international or transnational political and economic events on a small, landlocked state. Mining legislation that provides certainty over tenement rights and protection for explorers is vital to encourage mineral discoveries. BHP Billiton’s extensive exploration project and Ivanhoe’s takeover were encouraged by the 1997 Minerals Law that was praised as the most investment-friendly minerals law in the world at the time.

The discovery history of Oyu Tolgoi is a vivid example of the volatile nature of mineral exploration. It shows how a range of factors such as geological endowment, local knowledge, market trends, commodity price and legal environment can shape the progress and results of exploration projects. Tapping into local expertise and knowledge is crucial for international developers. Strategic, patient and respectful relationships between local and international expertise and experience can yield positive outcomes.

References

Kirwin, Douglas. 2006. “The giant Oyu Tolgoi porphyry copper deposit: discovery history and implications for future exploration in the Gobi“. Paper presented at the SE Europe Geoscience Foundation Conference. Sofia, Bulgaria .

Garamjav, Dondog. 2015. A memoir (1). Ulaanbaatar: BCI

Ochirbat, Punsalmaa. 2010. Oyu Tolgoi: Past, present and future. Ulaanbaatar: Admon

Robertson, Rob. 2001. “Ivanhoe sparks excitement with Mongolian copper-gold find“. Northern Miner.

Sanjdorj, Sanjdorj. 2011. Memories of the exploration of the Oyu Tolgoi project. Ulaanbaatar

Yuki, Konogaya. 2013. Interview with Choijin Khurts, the former Minister of Geology and Mining.

Posted in Mining, Oyu Tolgoi | Tagged | 1 Comment

Resource Nationalism?

By Julian Dierkes

One of the dominant foreign views of Mongolian politics is that they’re rife with “resource nationalism”. This perspective is reproduced in many conversations with people in the mining or financial industry and is often repeated by visiting journalists who parachute into Ulaanbaatar for a couple of days.

Just recently, this meme has come up again in reports, probably inspired/organized by “Jenko” Battulga, of protests in Ulaanbaatar in March 2015. Note that this definitely falls within the context of Spring being a season for demonstrations in Mongolia, as I discussed with CoverMongolia’s Mogi just some weeks ago.


I have argued for some years against the portrayals of anything in Mongolia as suggesting “resource nationalism”. Our standard riposte has been: there’s no coherent ideology, there’s no movement, there are no leaders. In fact, it continues to be surprising that there are no organized, vocal pro- or anti-mining movements that are recognizable as such, nor are there pro- or anti-foreign investment movements. That is not to say, of course, that individual Mongolians or even individual Mongolian politicians and policy-makers do not hold views that might be “resource nationalist”, but simply that there is no movement and that the impact of such views is thus limited. But maybe, we’ve just misunderstood this perspective on Mongolia all along and have been to imprecise in our understanding? So, let’s try to be more specific.

Defining Resource Nationalism

The term itself is somwhat common in the economics, political economy and general political science literature. It is applied in areas that I am not overly focused on, so let’s pick some workable definition to apply to Mongolia.

Let’s go with a very recent scholarly publication in a high quality political science journal:

Jeffrey D. Wilson (Asia Research Centre, Murdoch University) “Understanding resource nationalism: economic dynamics and political institutionsContemporary Politics, 2015, DOI: 10.1080/13569775.2015.1013293

Not only is this recent, but it applies the concepts developed in the article to a number of resource economies, something that we are hoping to do here with the case of contemporary Mongolia.

Wilson writes that,

“Resource nationalism is a strategy where governments use economic nationalist policies to improve local returns from resource industries. […] It involves governments exercising control over resource industries through selective and discretionary resource policies, which are designed to achieve some set of political and/or economic benefits that would otherwise not obtain (Wilson, 2011).”

Hm… it seems to me that this applies to a wide variety of contexts outside of the mining industry. Isn’t all industrial policy pursued by OECD countries, for example, nationalist in this way? The Canadian government certainly tries to structure policies in such a way as to support the Canadian auto industry?

Let’s see if more specific descriptions of policies associated with resource nationalism can clarify matters.

Again, Wilson (2015):

[Resource nationalism] is typically characterised by a core set of policies:

  • Policies targeting the ownership of resource industries, which mandate some form of local or state ownership, or in exceptional cases, the nationalisation of mining and energy enterprises (Mares, 2010).
  • Policies constraining the operations of resource firms – through industrial policy requirements and distortionary trade regimes – that encourage certain behaviours such as minerals processing or the provision of subsidised energy to local consumers (Ward, 2009).
  • Policies designed to capture economic rents for public purposes, through changes to resource taxation and fiscal collection systems that increase the share of the profits from resource production accruing to the state (Walde, 2008).

It seems that the most common example that people have in mind with references to resource nationalism is Hugo Chavez and the “re-nationalization” of the Venezuelan oil industry. This is largely the first of the types of policies described by Wilson in the above, i.e. the threat that a national government might nationalize or confiscate private and/or foreign-invested mining projects. Clearly, this is the ultimate political risk for all foreign investment, including Rio Tinto’s participation in the Oyu Tolgoi project, for example.

“Policies targeting the ownership of resource industries”

Let’s look at the first type of policy in the Mongolian context then. It seems quite clear that the definition of strategic deposits and the mandatory state participation in the development of such deposits is clearly a policy that targets the ownership of mining projects. This applies to such mega-projects as Oyu Tologi and Tavan Tolgoi as much as to smaller, as-of-yet-undeveloped projects like various rare earth projects.

The regulations around strategic deposits thus seem to qualify under this definition of resource nationalism, but again, most developed resource jurisdictions also pursue restrictions on foreign ownership (certainly true of Canada), and no one labels these as “resource nationalist”, reinforcing the sense that this label is more generally applied to developing “investment destinations”, and by investors and observes who adopt the standpoint of investors.

This perception of a largely foreign-applied label is consistent with the analysis present by Orhon Maydar (Univ of Arizona) at the recent Berkeley conference on “Deadly Modernity”.

“Policies constraining the operations of resource firms”

Criteria here make it sound like this is a concern with trade distortion primarily. I don’t think that this concern has been raised in the Mongolian context very much, though there are significant worries (and many foreign warnings) about the need to diversify the Mongolian economy which spark discussions of smelters and other processing facilities that would be included among industrial policies.

But again, short of full trade liberalization, these are certainly policies of a nature that are very common in most developed countries.

“Policies designed to capture economic rents for public purposes”

Clearly a very tricky business. The fundamental fact holds that resources are owned by “the people” in almost all national contexts, and the Mongolian constitution also specifies such ownership.

The difficulty (and the accusations of “resource nationalism”) arises when that ownership right is translated into licenses, concessions, etc. for industrial exploitation. From my perspective, there is no magic formula by which to balance royalties, taxes, ownership stakes or all the other forms that have been used to ensure benefits accrue to the nation and people that hold resources.

Obviously, “rent-seeking behaviour” is identified as one of the great risks to resource-rich developing countries and a prime potential cause for the “resource curse” especially when coupled with corruption.

Yet, it is also clear that unless significant net benefits accrue to the population (net of financial, social, environmental, etc. costs), no government should decide to develop mineral resources given their responsibility for the well-being of the population. That is especially the case in a democracy where the pressure on governments to act in the interest of the people should be even greater.

Next to the remote (in the case of Mongolia) threat of complete nationalization, trepidation about finding a fair level of revenue that accrues to the public from mega-projects like OT has been the main struggle in Mongolia. This is also the issue where no answer exists, and that is most easily exploited by politicians (especially in times of lead-up to elections, like right now) by making claims about excessive (whatever that means) shares of revenue being claimed by “foreigners”.

Conclusion

I don’t think the “resource nationalism” label or concept is useful in understanding Mongolia even though investors and financial journalists (and their headline editors) like to trot it out every time someone dares to question the nature of arrangements with foreign investors. Note that the label is rarely applied to developed economies, reinforcing the view that it is primarily used as a pressure tactic against developing countries like Mongolia.

I will continue to refer to “resource nationalism” in quotes, and make my case against this concept.

Posted in Foreign Investment, Mining, Mongolia and ..., Nationalism, Policy, Politics, Populism, Social Movements | Tagged | 4 Comments