Addressing Meat Prices through Policy not Populism

By Julian Dierkes

A very curious spectacle recently to see meat warehouses raided by the General Intelligence Agency. I have seen little discussion of the legality of such raids which look a bit like the action taken against a mining company by a GIA SWAT team some months ago. Economic interest and populist pandering are not strong justification for action by security forces in countries where the rule of law governs.

But what about the meat market? What about price fluctuations and how can they be addressed?

Analyzing Meat Prices

Fortunately, Robert Ritz has provided a data-driven analysis of meat (beef and mutton) prices. One of the most obvious patterns that is visible across the different graphs he provides is the regularity of price fluctuations year-to-year. Basically, beef and mutton prices rise for the first half of every year to later take a dip again. As Ritz also argues, this is a cycle that most likely has its roots in herders strategies to maximize their herds. He writes

In the Fall before winter sets in herders will slaughter or sell those animals which are likely to die in the coming winter. Then in the Spring during breeding season herders often restrict the amount they sell so as not to limit their potential growth that year. In the Summer the productive animals are known and herders are more willing to sell or slaughter those animals that are not pregnant.

Underlying meat prices thus is a “natural” cycle that unfolds over the year and Ritz shows this quite convincingly in his analysis of past prices.

Ritz also provides indications that it is not exports nor losses due to dzud conditions that seem to be driving prices.

It is speculation about the impact of exports that is fuelling populist demands for price controls and actions like those taken by the GIA, purportedly directed at hoarding which I cannot imagine to be an illegal activity.

Building Infrastructure for a Meat Industry

Instead of simplistic and – given the annual cycle – ineffective populist measures, the government should pursue broader policies around the production of meat. This is an important area of policy-making because it has an outsized impact on countryside livelihoods and thus – directly and indirectly – on migration to Ulaanbaatar.

Meat production is mentioned regularly, of course, in the context of the diversification of the economy. Three aspects about the potential for meat exports stand out:

  • Plenty of potential supply in Mongolia
  • A nearby market in China with growing consumptions of meat
  • Branding opportunities around perception of Mongolia as remote, and thus isolated from pollution, etc.

The main obstacles seem to lie in the infrastructure for an industrialized meat business including distributed slaughter facilities, health inspections, shipping infrastructure.

If these infrastructure needs could be addressed, they might also lead to a flattening of the price cycle by increasing the overall volume of meat that is available for supplying Ulaanbaatar as well as for export.

Currently, it seems that most meat sold in Ulaanbaatar originates in nearby aimags. This has been an important aspect of migration to Ulaanbaatar and to surrounding Töv province in that herders have moved their animals closer to market centres, especially Ulaanbaatar but also aimag centres.

If meat production could thus be industrialized in the Western, Northern, and Eastern aimags, for example, that infrastructure would not only allow for exports to China (primarily), but also for shipment within Mongolia. While this might not address the seasonal calculus that herders make regarding their investment in animals, it might flatten the price fluctuations somewhat simply by making more of a supply available to Ulaanbaatar.

Posted in Agriculture, Countryside, Diversification, Employment, Herding, Public Policy | Tagged | Leave a comment

Dr. Bloggers

Our blog has always been rooted in academic research and in the training that regular bloggers have received.

We are all delighted that two of our regular crew (more or less active, at this point), have recently graduated to become Dr. Miliate and Dr. Mendee. Congratulations!

Our group is thus composed of 5 PhDs (2x Princeton, Hokkaido Univ, Indiana Univ, Univ of British Columbia) and an MASc (UBC). If that isn’t enough reason for you, Bulgan, to press on with your studies!

Dr. Mendee

Dr. Mendee

Mendee was there for the invention of this blog (with Byambajav and Julian) and has stayed with it all along.

Now, he has completed his PhD in Political Science focusing on democratization in Mongolia and the Kyrgyz Republic, examining the interplay of geopolitical interests around “small” countries of Asia and continuity in political parties.

As of September 2019, Dr. Mendee will take up an appointment as Post-graduate Research Fellow at the Asia Pacific Foundation of Canada. With Julian and Byambajav, he continues to serve as a director of the Mongolian Institute for Innovative Policies.

Dr. Miliate

Brandon was quite focused on Mongolia for some of his undergraduate work as well as his Master of Arts Asia Pacific Policy Studies at the Univ of British Columbia. Since then, he has shifted his focus Southeast-ward and completed his dissertation in Political Science at Indiana Univ. The write-up of his defense provides a nice summary of the highlights of his dissertation.

Later this year, Brandon will take up his post as South and Southeast Asian Studies Librarian at Yale University.

Posted in Democracy, Mongolia and ..., Reflection, Research on Mongolia | Leave a comment

Mine Aesthetics and OT as National Symbol

By Julian Dierkes

{This post continues a series of posts based on a visit to Oyu Tolgoi at the invitation of the company.}

I think it’s fair to say that Mongolians have had an ambivalent relationship with Oyu Tolgoi ever since Robert Friedland’s infamous 2005 “t-shirt” speech that suggested to North American investors that Mongolians would be happy with a tiny share of profits generated by the mine. Whether or not suspicions about a fair share would have arisen without those comments, these suspicions are deep-seated. Repeated announcements by MPs that the 2009 Investment Agreement or its 2015 Dubai amendment needs to be re-negotiated are partly rooted in the ambivalence many Mongolians have felt toward the project. Rio Tinto’s standoffish attitude and long-time refusal to seriously engage Mongolia as a context for its operations has heightened this ambivalence.

Yet, there would be many things about the project that some Mongolians at least would embrace. Mongolia’s economic growth in the 2010s has been fuelled by OT construction. Employment targets are consistently surpassed and Mongolians are beginning to rise within the OT managerial ranks. Omno Gobi is being transformed into a noticeably better-off region…

Taking Pride in Oyu Tolgoi

Recently, Oyu Tolgoi does seem to be making efforts to address the Mongolian public more extensively and more directly.

They have launched an #OTProud campaign that frequently showcases Mongolian OT employees and they pride they take in their jobs and in the project. It remains to be seen whether this catches with the Mongolian public.

A recent tweet by Armando Torres, Oyu Tolgoi’s current CEO, suggests a similar theme.

On site, however, signs of the important of the OT project for the Mongolian nation abound. I was delighted to see the artistic and craft care that is taken with some of the signage during a recent underground visit. Frequently, as in the examples shown here, this artistry takes symbols of the nation as a motif, the soyombo as it also appears in Mongolia’s flag shows up with particularly regularity.

 

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Beautiful metal craft work at 1,400m below the Gobi.

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It would be very interesting to learn how employees perceive the project and the extent to which they perceive it as something to pride in and to discuss with others who are not involved in the project. I would not be surprised, however, if the pride, camaraderie and esprit de corps carried over from the site to employees’ lives.

 

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More artwork underground at OT, here with distinct national pride.

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Posted in Nationalism, Oyu Tolgoi, Society and Culture | Tagged | Leave a comment

Guest Post: Smart Air

By Nathan Hsieh

The Problem

The air quality of Ulaanbaatar has been a highly politicized topic that millions of aid dollars and institutions have deliberated on. Yet, if one were to approach any random Ulaanbaatarite and state that the air would be clean in five years, the response would likely be of shock. Simply put, there does not exist a quick, economic solution that can equitably provide clean air for all. Pollution will abate as Ger-district growth is curtailed, and consumers begin to earn wages that allow migration to apartments, where energy production for heating and cooking can be centralized and removed from the city.

For Mongolians, that roadmap unfortunately lays out a great sacrifice (and a terrible social bargain) for the short-term: a continual decline in life expectancy and an increased risk of respiratory and heart disease, to name a few. And so, upon careful consideration of this intractable problem, many are left with the question – is there anything that can be done in the short-term? containment? mitigation? The answer: yes.

Indoor air pollution represents the most significant share of exposure to harmful particulate matter, and air purifiers filter out that particulate matter – but the cost per unit ranges from US$5001500, with recurring annual costs anywhere from US$80250. For a country where the GDP per capita is roughly US$3,700, and the average income has hovered around US$200 per month since 2000 – the price of clean air is simply not feasible.

The Solution

Thankfully, there are those that believe it is possible to leverage their resources to create clean air pathways for the less fortunate. Back in 2013, Thomas Talhelm (at the time a Fulbright scholar) was living in Beijing. The air pollution was making him sick, and he wanted to know if he could protect himself. He soon found that air purifiers were exorbitantly priced, so he started researching how they work.

Tom found that purifier technology was shockingly simple. Air purifiers capture particulate pollution using cheap, unpatented technology – the HEPA (High Efficiency Particulate Arrestance) filter. The primary function of every air purifier was simple: a fan pushes air through a HEPA filter, where particulate matter (PM) would stick to the fibers.

After buying a laser particle counter to test for microscopic particles in the air, Tom found that the ability of air purifiers to reduce PM could be mimicked by strapping a HEPA filter to the front of a fan (~US$30). He wanted to share this discovery as widely as possible, and the sincerity and resourcefulness of his solution inevitably snow-balled into what is now Smart Air.

I heard about Smart Air at a workshop in Ulaanbaatar and immediately understood the value it could provide to public health. Following a conversation with the leadership team, Tom agreed to provide a loan to begin operations in Mongolia. The first year was undoubtedly clunky and dependent entirely on the fire of a few people, but the ultimate question was how to ensure the initiative would continue after my time in Mongolia ran its course. It was decided that the best way to accomplish this indefinite end was incorporation as a Limited Liability Company.

The Roadblocks

Thus, began my forays into the legalese of corporate governance. I quickly found that the Mongolian government was highly protective of business opportunities. First of all, foreign nationals cannot own a for-profit enterprise in Mongolia unless they provide an up-front US$100,000 contribution towards share capital. The only way to waive this requirement is to fork over at least 75.6% of the business to one, or more, Mongolian nationals.

I understand the legitimacy of protecting key industries and their revenue streams. This makes particular sense in strategic industries, and it is a practice that has been enacted around the world for millennia: from the Chinese silk trade to American telecoms. But the prohibition of foreign ownership can stymie valuable intellectual capital, ideas that could be a boon for society.

As industry has developed across the US and Europe, more nuanced corporate structures have entered the fore to engender a more diverse array of business opportunities – different tax structures can, and should, be applied to different missions. Take, for example, the L3C (low-profit limited liability company) structure in the US, which was developed to facilitate investments in ventures that aim to be profitable but also socially beneficial. This relies on a consensus that profits and social good are not diametrically opposed – and I believe that is true: profits unite workforces regardless of their language or creed. But profits can also be limited by well-intended leaders. Smart Air’s stated objective is to minimize returns in order to maximize the availability of clean air. I would argue that, as a result, it should not be classified and taxed in the same way as a company that sells white t-shirts as surgical equipment.

Perhaps, nuanced systems of governance are a privilege. I don’t expect the Mongolian government to mimic the L3C as it stands; there are dangers of changing a system without knowing how entrepreneurs will navigate new loopholes. But the simple fact is that it significantly hindered Smart Air’s ability to operate and expand its reach, which directly translated to fewer clean breathes. Ultimately, the answer to how these issues can be resolved is for the shareholders – not those with fiduciary responsibilities, but the ones that breathe some of the worst air in the world and have the right, and chance, to be civically engaged.

About Me

Nathan Thomas Hsieh graduated from Duke University (’14) with a degree in Mathematics. He was a Princeton in Asia Fellow (’15-’17) and was placed in Ulaanbaatar, Mongolia, with the financial services firm, IARUDI. During his free time in Mongolia, he started a social enterprise called Smart Air Mongolia that has continued its operations to-date. Since departing Mongolia last September, he now works for The Mobility House as a Product Rollout Analyst, studying how to integrate the transportation and power sectors through the electric vehicle supply chain.

Posted in Air Pollution, Nathaniel Hsieh, Ulaanbaatar | Leave a comment

Biased How?

By Julian Dierkes

In 2016 I came back from a trip to Mongolia slightly puzzled and concerned. It seemed to me during meetings on that trip that there was a real concern with some interlocutors that I was some kind of spy. My interest in Mongolia as well as the independence of my analysis were questioned and it seemed like it was insinuated that I was somehow interested on behalf of someone else, most likely a government (agency). That’s what prompted me to draft a page explaining my curiosity about Mongolia as well as another making the case for why readers might be interested in my (and fellow bloggers’) analyses. Both of these pages are available in Mongolian (Яагаад |хараат бус байдал) as well as readers might ask very legitimate questions about these topics.

One aspect I found puzzling in 2016 was that similar questions were being raised by several different people from different angles.

The same thing has happened again.

Bias in 2019

Unlike in 2016 when the suspicion seemed to be that I was spying, now there seems to be a sense that I am somewhat “biased”. I wish I had been as smart as several people I discussed this with upon my return and had asked those accusing me of bias what exactly that bias was. I did not, unfortunately. This leaves me trying to understand this question and to provide a response in the abstract.

The accusations of bias all seemed to come from a blog post I wrote with Boldsaikhan Sambuu discussing the late-March legislation to give power to dismiss judges to the National Security Council. In a follow-up post, I included some more narratives of why this legislation was not a threat to democracy.

I have been surprised that no readers have ever engaged me on the transparency page in the past as I had intended this to be a starting point for discussions about my/our position not a definitive/final statement. If you have questions about my independence, read that page, and let me know which parts you do not understand, believe, or accept. But instead of making the positive case for my independence, let me here consider some possible sources of bias.

There’s Always Bias

Well, obviously! I am limited in the information I can gather, in my ability to process that information, and social and political analysis is not the kind of activity that produces a definite “yes” or “no” answer in the end. So yes, duh, I am biased. But there are different sources of bias and these have a differential impact on analyses.

“Someone” Is Directing Me

There seems to have been some sense that I wrote the March 27 post on behalf of “someone” else. My co-author, Bold, has also been subject to this suspicion. The “someone” in question seems to be former president, Ts Elbegdorj. The legislative changes introduced in late March were directed (or so the claim went) at un-doing some of the harm to the rule of law done by the former president. In a subsequent post, I have noted that this is a rationale that has been presented for the legislation.

But me? Writing on behalf of Elbegdorj? Unlike many other Mongolian politicians, I have never met Elbegdorj, nor have I had any direct interactions with him. I am curious as to how he is approaching his current quasi-retirement from politics and would be delighted to have a chance to discuss that with him, but that chance has not presented itself to me.

Why would I let a politician direct me to do anything? What could I gain by following that direction?

The one time I felt like I was being asked to speak on a politician’s behalf was when former president N Enkhbayar was arrested in 2012 and a PR firm subsequently sent out a package of “information” detailing his abuse. Needless to say, I did not write about that information. I actually contacted a number of newspapers that did write about Enkhbayar’s arrest in similar terms to caution them that information came from a particular angle. In fact, if anyone asked me to write on their behalf, I would be more likely than not to write the exact opposite, simply to demonstrate my independence. That would also hold for any other current or former president, prime minister or other politician.

As a researcher, I am always concerned about access to decision-makers. My days during visits to Ulaanbaatar are filled with meetings to give me a chance to get a more in-depth view of the current political mood than I can from Vancouver. To arrange these meetings, I have to rely on contacts and their willingness to speak with me. So yes, access is of some concern. Obviously there are politicians and other voices who have refused to meet with me in the past when I have requested meetings and that is totally fine. It is typically me asking for a meeting with the intention of asking questions to which I do not have answers, so I am dependent on the goodwill of contacts to give me some of their time to speak to me. In busy schedules, that time might not exist.

So yes, access is a currency that I understand and appreciate. But in my many years of visits to Mongolia, my access has never been curtailed in a way that suggested that a contact saw me as biased and therefore did not want to speak to me. In fact, if you thought I got an aspect of current developments wrong and you care about that, I hope you would want to specifically meet with me to explain to me what I have got wrong, as several contacts did during my recent and previous trips.

I have a Party/Person-Preference

I do not know how to put this any other way than simply, no!

As a researcher, I believe that evidence-informed policy-making is better than decisions that are not informed by available information.

Just as I prefer policies that are presented with reference to data, so I would prefer politicians who champion policies that are backed by analysis.

I also have some broader personal commitments/values that do lead me to prefer policies that produce outcomes that are more just and minimize the burden we place on the planet and its ecosystems. And I am certain that democracy is the most likely route to such outcomes. I also strongly believe that Mongolians have fought for and deserve opportunities to make genuine choices about the future trajectory of their country.

Do any of these commitments lead me to prefer one party over another or one politician over another in Mongolia? No, sadly. That is the case because policy-making (for a variety of reasons) is generally not evidence-informed and political parties have not articulated any themes that would lead me to understand that one party is more committed to values like (social) justice and sustainability than another. So, as a researcher, with a focus on substance, I do not see any basis to prefer one political actor over another.

I was trained as a sociologist and that does make me prone to certain methods, questions, and answers. But that would not point me toward any particular political actors, I think.

Someone Is Paying Me

Well, this is a funny thing, but no one has ever attempted to bribe me or pay me for adding any particular political slant to our blog posts. Most likely this is in recognition of our limited impact, but it might also be because anyone contemplating such a payment has probably had the impression of me and my fellow bloggers that such offers would not be welcome. Yes, of course, we are sometimes compensated for work that is based on our research as it also appears on the blog (through political risk or development consulting, for example), but that is not payment for a specific blog post or a specific direction to give to a post. Even the posts based on my recent visit  to Oyu  Tolgoi (which I have been marking with a disclosure that I visited at the invitation of the company) focus on topics that I have been interested in and are based on my observations.

If not financial renumeration, is there some other payment that is forthcoming? Not that I am aware. I have applied for research funding from the Mongolian government, but have never been successful with my applications. With the demise of the fund to support Mongolian Studies earlier this year, and its presumed resurrection as the Institute for Chinggis Khaan Studies (really?), I am fairly unlikely to be awarded any research funding in the near future.

I have long waged a tongue-in-cheek campaign to be appointed as Foreign Minister under the name of Dumbledorj or as (Foreign) Minister of Education as Dambadorj, but unfortunately, no one seems to be interested in my offer in this regard.

Do Get in Touch

So, if you do think I am biased in any way that I have not acknowledged here, please do let me know what source of bias I have not discussed here or which part of my discussion you do not find credible!

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

A Very Premature Outlook on the 2020 Parliamentary Election

By Julian Dierkes

Yes, the 2020 election is more than a year away, and, yes, many observers lament the fact that politics seems beholden to electoral cycles. But, discussions in Mongolia have started to revolve around the 2020 election, and I have already been asked to provide an outlook, so I want to provide some thematic notes that are obviously highly speculative in nature.

Here are some of the questions that I think will loom large in the election.

A (Re)Commitment to Democracy

Elections are fundamentally democratic structures, events, and activities. Given fears about a backsliding from democracy in Spring 2019, many electoral activities will be closely watched as to the integrity of various processes. For this, decisions about the electoral system itself will be crucial. By law, the electoral system has to be set in place six months before the election. In past practice, this has meant last minute passage of an election law at the end of December, an unfortunate habit that would be good to combat, but realistically I am not expecting anything different from this upcoming cycle.

Will it be a purely majoritarian election system again? Will the MPP put in place restrictions on new/small parties or on independents? Obviously, that will have a significant impact on the election results in terms of the performance of smaller parties and independents.

MPP

While a split seemed to be looming this past winter over the battle between the “City” faction of M Enkhbold and U Khurelsukh and others, this seems to have been avoided through an assertion of control by PM Khurelsukh and his allies. Any talk of a re-merger with the MPRP for the MPP or splinters thereof also seem to have been dropped from the agenda. It looks like a relatively calm election campaign coming up for the MPP.

DP

The DP seems in fratricidal decline, particularly with the rift that has emerged in parliament over Lu Bold and his allies’ departure from the party caucus and vows to contest the election as a separate party. It seems unclear what this spin-off is aiming at in political terms (beyond getting elected, perhaps), and so unclear what this might mean for coalitions that could emerge from various results.

Will the election bring a return of former president Ts Elbegdorj to active politics? Presumably, his chances in any kind of direct election would be good, but he might also increase divisions within the party further.

Small/New Parties/Independents

If small and new parties and independents will be allowed to compete fairly freely, what impact will they have?

MPRP

It seems likely that former president N Enkhbayar will, once again, assert himself and perhaps he will ultimately be allowed to stand as a candidate. If he is, than he seems likely to win a seat in most electoral system configurations. It’s unclear to me what this will mean for other MPRP candidates in the party.

New Parties

At the height of the SME Fund scandal, it seemed like the National Labour Party was gaining a lot of attention, but half a year later this doesn’t seem to have translated into any big political momentum. It seems like ХҮН will be hampered by any restrictions the MPP and the General Election Commission dominated by the MPP might devise, but it will also be unlikely to meet with any significant success if its ambition is restricted to election into a few, most likely very few seats, depending on star candidates that might be victorious in a majoritarian riding.

Who will Nominate Pres Battulga?

Pres Battulga will surely want to run for president again in 2021. To do so, he will have to be nominated by a party represented in parliament. His relations with the DP leadership do not seem very close and will be further strained if former president Elbegdorj decides to return to active politics. The MPP is also unlikely to nominate him for re-election, so he will be looking for a vehicle for his nomination and will likely throw his support behind that vehicle.

Any Chance at Substantive Debates?

Notice that I’ve already raised a number of questions, but have said nothing about policy or campaign platforms. This remains the big empty hole at the centre of Mongolian democracy. It would be quite surprising to see any real and principled debate appear in the election.

There may be some specific issues that will be raised, especially in a fashion to pander to popular opinions, but these will not aggregate to any kind of principled debates. Some issues that seem likely to come up:

  • Tavan Tolgoi, though it strikes me as very unlikely that the IPO will actually proceed before the election.
  • Corruption, but most likely as the time-proven mutual accusation and finger-pointing game.
  • State funds, other than the SME Fund, perhaps.
  • Air pollution, though interest will wane again in late Spring.
  • I don’t see that any deeper debates about employment generation will emerge, beyond the usual claims that all candidates will generate jobs.

Incumbency?

In the past, voters have tended to swing away from the party that  had dominated previous elections. This is part of the reasons for Pres. Battulga’s 2017 victory over M Enkhbold, but a similar pattern prevailed in earlier elections as well. For 2020 it is not clear yet that the DP will present a viable alternative. Not only did its previous government throw they country into a bit of a fiscal mess, but it might just continue its slow-motion implosion and simply not appear as a credible alternative.

The sense of the DP as not presenting a viable alternative might be heightened by the MPP’s legitimate claim at reasonably competent management of political issues over the past four years. Not that any of the real challenges (corruption, air pollution, country-side development strategies, etc.) have been addressed, but management of government has been somewhat successful. There are even some ministers that have lent an air of competency to the government. This is true for Finance Minister Ch Khurelbaatar who has brought some fiscal discipline to the government. More surprisingly, it’s also true for Minister of Mining D Sumiyabazar. While his appointment led to some doubts (“a former wrestler for the very important mining portfolio?”) and even mockery, he seems to have genuinely thrown himself into embracing his role as a minister, has been focused in his public appearances and has been dedicated in his service.

Policy Continuity

Given the lack of substantive competition between the main parties, the election result currently would look to be relatively irrelevant in understanding how policy-making might develop. There are no specific expectations that a DP-dominated government – should that turn out to be possible – would change direction on specific topics. Yes, personnel will be rotated and institutional knowledge will – once again – be lost, but no radical reorientation would be expected as it also has not occurred in previous changes of government.

Other Issues

More issues will surely arise, possibly in the context of the Khentii by-election. We will certainly try to keep up-to-date on these developments.

Posted in Democratic Party, Ikh Khural 2020, Mongolian People's Party, Mongolian People's Revolutionary Party, National Labor Party, Party Politics, Politics, Populism, Public Opinion | Tagged | Leave a comment

OT Data Applications

By Julian Dierkes

{Disclosure: As previously mentioned, I was delighted to be invited to Oyu Tolgoi by the company’s communications department.}

In addition to the pervasive focus on safety, the utilization of data is visible throughout Oyu Tolgoi. The kind of control room that centralizes information and decision-making over the chemical processes as in the photo below is not unique to Oyu Tolgoi of course.

Yet, data appears to be collected everywhere throughout the mine operations and to be displayed to inform safe and efficient operations.

I was constantly reminded of the promise of the “management information systems” wave in corporations that aimed to provide dashboards to management that would allow them to control operations in real time and on the basis of constant data, whether that data be from or about production, efficiencies or market conditions. Some of that promise appears to be realized at OT in more extensive fashion than I have seen elsewhere.

Managing Maintenance and Faulty Equipment

Take the maintenance of machinery and equipment as an example.

In visiting underground and open pit operations, as well as the concentrator, screens documenting the state of repair of equipment could be found everywhere.

Here’s the example of a screen providing information about the personnel cage that serves as an elevator to the operations 1,400m underground.

Not only does it display the schedule of arrivals and departures, but it also shows a delay due to unscheduled maintenance.

Everywhere else in operations, monitors showed similar information.

In the open pit, for example, the giant 300t trucks that move ore out of the pit were all traced on a screen, showing the state of their operations, where exactly they were and what maintenance issues may have arisen.

The incident reports that I mentioned as an element in the focus on safety, also included information of the cost incurred by incidents or malfunctions.

This is where the tracking of equipment goes beyond attention to safety and appears to allow operators to also manage efficiency. In the case of the giant trucks, the weight of their load is not only shown on a large display on the side of the truck, but it is also tracked as data. Other screens thus showed how close operators had come to the maximum load of 300t, presumably striving to consistently reach that maximum but not surpass it given the time from the open pit to destination and the constantly repeated processes that make this time matter in cumulation. Different crews were also compared as to their efficiency in this regard on the same screen as were day-to-day and week-to-week trends.

Spill-Over of Focus on Data

Some of this focus on data is surely driven by the scale of operations at OT. Given the number of truck movements per shift, it makes sense to try to maximize these movements down to the final ton near the maximum pay load in repeated activities. With the focus on safety, I see a clear trajectory by which this focus might “spill over” (not in an, er,  accidental fashion of course) from OT to other Mongolian activities. With data-driven efficiency, I am not so sure. Obviously, this data utilization requires planning and investment resources that might make it cost-effective only on a large scale and not applicably to many business contexts in Mongolia. What does seem applicable, however, is the deliberateness with which processes are designed and monitored.

Posted in Oyu Tolgoi | Tagged | Leave a comment

New to Ulaanbaatar April 2019

By Julian Dierkes

I’ve been keeping lists of things that are arriving to/disappearing from central Ulaanbaatar: December 2018 | August 2018October 2017June 2017 | May 2016 | December 2015 | May 2015 | May 2014 | October 2013 | October 2011. More informal versions of these observations also appear in the /ulaanbaatar/change/ category.

I’ve copied the 2014-18 lists here and am adding to it. New items since previous posts appear in italics. Since this list has been growing, I’m also beginning to delete some items that I’ve had on the list for some time. Strikethrough means that these items will be off the next list.

What has arrived?

  • sadly: Louis Vuitton, KFC, Burberry Kids, Ugg and a Porsche dealership
  • child seats
  • sidewalks
  • parks
  • farmers’ markets
  • yoga
  • pet dogs on and off leashes

  • Sunday morning joggers and bikers
  • 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)
  • the “#замчөлөөл” hastag, a city campaign to shame property owners about their infringement of public space. Seems – quietly – very successful when you look at many photos posted.
  • large-scale BBQ extravaganza on the banks of the Tuul river, particularly near the ASEM Road. On summer weekends, so many cars parked right on the riverside, BBQs planted right next to them, families camping out, some literally
  • Harley-Davidson (now seemingly endorsed by new PM U Khurelsukh)
  • drive-home service for drivers who have been drinking. You call the service, they drop off a driver who drives you home in your car and is then picked up again. Given – fortunately – much stricter enforcement of drunk driving laws, a great service!
  • bike lanes and bike parking, being shooed off bike lanes by riders (though not in December!)
  • street names and signs in the city
  • fat tire bikes
  • home air filtration systems that everyone is talking about
  • airport road is getting ever fancier, now there’s a giant overpass under construction just before crossing the Tuul on the way into town. Lots of fancy on/off-ramps popping up everywhere on roads.
  • Canadian cold weather brands, Canada Goose and Arc’teryx are everywhere, fake or not
  • fully electric cars (though I don’t know where they charge)
  • electronic payment systems. There are a number of apps issued by Mongolian banks. There are some QR-code based payment systems. Often credit card payment is approved via a fingerprint reader.
  • coffee roasting. Not only is instant coffee being beaten back (it obviously still reigns in the country-side), but beyond mass market chains, small roasteries are now appearing in the market. Some Mongolians are speaking of a new coffee addiction.
  • surveillance cameras. I recall seeing these first at large intersections, presumably to monitor traffic. Now, every other buildings seems to have haphazardly attached a CCTV camera to its facade. I do wonder how many of these are operational and where the feeds lead and if any of them are monitored.

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, er, Chinggis Khaan Square
  • open gullys/missing manholes
  • street kids (they seem to come and go. In summer 2017 there were very few of them again.)
  • packs of dogs
  • smoking
  • hillside Chinggis visible from the city centre as more tall buildings are constructed

What will appear in the future

  • navigation systems
  • mental maps shifting to street names/addresses instead of landmarks
  • new airport, apparently opening in 2019. I drove by there in summer 2017. Oh my, it is far from the city!
  • subway (really, I wish they had selected light rail instead, but who knows whether either will come)
  • 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)
  • network of cross-country riding (bike and horse) trails (though not in central Ulaanbaatar)
  • parking (meters), electric charging in parking spots/lots
  • Combined Heat and Power Plant #5 (yeah, right!)
  • hipsters discovering УАЗ (minivan and jeep)
  • giant hole blown into Bogd Khaan mountain to “drain” polluted air out of the valley (that actually is a proposal, but it will not appear! There also seems to be a proposal to blast away mountains on either end of the valley to let bad air escape!)
  • some kind of traffic routing system with overhead displays
  • tap payment system, perhaps using the transit card
  • Mongolia-themed coffee travel mugs

What will disappear in the medium-term future

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

Actually, since I have been predicting this as “near future” change for some years now, I guess I was wrong with all these predictions, and have changed the listing to medium-term 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 long-term future

I mean around 7 years or so. None of these seems to be coming true quite yet, so I’ve changed the name of this category from medium-term to long-term.

    • 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 [actually, they seem to be making a bit of a fashion comeback among young people]

  • some of the downtown university campuses
  • buildings of 4 floors or less in the urban core
  • Russian minivans (УАЗ452)
  • the Winter Palace. It won’t disappear entirely, but it is more-and-more surrounded by a very urban and very tall landscape making it look somewhat forlorn, a fate it shares with many other buildings

Posted in Change, Curios, Ulaanbaatar | Tagged | Leave a comment

Guest Post: Cybersecurity or Cybercensorship?

By Otgonpurev M

According to an article by ikon.mn policymakers in the Mongolian parliament perceive fake news that appear on social networks as a cyber attack.  Officials have responded to the demand to combat cyber harassment and the spread of fake news with a proposal for a Cybersecurity Law.  The response included measures like the establishment of a National Cyber Incident Response Center (probably CERT) and mandatory registration for social media accounts using national identity number and mandatory ownership assignment for mobile subscribers.

I personally agree that the spread of fake news is becoming a threat to our national security by manipulating the uninformed public and influencing the politics and policies. As an ex-vice minister of Justice mentioned in an interview, the primary information source for a majority of the people already became online news sources according to the research done during the beginning of 2019. The so-called trolls or fake social media accounts spreading hoax or controversial news against politicians or disseminating hate content against specific ethnic groups (such as Chinese) are the primary examples of fake news in Mongolia. But I don’t believe that the proposed Cybersecurity Law would be an effective tool to fight this battle. My reasons are:

  1. Basically there is no effective and 100% foolproof solution to control the attribute and ownership of identity on online space. Even if there was one, it is just a matter of time to find a work-around in this age of rapid technological development. And if you can’t impose a control that covers everyone, then that control could be selectively applied and potentially misused for malicious purposes and might become a tool to silence whistleblowers and political opponents.
  2. It is true that Mongolia is in need of cybersecurity legislation. Apart from a sentence that has been included in the National Security Directive of 2010, there is no regulation whatsoever in terms of cybersecurity. The authority and mandate who would respond and prevent to national-level cyber threats is still not yet clear and no specific policies for inter-agency cooperation or handling of critical infrastructure exist.
    The proposal for a cybersecurity law has been circulating for a while but has never reached the stage of an actual bill. I’ve participated in public discussion of the proposal in September 2018. From that discussion it was clear that online censorship was primary objective of the bill. For example, the proposal version of September 2018 states that the National CERT who is supposed to be the responder to national-level cyber threats has the duty to limit and remove what authorities determine to be fake news. Conceptually, the tasks of security engineer or security institution would include preserving the confidentiality, integrity and availability of information no matter the contents of the information.
  3. The proposal mentioned mandatory registration using National Identification Number (NIN) to use social media in Mongolia effectively undermining the anonymity of the users. Even though there has not been a case of a successful anonymous whistleblower in Mongolia, I personally believe that preserving online anonymity is a fundamental human right and UN, U.S. Supreme Court and organizations like the Electronic Frontier Foundation (EFF) agree. Having a traceable attribute to an online identity could potentially become a tool to harass socially vulnerable groups and limit the freedom of expression.
  4. The technical details and solutions of these controls are not clear as of now. The national identification number (NIN) is confidential only in theory and there are publicly available records of personal information that includes names, NIN, date of birth etc. Additionally the NIN itself is not fully random and could be derived as a function of a person’s birthdate, birthplace and gender etc. Thus having a mandatory registration using NIN does not guarantee the non-repudiation requirement of the security. In other words if your personal information is compromised, how would you prove your authenticity that you are not the person who spread the fake news? There are similar problems with the solutions of using authentic mobile subscription numbers to register for social network.

Therefore I believe that even though we are in dire need of cybersecurity legislation it should not be aimed at censoring online contents and undermining the anonymity of the users. An attempt to regulate online identity would potentially harm our democracy. Rather, I believe the soft controls such as educating and campaigning for online literacy would be more effective tools to prevent from spread of fake news and online harassment.

About Otgonpurev

Otgonpurev Mendsaikhan is a security engineer and board member of Mongolian Cyber Emergency Response Team (MNCERT/CC).

Posted in Law, Media and Press, Otgonpurev Mendsaikhan, Security Apparatus, Social Change, Social Media | Leave a comment

The Likelihood of Political Renewal

By  Julian Dierkes

Why I am generally optimistic about Mongolian developments, Mongolian politics presents a lot of challenges and the current state of affairs causes more despair than it has in the previous 12+ years that I’ve been paying attention.

The recent SME Fund corruption scandal mobilized a lot of protest online, but did not lead to large scale demonstrations. Neither did the dismissal of УИХ speaker M Enkhbold, or legislative changes to judicial appointments.

Posts in this series so far:

Now, let me consider the rebirth of political parties and thus the party system that will further institutionalize democracy in Mongolia.

A Process Toward Political Renewal

My guess is that political renewal might come either from within the powerful parties (unlikely in the medium term, unclear in the long term), revolution (always risky in terms of outcomes, unlikely in the short, medium and long term) or new political forces (attempts at establishment very likely in medium term, success less clear).

MAHAH: The Foggy Old Parties

Judging by the past several years, the two large parties appear to be unable to reform themselves. Corruption has become systemic, brief spurts of attempts to define a policy platform that would distinguish one party from the other, flounder, the leadership of both parties sees little turnover. Recently, Damdinnyam and I pointed to the various ways in which both parties have been involved in the long-term corruption of the political system. The Democratic Party seems paralyzed by the combination of the failures of its time in government until 2016, a lack of turnover in its leadership, and the apparent division between the party and its highest elected official, Pres Battulga (who, of course, formally is no longer a party member). PM Khurelsukh seems to have won the power struggle against Enkhbold’s “city” faction, but that has been just that, a power struggle, not a movement for renewal or reform, or any political substance.

The inability to reform themselves seems deeply embedded in both MAHAH parties, and there are real structural obstacles to reform, particularly around patronage relations and factions that have emerged over many years now. While party schisms are constantly a threat, even more so for the divided DP than the MPP, ultimately, few actors really want to spin off from the two parties as they offer significant political resources and infrastructure. This is what gives MAHAH its staying power.

Yet, there is always a chance that some actors within the two dominant parties see political opportunities in widespread dissatisfaction with the parties. Anyone who can make a credible case for real reform or, sadly, anyone who can appear to be making a credible case probably has a chance to rally some discontent around him- or herself to build a power base within either party. In the contest of demonstrations, I have asked how we might recognize genuine vs. paid-for protests; this would be no easier in the case of party reform.

The political opportunities associated with discontent do hold the possibility of real and maybe even radical party reform in the long term.

Revolution?

What are the chances that protests somehow build up into some kind of gentle revolution, leading to a radical shift, for example through a constitutional assembly or something like that? Low, I think.

To be sure, I think that the chances that we’ll see a violent revolution of sorts are very low, fortunately. The military or any other formal elements of the security apparatus are extremely unlikely to get themselves involved. We have seen almost no history of political violence in Mongolia with some exceptions like the murder of S Zorig in 1998, the violent protests following the 2008 parliamentary election, or the death of L Bolormaa in 2015.

But Mongolia’s most recent revolution, in 1989/90 was also not violent yet it led to a radical change in the political system from one-party state-socialism to a multi-party democracy. So could there be another gentle revolution to reform democracy?

And, obviously, any kind of radical change like a non-violent revolution bears a lot of risks in terms of what outcomes might come from it. In Mongolia’s current situation, almost the whole spectrum of outcomes seems possible, from some kind of authoritarian rule to a renewed democracy.

New Parties

There are a lot of doubts among Mongolias regarding the chances of new political actors establishing themselves. Most of these doubts focus on the low chances a new actor might have in elections.

Some Barriers to New Parties

Party Registration

As a democracy, of course, the Mongolian political system is principally open to the formation of new parties. There are some practical hurdles in terms of the registration of a new party, but these are practical hurdles only, not principle obstacles.

Party Finance

Election campaigns have long been seen to be very expensive, mainly for the advertising costs they incur. Frankly, this has been a bit of a mystery to me, as a well-organized grass-roots effort relying on social media would likely have a decent chance at gaining some traction, given the level of online participation, certainly in Ulaanbaatar and other towns. Generally, however, most observers guess that new parties would have a very hard time raising the funds necessary to campaign. A reform of party finance has been proposed as part of new party legislation, but seems very unlikely in the run-up to the 2020 election.

Media Access

Media ownership by political actors is a feature that has been worrisome in past elections. For the chances of a new political actor, this is a significant aspect as the absence of media ownership might give such a new actor a significant disadvantage in mobilizing voters.

Electoral System

In past elections, Mongolians have experimented with a number of different electoral systems, most of them majoritarian in some form or another. While there are lots of discussions of different electoral systems, the election law has generally been passed at the very last moment and not benefitted from much public discussion. From my perspective, many Mongolians also attach way too much significance to that choice (as to the choice of parliamentary vs presidential systems generally), as many electoral systems work in terms of translating voters’ desires into a government, though different systems have different advantages or less attractive aspects. Majoritarian systems do make it difficult for new parties to gain a foothold, certainly in a single electoral cycle.

Posted in Constitution, Corruption, Democracy, Democratic Party, Foreign Policy, Human Rights, Ikh Khural 2020, Inequality, Judiciary, Mining Governance, Mongolian People's Party, Mongolian People's Revolutionary Party, Nationalism, Party Politics, Policy, Politics, Populism, Presidential 2021, Social Movements | Tagged | Leave a comment

Not the end of Democracy?

By Julian Dierkes

On March 27 2019, the Mongolian parliament passed legislation giving the National Security Council greater authority over judicial appointments and dismissals.

This very sudden decision has caused a great deal concern among international observers of Mongolia and some Mongolians themselves. Along with a number of media reports, I wrote about this decision in a previous blog post, c0-authored with Boldsaikhan S.

Since then I had the chance to travel to Mongolia which is always an opportunity to get a somewhat more complete picture of a situation  that from afar.

A General Disclaimer/Digression

Before I try to disentangle and complexify the current situation, let me mention that one of the on-going frustrations with tracking legislative decisions and parliamentary debates is that decisions are often very difficult to fully understand and/or to get accurate information on decisions. This has baffled me for some years. I will see a piece of news (most likely on Twitter, my main source for these kind of breaking news in Mongolia) and will take a stab at understanding what is going on. My Mongolian is generally not good enough for details/specifics of legislation for example, so I turn to contacts to try to understand. To my surprise, my contacts often respond with different, sometimes even contradictory information. Frequently, this leaves me very cautious in discussing a decision as I am uncertain of its details.

I should note that such uncertainty generally does not come with political news in Canada, Germany, or Japan, the other contexts where I pay close attention to current events. Why not? Because governments and political parties can be relied on to clearly communicate these kind of decisions and the media quickly and decisively analyze such communications. Neither is consistently the case with Mongolian legislation, at least in my experience.

Take the quasi-editorial that Mungunchimeg G wrote for the Mongol Messenger three weeks after the parliamentary vote as an English example.

This is much more of an editorial than reporting and it does not really clarify any questions one might have about the legislation.

In recent developments, the general lack of communication and analysis has been compounded by the fact that legislation was introduced, amended, and voted on very suddenly, virtually overnight. This has happened with several other very important pieces of legislation, going all the way back to the Windfall Profits Tax which was passed by a half-empty parliament on a Friday in 2006. This kind of overnight appearance of major legislation is not good parliamentary practice and certainly does not inspire much confidence in the intent of the legislation, particularly when other pieces of legislation linger for months before being added to parliamentary agendas.

Back to the Main Issue: Checks and Balances

Among the reasons why the recent legislation has prompted strong responses is that it is perceived by some to undermine one of the essential ingredients of a functioning democracy: the independence of the judiciary. As far as I can tell, the legislation gives the National Security Council (consisting of president, prime minister and speaker of the Ikh Khural) the power to dismiss judges and other appointed officials in the judicial system on request of the Judicial Council. The Judicial Council is appointed by the president, of course.

Proponents argue that a) the legislation is constitutional (as the constitution provides for judicial law to specify details, though the constitutional court will rule on that), b) the current situation (corruption, torture, lack of performance of the judicial system) is so bad that it called for drastic measures, and c) the increase of the power of the National Security Council strengthens democratic oversight by requiring ascent of its three members, rather than weakening democratic control over judiciary appointments as others have argued.

While appointments were previously controlled by the president (via nomination and the Judicial Council), dismissals are now possible, though only via the National Security Council, that is, with the agreement of at least the prime minister or the speaker of parliament.

Reactions

Many Mongolians seem to approve of this change having been convinced by the argument that the judicial system has become so corrupted that it needs to be “cleaned up” in a hurry and thoroughly. It is the cumulation of corruption cases that go seemingly un-prosecuted that has convinced many people of the need to reform. Add to this the appearance of video-taped evidence of corruption, and it seems that many Mongolians are eager for action to be taken on this issue.

By contrast, many foreign observers and some Mongolians emphasize that the power of dismissal is a dangerous power because it allows those in power to undercut investigations against themselves easily. While the appointment of an official might make someone hope that the appointed official will be grateful for their appointment and go easy on themselves, any appointed official could be seen as a threat to subsequently elected officials. Yet, this is the very essence of the independence of the judiciary, namely that it is able to also investigate those currently in power. To a limited extent, the judiciary “guards the guardians”. With the current changes, that guardianship does appear to be weakened.

Leap of Faith

Many observers worry that the current change places a significant measure of faith in current office holders to “clean up” the judiciary. While the case for these changes includes references to the presumed corruption of former president Elbegdorj and his appointees, it has to be taken on faith that the current president, prime minister and speaker will not be corrupt. Most constitutional structures are constructed precisely so that such faith is not required.

There is also a lot of faith placed in the current constellation of actors. In typical fashion, there was much discussion in Ulaanbaatar last week about the different alliances and coalitions that people see among politicians. But, constitutional structures should not be built around the question of whether President Battulga and Prime Minister Khurelsukh are primarily rivals (presumably turning the National Security Council’s involvement into judicial dismissals into a limit on the president’s power), or whether they are secretly collaborating. Constitutional checks and balances are precisely intended to be resilient in the face of different governing constellations.

One of the suppositions I heard most frequently in Ulaanbaatar was that Khurelsukh and his MPP traded support for the judicial dismissal bill for restrictions on presidential power that constitutional reform might propose. Constitutional reform has been discussed for some years now. I would have to guess that it is unlikely to come to parliament this year and would be caught up in electioneering if it is not introduced this year. However, just like the judicial dismissal legislation, who knows how suddenly constitutional amendments might be introduced.

Yet, I do recognize that these changes appear to have the support of many Mongolians and that ultimately it is up to Mongolian voters to determine whether they support the parties and individuals who have initiated these changes or to vote them out of office in the next election.

Thinking Out Loud

My recent visit points to a number of topics that I will try to address in subsequent posts:

  • Why did everyone accuse me of being biased, all of a sudden?
  • How to avoid emotional reactions to political developments?
  • What are “red lines” that should not be crossed to maintain Mongolian democracy?
  • Have I underestimated the important of the rule of law in past assessments of political developments?
Posted in Constitution, Governance, Judiciary, Law, Public Service | Tagged | Leave a comment

World Class Oyu Tolgoi Safety

By Julian Dierkes

{Disclosure: I was invited to visit Oyu Tolgoi by the company and enjoyed their hospitality.}

In press releases, but also media accounts, Oyu Tolgoi is often described as a “world-class” deposit. To the extent that this meant anything to me, I mostly associated it with the size of the deposit. A visit to the site made me realize that “world-class” is also a corporate ambition for the operation of the mine.

I say this based on a comparison to a handful of other mines that I have previously visited in Canada, Kyrgyzstan and Mongolia. These mines have been of varying scale and have involved a variety of operators with open pits as well as underground operations.

First Impressions

At first, it seems quite incongruous to arrive at the Oyu Tolgoi site. A short drive from the ger-shaped airport (gerport?) leads through a fairly typical Gobi landscape. At the moment there are a lot more grasses based on last year’s unusual rainfall, but what was most notable to me on the approach was how ordinary the landscape is. Somehow my eye and my searched for hints of a great treasure of copper and other minerals, but couldn’t find it. Of course, in the history of the discovery of Oyu Tolgoi, exposed rocks containing copper not only played a role, but likely also serve as the origin or the name of the site, turquoise hill. Yet, that hill was just a small peak, and a layperson like me would not have imagined a large mineral deposit on site.

On arrival, I am not surprised to be asked to blow into a breathalyzer. This is standard practice at many – though not all – mines. We sign in and are issued with visitor passes. Security is not tight in the way that it is at gold mines, but the entry onto the site already hints at the scale of the operation at OT.

The next impression is that the traffic system resembles that of a small city, just with a lot more trucks and with SUVs that have springy flags attached. A road system complete with stop signs, directional signs, etc. Yes, of course one has to get around even on a mine site, but it is the extensiveness that comes as a surprise. Power lines criss-cross the entire site. Ger camps, container-style housing, and administrative buildings are visible, many people are moving around and between them.

Operations

During tours of the underground operation, the open pit, and processing, two aspects struck me in particular: safety and the intensity of the application of data (analysis). Below I write about risk management, with a follow-up post on ubiquitous data applications to come.

Safety

I had first encountered Rio Tinto’s self-imposed “obsession” with safety at meetings in the Monnis Tower in Ulaanbaatar. At the first encounter, starting a meeting with a safety reminder by the meeting host or chair seemed a bit quaint and even stilted. But as I encountered this more often, it made more and more sense to normalize reminders for safety concerns, even when these might be seasonal health issues or the ever-present “fasten your seat belts” reminder. I was actually so interested in this idea of a consistent message to begin meetings that was fundamental to operations that I introduced this in my own university administrative practice, though not focused on safety, rather on a central aim of the faculty that I work with.

But OT takes the focus on safety to another level that I had not seen at other sites.

Yes, our van driver actually waited until hearing a clear <click> from the seat belts, but he also came to a full stop at every stop sign. Parking with the front tires in a bit of a dip is relatively common practice on mining sites.

But even more noticeable is the “critical risk management” approach that has been adopted at OT.

 

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Mine rescue service is obviously also part odd risk management at OT.

A post shared by Julian Dierkes (@jbdierkes) on

A set categorization of 19 risks that employees face has been developed and everyone is reminded of these risks throughout the site. Risks are associated with graphic signage and these signs are EVERYWHERE. I can only imagine that these signs become part of the landscape for employees and are not as noticeable as they are to the first-time visitor, but the extent to which they consistently appear everywhere is a reminder of how seriously this issue is taken. Obviously, we were required to wear hard-hats, steel-toed shoes, safety vests, and goggles, and the briefing before we went underground was comprehensive and included use of the oxygen mask, operation of the CO2 sensor, and later details about the refuge chambers, but there were constant reminders of how to address safety risks from holding on to hand rails to the giant poison skull posted over access to a part of the concentrator facility.

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Okay, let’s go underground. Helmet, goggles, headlight, CO2 sensor, and oxygen mask on the hip.

A post shared by Julian Dierkes (@jbdierkes) on

But it’s not just signage where risk management is so visible.

In all management and administrative rooms, there were posted signs detailing recent incidents. For the data nerd, these are fascinating, but they also seemed to provide a telling glimpse into corporate culture.

Instead of having some generic safety reminders (“Don’t use your chair as a ladder”) of the kind that are posted all around Canadian universities, these posts referred to specific incidents, offered an analysis of what caused the incident and whether any injuries were sustained. The posts thus also went significantly beyond the typical “??? days accident free” boards that are common around mines and other industrial sites. These posts included photos and pointed to follow-up if needed or completed already. For example, one post I saw reported on a tripping incident where an employee was carrying a small load, but tripped over the edge of a ramp. Instead of blaming “operator fault”, this particular post pointed to the existence of the edge as a cause of the incident and noted that this had been reported to appropriate colleagues to try to address this issue.

Conclusion

OT has frequently pointed to its safety record in public statements. I suspect for most Mongolians or other observers like me, the real depth of the meaning of these statements is not alway clear. But, visiting the site, I recognized not only the depth of the effort in this regard, but also how this effort is introducing “world class” management and operations to Mongolia that hopefully can spread beyond a specific mine and generally raise safety standards.

Example of where it would be great for safety consciousness to spread:

Posted in Gobi, Oyu Tolgoi | Tagged | Leave a comment

Toward a Transition Away from Coal

By Sandeep Pai and Julian Dierkes

In November 2018, Tsenguun T and Aldarsaikhan T wrote a guest post describing the Mongolian podcast scene. Since then, more podcasts have sprung up, for example, recent guest post co-author Boldsaikhan S is involved in the “54 Cups of Coffee” podcast.

No surprise then, perhaps, that Julian has been wanting to talk about Mongolia for quite some time, having enjoyed his podcast debut on UBC’s Meiji 150 podcast to talk about portrayals of the Meiji Restoration in Japanese history textbooks.

So, here it is, a discussion between Julian and Sandeep that Tsenguun was kind enough to host on the Sustainable Mongol podcast:

After introducing ourselves in the episode, we spend some time talking about the report of the German “Coal Commission” that provides a blueprint for a move away from coal and what opportunities this might represent for Mongolia. Most significantly, as China commits to de-carbonization of its energy, Mongolia may well have significant opportunities for energy export to China derived from renewable resources. In this context, the Gobi Desert provides obvious opportunities for large-scale deployment of solar panels.

To reach its potential Sandeep drew on global trends to point to three central challenges that Mongolia might face in its transition:

  • Infrastructure needs/cost
  • Storage and transmission
  • Political inertia

Coal-Free Mongolia in 2040

We finished our discussion with our initial list of “action items” for Mongolia that might move it toward a vision of a coal-free Mongolian in, say, 2040.

1. Aid/investments from international financial institutions for expansion of existing grid, storage
The infrastructure that would enable the export of energy is hugely expensive. Not only would it require a massive upgrade of Mongolia’s grid, but this grid would have to be connected into a Chinese if not Northeast Asian grid. The construction of renewable energy “power plants” can occur on a smaller scale and does hold some promise of profitability which is why that is happening to some extent already. But the grid will likely have to be financed by public investments and given Mongolia’s fiscal situation, this will require international financing.

2. Investments toward utility-scale solar and/or wind power plants in Gobi Desert: begin training people, develop engagement and assessment processes
If Mongolian policy-makers can be persuaded that there is a promising future in renewables and if that future seems likely to only be 5, 10, 15 years away, foundations should be laid now. That means that education and training can pivot in this direction, but governance structures also need to be developed. Some of these structures might come from the mining industry, for example large-scale solar power plants might also require “local-level agreements” like they have been mandated for mining projects.

3. Ambition to become a net exporter of electricity to China
To realize the potential of renewables, there needs to be political discussion and ultimately commitment to a strategy that sees energy exports to China as a sustainable economic path in the future. Obviously, this would further exacerbate Mongolia’s dependence on China, so that may be a difficult step to take politically and will require more engaged debates.

4. Maximize opportunities for electrification to combat air pollution in Ulaanbaatar and other towns
Currently, it seems like massive electrification of Ulaanbaatar and other towns is the most direct way to combat air pollution. But if that electrification is powered by coal, then the positive impact is limited to local air pollution. Instead an upgrade to the grid and the development of renewable energies will combat local air pollution and offer economic promise.

5. “Just transition” plan to create good jobs by development for clean energy
Some resources that have been focused on mining coal will have to be re-deployed toward renewable energies. That is not an easy process around the world with the displacement of jobs, private and public investments sunk into coal, political lobbies in place, etc. A strategic approach to this transition will ease the difficulties that the transition will bring with it.

About Sandeep

Sandeep Pai is a PhD student & Public Scholar at the Institute for Resources, Environment and Sustainability at UBC. Much of Sandeep’s research focuses on finding ways to make a global energy transition away from coal. Prior to UBC, he completed an Erasmus Mundus Master of Environmental Sciences, Policy, and Management, jointly taught at Central European University, Hungary, Lund University, Sweden and the University of Manchester, UK. He also holds a Bachelor’s degree in computer engineering and a Postgraduate Diploma in Journalism. Professionally, he worked for several years in South Asia as an award-winning journalist, writing for national and international newspapers and magazines. Recently, he co-authored a book “Total Transitions: The Human Side of the Renewable Energy Revolution

Posted in Air Pollution, China, Climate Change, Development, Diversification, Energy, Foreign Investment, Infrastructure, Podcast, Policy, Policy, Renewables, Sandeep Pai, Social Media | Tagged | Leave a comment

The Beginning of the End of Democracy?

By Julian Dierkes and Boldsaikhan Sambuu

Mongolians have voiced strong reactions to the proposal and the passage of a series of amendments to the laws governing the appointment and dismissal of judges, the Prosecutor General, and the Head of the Independent Agency Against Corruption. These amendments were hastily proposed by President Battulga and passed within a day by the special session of parliament on March 27. The vote came down to 34 MPs voting for and 6 against with 35 abstentions. Some, including legal experts, former MPs and ministers are speaking of the beginning of the end of democracy in this context.

Given Mongolians simmering frustrations with political parties, perhaps it’s not surprising that many observers are on edge when it comes to second-guessing Pres Battulga’s intentions in reconfiguring institutional structures. So, what’s behind the proposal on judicial dismissal and what do we make of it?

The March 26 Proposal

The amendments to the Law on the Legal Status of Judges grants the power to dismiss all judges to the National Security Council (NSC), which is made up of the President, PM, and the Speaker of Parliament. On the face of it, the amendments do not exactly grant this power to the council literally. Instead, they state that judges shall be removed if the NSC makes such a recommendation based on the request of the Judicial General Council of Mongolia, which is a constitutional body that is responsible for ensuring the impartiality of the judiciary. However, a closer reading of the relevant laws reveal that all five members of the General Council are appointed by the president. Consequently, these amendments might expand the power of the NSC and especially that of the president over the judiciary to the extent that judges may not be able to operate independently of political influence.

The new law also allows the NSC to ask Parliament to dismiss the Head of the IAAC and the Prosecutor General before their terms of office expire. Previously, these offices were appointed by parliament for a fixed term of 6 years so that they may remain independent of elections and of undue political influence. Although Parliament still retains a final say, the new law may make these institutions vulnerable to political pressure.

The Argument for this Proposal

Pres Battulga justified his proposal by arguing that the judicial system of Mongolia is directly controlled by a “political-economic” interest group, and alleged that judges, prosecutors, and other law enforcement authorities serve only the interests of those who have appointed them. He claimed that this politicization of the judiciary intensified under his predecessor’s tenure. It is worth noting that Battulga has repeatedly requested the Prosecutor General to investigate ex-president Ts Elbegdorj. The country’s top prosecutor has so far resisted the president’s pleas by insisting that his office must remain independent of political meddling.

Pres Battulga further argued that law enforcement authorities create false criminal charges for political reasons while ignoring many legitimate and serious crimes. He cited, among others, Erdenet and Tavan Tolgoi cases as examples. However, what seems to really made the difference among the MPs was the revelation of the previously classified video tape that allegedly shows law enforcement authorities using torture of the get confession from the suspects of Zorig’s case. The video seems to have convinced enough MPs of the narrative that the judicial authorities act with impunity and helped make the case that more oversight is necessary. Just precisely how and why the NSC is the best institution to provide that oversight was not effectively argued by the president or by his supporters in parliament. Instead, speaking in favour of the proposal, MPs like J Batzandan vaguely but passionately spoke about the need for taking control of the judiciary in order to fight against the so-called “MAHAH mafia.” Moreover, since the video was not shown to the public, it is difficult to say whether the MPs who spoke about changing their mind after seeing the tape were indeed genuine. It is also worth noting that the so-called “unresolved cases” the president listed strangely excluded the Small and Medium Enterprise scandal, nor does it mention the railroad embezzlement scandal for which Battulga himself was once being investigated by the very institutions he is now targeting.    

Mongolians’ Reaction

Reaction on Twitter was swift and harsh while Facebook was dead silent, a pattern that also prevailed in the early days of the SME Fund scandal. Mongolian lawyers were nearly unanimous in their condemnation of the amendments with some even calling them a soft coup. There were a plethora of claims that the new law violates the Constitution, which explicitly guarantees judicial independence. The DP issued an official statement rejecting the proposal and boycotted the subsequent vote.

What Does this Proposal Mean?

All evidence suggests that Mongolians remain devoted to democracy in the abstract. Yet, frustrations are mounting to the extent that major institutional upheavals seem likely in coming years. One of the scenarios and perhaps the least attractive one is of a gradual take-over of state structures by some kind of “strong man”. Few would dispute that Pres Battulga would like to propose himself as just such a strong man and few would disagree that he is probably actively looking for opportunities to increase presidential power whether or not that leads to some kind of soft coup. It is worth noting that Battulga has criticized “western style democracy” for Mongolian economic woes and advocated in favour of a presidential system via his surrogates. His chief of staff, Z Enkhbold, recently spoke about the need for Mongolia to join the Shanghai Cooperation Organization, a move that according to some foreign policy experts will rebuke Mongolia’s long-standing third neighbour policy.  

A violent overthrow of any kind seems highly unlikely, so for anyone who does fear a slide into authoritarianism, it’s democracy’s death by a thousand cuts that one might be concerned about.

Yet, corruption is one of the main factors undermining democracy, so are more executive powers to act against corruption in the bureaucracy not a good thing?

To make that case, one would have to be convinced that something is to be gained in a fight against corruption by reducing the independence of the judiciary. The new law certainly seems to do that by giving the National Security Council more direct powers to dismiss individuals. But does that not imply that no official would want to investigate anything that touches on any of the three members of the National Security Council lest that leads to the official’s dismissal? Whether justified or not, Pres Battulga’s reputation when it comes to corruption is not squeaky clean, so it seems difficult to argue that his proposal to reduce judicial independence would be seen as a positive step by many Mongolians.

About Boldsaikhan Sambuu

Boldsaikhan Sambuu is a PhD student of Political Science at Waseda University in Tokyo, Japan. He is also the host of the podcast show, “54 Аяга Кофе

Posted in Boldsaikhan Sambuu, Corruption, Governance, Judiciary, Law, Public Service | Leave a comment

Guest Post: China’s Belt and Road Initiative – Mongolia Focus

By Connor Judge and Sanchir Jargalsaikhan

Myriad conferences, expos, forums and articles have recently elevated the profile of acronyms “OBOR” and “BRI” to a par with “blockchain,” the latter being a ground-breaking technology that few fully understand, but which has the potential to fundamentally transform the human experience. The Belt and Road Initiative (BRI) is seen by many to promise the same, but ambiguity remains regarding risks, benefits and wider implications for partnering countries. This article explores Mongolia’s BRI experience and manifestations of its own Third Neighbour policy. We hope to demonstrate the case is useful for framing other global experiences and foreign policy approaches.

China’s Belt and Road

The BRI will operate in more than 66 countries, comprising around 40% of global GDP. The spearhead international organisation for BRI is the Asian Infrastructure Investment Bank (AIIB), composed of 69 members (regional and nonregional) and 24 prospective members.

BRI is premised on the broadest range of global sectoral initiatives. It can and has remained flexible enough to co-opt any situation or geography beyond the Silk Road Economic Belt (SREB) proposed by China’s leader, Xi Jinping, in Kazakhstan in 2013, now extending into the African subcontinent and even Latin America. Central Asia is the historical heartland of the Silk Road, but even today functions as a pivotal alternative to maritime routes riddled with strategic “chokepoints.” BRI thus consists of six proposed “economic corridors” with substantial overland components. Finally, the price-tag for this venture ranges inexplicably from between $1 trillion to $26 trillion over a vague time-frame (from decades to a century).

This level of discourse sums up the BRI as a whole at present. BRI is not incorporated or trademarked in any substantive way other than within the Chinese Communist Party’s (CCP) constitution, amended in concert with the 19th National Congress in 2017. Even BRI’s official website (yidaiyilu.gov.cn) does not comprehensively list projects. It is an unowned process that can mean everything from infrastructure investment to cultural exchange, and by meaning everything, it ultimately means nothing. A social constructivist mindset most appropriately suggests that the Belt and Road is simply what we make of it. While there is no shortage of professionals in business and academia claiming to know what falls within and beyond its scope, they neglect that stakeholders from the provincial to state-owned enterprise (SOE) level have considerable agency in shaping the initiative. Hence Jinghan Zeng has accurately described BRI as an unsealed “policy envelope.”[1]

The China-Mongolia-Russia Economic Corridor

What parts of Mongolia fit into this broad policy envelope? The northernmost of the six BRI routes is the China-Mongolia-Russia Economic Corridor (CMREC), which follows the pre-existing Trans-Mongolian railway and AH-3 Highway Route (1041 km) passing through Irkutsk, Ulan Ude, Altanbulag, Darkhan, Ulaanbaatar, Nalaikh, Choir, Zamiin-uud and finally in Erenhot in China. The primary domestic route within China traverses Zhangjiakou (Hebei Province) en route to the port of Tianjin. This sub-initiative, called the “Prairie Road,” is the only viable route in the medium term which actually involves Mongolia.

In June 2016, Xi, Elbegdorj and Putin signed the “Project Outline for Constructing the China-Mongolia-Russia Economic Corridor.” The document is mainly rhetorical, calling for promotion and simplification of trilateral customs and investment regimes. The international funding organisations were proposed to be comprised of, but not limited to, the AIIB, the BRICS New Development Bank (which only funds projects in BRICS countries), the Shanghai Cooperation Organization (SCO) Interbank Consortium and Silk Road Fund (SRF). The chief executive bodies were also agreed to be China’s National Development and Reform Commission (NDRC) and the Mongolian Ministry of Foreign Affairs.

Remaining proposed routes are wishful visions, with the western sections more likely to be subsumed by the New Eurasia Land Bridge Corridor. The 250 km dedicated railway from Tavan Tolgoi to Gashuun Sukhait/Ganqimaodu, intended to alleviate significant bottlenecks for coking coal crossing the border to Chinese processors, is the only other promising route under construction, but a funding shortfall has forced Erdenes-Tavan Tolgoi toward a significant overseas equity drive. The prospects for the railway being completed even by the projected 2021 are questionable. Therefore, much of what is now being called the CMREC is a trade route that already exists and is merely being paved and modernised for the primary purpose exporting mineral and energy resources from Siberia and Mongolia to global markets via China.

Other projects in Mongolia

The criteria for what constitute “BRI” projects in Mongolia are relatively vague. In the broadest definition, the Chinese state or SOEs merely need to be involved, and this could apply to proposed hydroelectric dams, wind power, solar power, UHV grids, port infrastructure, free-trade zones, cultural centres, Confucius Institutes and diplomatic exchanges in and of themselves.

Another possible qualification could be whether or not a project seeks funding from one of China’s “BRI” financial institutions such as the SRF and AIIB, in which case the Sainshand-Ereentsav, Nomrog, Bichil crossrail certainly counts. However, despite Mongolia being a founding member, no proposed projects have received approval from the AIIB and there is public acknowledgement by AIIB’s directors that the institution is not a “policy bank” and does not have an explicit mandate to fund BRI projects.

How then is BRI financed in the rest of the world? Expert Mendee Jargalsaikhan has observed that the PRC ambassador to Mongolia does not prioritise BRI for the coming year, whilst simultaneously observing the People’s Bank of China (PBOC), Industrial and Commercial Bank of China (ICBC) and the Export-Import Bank of China (Exim) have opened offices in Ulaanbaatar. However, as of early 2017, the China Development Bank (CDB) and Exim Bank had started funding in excess of $200 billion worth of projects in BRI countries, whilst the triumvirate of PBOC, ICBC and China Construction Bank (CCB) have offered in excess of $500 billion for more than 1,000 projects. The former are policy banks whilst the latter are commercial lenders, but ICBC is the largest bank in the world by asset value (approximately $4 trillion as of 2018).

There has been a departure from the 2016 outline and perhaps opening local branches in the capitol is a step in the right direction for BRI in Mongolia as a whole. That said, although Exim Bank has more of a government mandate, researchers suggest it will still insist on making profitable investments worldwide regardless of BRI’s status (Hameiri and Jones 2018). One may, therefore, question whether the Mongolian government expects too much.

Mongolia’s BRI receptivity and connectivity

President Battulga suggested CMREC is not being advanced quickly enough, stating in 2018 at the Mongolia-Russia Economic Forum, “we wish to accelerate the implementation of the Trilateral Economic Corridor program, which is no more than a dialogue today. Mongolia, for its part, is ready to put all necessary efforts for this development.” This is not simply support for the CMREC, but strong support. At the fourth annual trilateral China-Mongolia-Russia summit meeting on the SCO summit sidelines in June 2018, Battulga also critically stated that despite the project outline being signed two years prior, the three parties should “commence the implementation of the Economic Corridor program.” This implies that he believes not enough has been done, further prompting an MoU on a “Joint Mechanism to Advance the Development of the Economic Corridor.”

How strong is this degree of receptivity relative to other BRI countries? Indebted to a receptivity index (RI) metric devised by Shaofeng Chen (Chen 2017), degrees of receptivity to BRI can be theorised. Criteria could consist of statements of support, Belt and Road Forum (BRF) summit attendance, comprehensive strategic partnerships and joint declarations, linking to existing development initiatives, special economic zones (SEZs), projects under construction, projects postponed, signing the BRI Financing Guidance Principle, inward foreign direct investment (IFDI) and founding AIIB membership. The results of an independent study by Connor Judge suggest Mongolia (RI: 21) appears highly receptive, similar to Laos (RI: 22), contrasted with a less receptive country such as Vietnam (RI: 14) in Chen’s study. Mongolia’s score is significantly boosted when considering structural IFDI, trade dependence and the number of projects under construction. Another significant point is the symbolic linking of BRI to local development initiatives such as the “Road to Development” (Хөгжлийн зам) and Prairie Road.

The inverse perspective could be the “China Connectivity Index” (CCI), published in 2016 by ICBC Standard Bank and Oxford Economics economists, which places Mongolia at the top of a list of 86 countries to be affected by BRI (CCI: 69), followed by Singapore (CCI: 55.5) and then Cambodia (CCI: 44.1). Mongolia tops the trade component of this index given the sheer volume of exported mineral resources relative to the rest of the economy (32.44%), followed by Turkmenistan (21.69%, given natural gas exports which comprise roughly 40% of China’s total natural gas imports). Mongolia also topped the capital component with portfolio investment from China accounting for 7.32% of GDP, followed by Singapore (1.86%). Mongolia was also second to Singapore only in the “people connectivity” component but ranked highly on counts of visitors to China as a percentage of the total population (11.45%) and visitors to China out of total outbound tourists (48.13%).

If China’s leadership truly believes BRI goes beyond mere infrastructure investment, holding the “Five Connectivities” of policy communication, infrastructure connectivity, smooth trade, capital flows and common popular sentiment in equal regard, then by almost all measures Mongolia has already achieved the ultimate BRI standard. From this perspective, securing the country’s increased participation in the initiative may not be a priority for Beijing. Nonetheless, Mongolia’s top ranking is a distortion given an almost artificial asymmetry. CCI is a macroeconomic snapshot rather than a reasoned attempt to define BRI and measure instances of successful collaboration. The same study also ironically noted that economies of Mongolia, Angola, and Oman were at serious risk as China continues striving for global decarbonisation and investment in renewable energy. Whether Mongolia will be receptive to BRI in a predominantly green connectivity context remains to be seen.

The “Third Neighbour” doctrine and Mongolia’s foreign policy

What then are the implications of this heightened receptivity to BRI in Mongolia in light of the country’s perilous political and economic situation? Could the wave of expectations and disappointments concerning BRI lead to a more active and flexible foreign policy such as the Mongolia Third Neighbor Trade Act or an opposing position that complicates Mongolia’s current foreign policy principles?

One case is the bitter public debate about possible Mongolian accession to permanent membership of the Shanghai Cooperation Organization. Even though the Foreign Minister Tsogtbaatar assuaged the public by declaring that there are no ongoing attempts to push the issue to the State Great Khural (Parliament), seeds of doubt have been planted by successive statements from Mining and Heavy Industry Minister Sumiyabazar and Deputy Foreign Minister Battsetseg. In a recent interview, Battsetseg declared, “if Russia and China wanted to annex Mongolia, they do not have to do it through the SCO framework.” This is tantamount to suggesting that the BRI and SCO are more or less interchangeable and that there are no serious security concerns surrounding the latter.

Similarly, the dominant narrative used by pro-membership actors has mostly revolved around highlighting economic opportunities that the SCO could provide whilst downplaying political and security implications. Given the SCO’s heavy focus on security cooperation and successive Chinese attempts to persuade Mongolia to accede fully, many politicians and experts are protesting vehemently, going so far as to declare entertaining accession as “treasonous.” While the assumptions behind both sides’ of the debate in Mongolia are simplistic on the surface, more alarming is the grave misinterpretation of Mongolia’s “Third Neighbor” doctrine, which it has pursued gradually over two decades.

Rather than a straightforward foreign policy strategy that hedges on opposition between Mongolia’s two neighbours and the West, the Third Neighbour doctrine is a collective identity and “world building” construct fostered since the 1990 democratic revolution. It stems from Mongolia’s unique historic and geographic position between two potential superpowers and is influenced by a desire to reconstruct its identity and place in the globalised world of the 21st century. A prominent Mongolian strategist D. Munkh-Ochir perceptively explicates that this concept is “based on the self-perception of a small state with experience of subservience to neighbouring great powers and an indigenous culture, sometimes seen as the ‘northernmost extension of the Indosphere,’ flanked by three of the world’s great civilisations—Christendom, Islam, and Confucian East Asia.” Third neighbours, therefore, are not only limited to serve defensive functions connected with more realist, hard balancing approaches in international relations.

Constructivist dimensions instead occupy the fore. In this wider observation, modern Mongolia’s neighbourhood is not only spatial but also social. The choice of neighbour is ‘political’ in the sense of Carl Schmitt’s distinction between good and bad (Schmitt 1996). As a result, Mongolia’s post-socialist neighbourhood is composed of neighbours that can bolster the country’s development by investing and assisting its democratic consolidation. This new neighbourhood, according to Bulag (2016), “has a built-in paradox of both the political and the anti-political” and can become both the problem and solution. Basing trade, security and integration initiatives solely on this doctrine or assessing its effectiveness exclusively on its economic (i.e., Oyu Tolgoi) or political merits means negating dynamic ideational features of BRI and other international development ventures.

SCO and BRI: Two sides of the same coin?

How can BRI and SCO be contextualised within Mongolia’s Third Neighbour foreign policy framework? Alternatively put, in what way does the Third Neighbour doctrine inform, constrain or shape Mongolia’s foreign policy in the context of BRI?

For Mongolia, a country marked by opacity in any political decision-making, it is difficult to decode reasons behind foreign policy decisions. Where, how, and from whom different policy initiatives come is equally ambiguous. In certain cases, especially where the establishment does not have a consensus on certain policies, answers to these questions come from public performances of politicians or high-ranking officials. Protests against amendments to Mongolia’s Land Law in 2013 and the recent wave of adverse reaction to the SME scandal demonstrate that public discourse can have an immediate and powerful effect on these politicians’ decisions. The political debate surrounding the SCO similarly attests to the existence of political and public discourses specific to Mongolia.

Mongolia’s diplomatic protocol of seeking inclusion in as many neighbourhoods[2] (e.g., ASEAN, APEC, OSCE, East Asian Community) as possible, as well as maximising investment projects is believed to aid its transformation from a landlocked state to a more connected and vibrant spatial community. However, this approach leads to confusion and dissatisfaction about tangible benefits emanating from the same initiatives. On one side, Mongolia’s foreign policy is in line with strategies of other small powers in terms of maximising influence through the platforms of supranational institutions (Melakopides 2010; Pantev 2010). On the other side, many of these supranational institutions, which sprang from the Washington consensus, come with neoliberal conditionality that has led to deep socio-economic inequality, deindustrialisation, and rentier extractive capitalism in Mongolia since the 1990s (Reinert 2004).

This is the arena in which China’s foreign policy, the SCO and BRI by extension complicate the public discourse in Mongolia. Aid and concessional loans from China are often offered relatively condition-free (Yue & Wong 2011), which makes those extremely attractive to many Mongolian politicians. However, some experts observe that (with perhaps the exception of Kazakhstan) other Central Asian states have not gained much tangible benefit from BRI. A layer of complexity is added due to the intricacy of Mongolia’s relationship with China. Mierzejewski et al. (2019) describe how China adopts different kinds of “self” conditional on with whom it is relating:

To its immediate neighbours, China presents itself as a state that needs clear-cut borders. In relation to the developing world (Global South), the PRC narrates “self” as an ideology with the banner of materialism, equality and justice. To its third “audience,” the developed world (mainly Europe), China presents itself as a peaceful, innocent cultural construct based primarily on Confucius’ passive approach. By bringing these three identities into “one Chinese body” (sanwei yiti 三位一体,), China’s policymakers skilfully manoeuvre and build the country’s position in the arena of global affairs.

In this sense, both BRI and SCO cooperation enjoy doctrinal similarities along the second dimension where the “spirit of peace and cooperation, openness and inclusiveness, mutual learning and mutual benefit permeate both frameworks” (Mierzejewski et al. 2019). Still, for many Mongolian experts and commentators, the first security-related face of China (that is the main preoccupation of the SCO) is seen as a straitjacket that could constrain the country’s options. The last face of a peaceful and innocent actor is not widely accepted in Mongolia for historical reasons. The second face provokes more ambiguous reactions as the country’s recent economic difficulties and isolated geography make it unusually receptive as well as vulnerable to BRI. A justified concern thus arises that Mongolia is creeping towards China’s sphere of influence and SCO accession is seen as a precipice.

A neorealist analytical approach to Ulaanbaatar’s foreign policy accentuates both structural and material variables. Emphasis should nonetheless be placed on sub-state level variables, types of political settlement (Khan 2006), the nature of main patron-client networks, and constraints and incentives they face under conditions of international anarchy. The rentier and neo-patrimonial nature of Mongolia’s political settlement has been partially responsible for some foreign policy rhetoric and goals. To cultivate domestic legitimacy, Mongolian elites have at intervals utilised foreign policy to legitimate their aspirations. Individual politicians thus turned outward to construct a self-image that is democratic and international and this pervasive proclivity partially explains motives behind Former President Elbegdorj’s declaration on Mongolia’s permanent neutrality.

In our interpretation, the divisiveness surrounding Mongolia’s permanent SCO membership is derived from a strict technocratic reading of the “Third Neighbour” doctrine that is not designed to frame or guide intricate policy decisions. The debate is emblematic of Mongolia’s fragmented foreign policy-making wherein individual politicians and experts’ desire for greater legitimacy results in actions that are high profile, subjectively low cost, and filled with symbolism. It should be recognised that, as with many similar initiatives in Mongolia, the discourse surrounding the SCO and BRI has coasted away from original narratives to become part of a public discourse geared toward fundamentally pondering Mongolia’s identity and place in the world.

Wider implications

The 18th SCO summit in Qingdao reaffirmed that BRI is a fluid concept that can be used practically in any context. However, the summit also highlighted how different countries perceive the relationship between the BRI and SCO. The final product of the two-day summit, the 17-page Qingdao Declaration listed countries who have supported BRI with a notable exception of India, the organisation’s newest full member:

Reaffirming their support for the Belt and Road Initiative (BRI) of the People’s Republic of China, the Republic of Kazakhstan, the Kyrgyz Republic, the Islamic Republic of Pakistan, the Russian Federation, the Republic of Tajikistan and the Republic of Uzbekistan express appreciation for the joint efforts taken towards its implementation, including efforts to coordinate the development of the Eurasian Economic Union and the BRI and call for using the potential of the regional countries, international organisations and multilateral associations to create a broad, open, mutually beneficial and equal partnership in the SCO space.

At this juncture, Indian Prime Minister Modi objected to BRI on grounds that it does not “respect the sovereignty and territorial integrity of nations,” emphasising India’s opposition to the China-Pakistan Economic Corridor (CPEC). Therefore, for a regional power like India, BRI and not the SCO presents a potential threat. Contrasting the Mongolian public discourse on SCO and BRI is thus a stimulating exercise.

The Third Neighbour doctrine, seen from a narrow foreign policy perspective, is at risk of becoming irrelevant in a new strategic environment where small powers are at the mercy of either Moscow or Beijing since Washington has de facto indicated a decline of interest in Central Asia and Mongolia by extension. So far, Ulaanbaatar has dealt with its security concerns through Democratisation (early- to mid-1990s), Proactive Diplomacy (mid- to late-1990s), and Peacekeeping Commitments (the 21st century). However, the current “Security through Vested Interests” stage, pre-occupied with unilaterally opening the domestic economy to multinational capital predominantly into the mining sector, raises concerns that can undermine other security dimensions. The doctrine’s state-centredness is ill equipped to deal with a world dominated by multinational corporations and private capital flows and where China through its initiatives such as BRI is creatively co-constructing a liberal order with its “market-based networked transactions across a transnational space in Eurasia without necessarily promoting the liberalist values” (Cheng 2016).

Change is on the horizon and the potential dominance of the region by Mongolia’s two neighbours threatens to constrain Ulaanbaatar’s foreign policy options. Mongolia has no other choice than to engage with them creatively and pragmatically. Therefore, it is paramount to remember “that the nation’s perception and pursuit of security was successful up to now only because each of its stages, from geo-political to geo-strategic, were logically consecutive and evolutionary” (Dorjjugder 2009).

Regional structural changes are already in strident motion and unlikely to stall. If Mongolia’s BRI experience is tailored through close civil society engagement and multilateral diplomatic consultation, then it need not be regarded with negative suspicion. The BRI is what China and Mongolia make of it with the caveat that Mongolia is a small cog in a vast machine which must be more efficient than it is perhaps prepared to be. Of equal importance are South-South dialogues and consolidation of initiatives and organisations such as the Third Neighbour Act and International Think Tank for Landlocked Developing Countries (established in Ulaanbaatar by the UN). Mongolia’s neighbourhood strategy of assembling as many neighbours as possible (Bulag 2016) also needs to be seriously considered. In our view, a more multi-level approach is warranted and Mongolia may work to establish meaningful connections with Chinese provinces such as neighbouring Gansu. In any event, it should be hoped that Mongolia’s foreign policy in the age of BRI is proactive, sustainable, development-oriented and more attuned to today’s realities.

About Connor Judge and Sanchir Jargalsaikhan

Guest contribution by Connor Judge and Sanchir Jargalsaikhan. Connor is a PhD Candidate at SOAS, University of London specialising in Chinese history. His research output is supported by the Wolfson Foundation. Sanchir is a political scientist and director at the Sustainable Development Strategy Institute.

[1] Jinghan, Zeng, “Beijing’s limits in telling a good story of One Belt One Road” (BACS paper, Kings College, London, September 14, 2018).

[2] Mongolia engaged with NATO, via the Partnership for Peace Program (PfP) and Organization for Security and Cooperation in Europe (OSCE).

Posted in China, Connor Judge, Foreign Policy, Infrastructure, International Relations, Mongolia and ..., Policy, Russia, Sanchir Jargalsaikhan, SCO | Leave a comment