Mongolia-Australia Mining Partnership

During FM Lu Bold’s visit to Australia, there has now been an announcement of a grand “Mining Partnership” between Mongolia and Australia to the tune of A$20m over 5 years.

From Julie Bishop, Australian Foreign Minister’s website:

Mongolian Foreign Minister Luvsanvandan Bold and I today announce a five-year, $20 million program to assist the sustainable development of the resources sector in Mongolia.

Like Western Australia, Mongolia’s economy is driven by mining and resources. The Australia-Mongolia Extractives Program will utilise Australian expertise in Mongolia to help ensure the benefits of the mining sector are spread across its entire population.

[…]

Australia is pledging to support the Mongolian Government with financial assistance and expertise that will improve governance in the mining sector, opening their economy up to international investment and development opportunities.

The program will also improve access to technical and vocational education and training in disadvantaged communities in Mongolia so they are better equipped to gain employment in the mining industry.

[…]

1. I’m Jealous

Obviously, this is a very public announcement of commitment to Mongolia by the Australian government and I wish there was a similar commitment from the Canadian side.

From the high point of the Governor General’s visit to Mongolia last Fall, relations currently are in a bit of a funk.

While Australia announces a A$20m program, Canada’s less ambitious bilateral aid program remains in unannounced limbo.

The Canadian government appears to be stalling on accepting the nomination of R Altangerel as new Mongolian ambassador to Ottawa following the departure of T Zalaa-Uul in late 2013. While nothing has been said publicly, one can only guess that there is some kind of a stall in relations.

The only obvious item that could be stalled is a bilateral Foreign Investment Protection Agreement about which little has been heard in years. Whether this is out of a lack of focus on the Mongolian side or actual objections is unclear, but the Canadian ambassador to Mongolia, Greg Goldhawk, is scheduled to be replaced this summer, so if a Mongolian nomination is not accepted by Ottawa, one might imagine that the Mongolian government might similarly stall on a Canadian nomination. That would be a serious and unfortunate stall, obviously.

So that’s why I might be a bit jealous of this Australian announcement.

I hope that this announcement will benefit colleagues in Australia (especially at the ANU’s Mongolian Studies Centre and perhaps at the U of Queensland’s Centre for Social Responsibility in Mining) not least by signalling a certain prominence and thus public attention to Mongolia in Australia.

I also hope that the projects that will be undertaken under this program will involve some colleagues with Mongolia expertise rather than some of the many subject area experts (as opposed to area specialists) who seem to be jetting around the world dispensing their wisdom.

2. Did Someone Leak my EAFQ Piece?

Curiously, the ANU’s Crawford School of Public Policy will be publishing an issue of the East Asia Forum Quarterly later this month which will include some focused discussions of Asia’s “fringe”, including Mongolia.

{Note that my piece was posted on East Asia Forum on March 23}

My own contribution will take a brief look at Mongolian foreign policy, note its success in building political friendships, but urge Mongolian policy-makers to re-focus their efforts on economic relations, particularly in Northeast Asia. If only this issue had appeared before the present announcement, I might wander the earth claiming that my article had an impact. As it will appear after the announcement that trajectory is unlikely.

However, this mining partnership is not what I had in mind in urging a greater economic focus. Yes, this partnership clearly involves a substantial financial commitment to Mongolia and the apparent focus on governance and vocational education implies economic concerns, but it is not a partnership that is focused on trade or the development of bilateral ties per se. Should Australia be successful together with its partners in the pursuit of a comprehensive multilateral free trade agreement around the Pacific (TPP), Mongolian would be frozen out of yet another free trade project raising the spectre of a future when Mongolian will not be able to diversify away from the export of raw materials in part due to a web of trade agreements that excludes it.

Of course, Australia is among the few developed countries that actually have significant investments in Mongolia. These investments are nowhere near the volume of Chinese investments, but they have surpassed Canadian engagement, for example, as Turqoise Hill (by far the largest nominally Canadian investment) has become a mere conduit for strategies pursued by Anglo-Australian Rio Tinto. In this, at least Australia does offer an economic partnership through the private sector that is bolstered by political support as evidenced in the present announcement.

3. What Does This Partnership Mean?

Few details are available at this point. It appears, however, that this is a formalization and re-packaging of Australian aid that has been assumed to be revving up for some time, at least in conversations in Ulaanbaatar. While the announcement is thus quite significant, it appears that it may not be an announcement of anything particularly new.

A focus on governance questions and vocational education is not only very plausible but has been recognized as such by many other aid organizations from the WorldBank to the German-Mongolian Institute for Resources and Technology.

Perhaps, there will be more that’s novel to the programs that are being pursued under this partnership once more details become available, but for now I welcome the news of this very public commitment to Mongolia by Australia and wish the projects to be pursued every success.

I wonder if an Australian embassy to Mongolia (currently, there is a general consulate with bilateral affairs being managed in the Australian embassy in Seoul) can be far behind…

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