Tag Archives: mongolia

Oil price drop, the potential impact on Republic of Congo and implications for Mongolia

Harry Li, MAAPPS // Feb 8, 2015

In 2014, Republic of Congo received $10.7 billion revenue from petroleum alone, equivalent to 74% of its total GDP. Petroleum export is the biggest resource export of the country, accounting for over 90% of all exports. With such heavy reliance on petro, the global oil price drop recently would potentially play a destructive force toward the national development of ROC.

Currently, ROC has $4.225 billion of growth external debt. Amadou Sy, the director of Africa Growth Initiative, argues that it will be more difficult to service debt as their oil revenues fall and the depreciation of their currencies makes U.S. dollar denominated debt more expensive.

According to the Financial Times, South Sudan is receiving the lowest oil price in the world at $20-$25 a barrel because of the combination of falling prices and unfavorable pipeline contracts. ROC’s government could face similar unpopularity. ROC’s government is currently running as an authoritarian regime controlling nation’s resources, suppressing the activeness of civil societies, such as Observatoire congolais des droits de l’Homme(OCDH). OCDH is the biggest Human Rights group in ROC and it constantly criticizes the government. However, ROC’s decreasing ranking in the Democracy Index, Human Development Index, Corruption Percentage Index and Economic Freedom Index would make its petroleum market less attractive for international investors, since more options are available. All of the impact above would result in national-budget cutting, thus negatively impacting the domestic economy.

In the aspect of export resources, Mongolia is similar to ROC. Although Mongolia is not oil major exporter, but mining export accounts for a large percentage of national’s GDP. Thus the price-drop scenario would apply if prices of coal, copper and gold (Mongolia’s top 3 major resource exports) drop significantly. Resource-export oriented countries like Mongolia is fragile to the fluctuation of global prices. That is why it is very important to find effective ways for sub-national reporting and engage civil society in the policy-making on the mining industries in Mongolia. If appropriate policies on mining are implemented, not only will Mongolia be better protected when the prices of coal, copper and gold suddenly decreases but also increase popularity among global investors.

Reference

Sy,Amadou. “Falling oil prices and the consequences for sub-haharan Africa.” The Brooking Institute, Dec.23, 2014.http://www.brookings.edu/blogs/africa-in-focus/posts/2014/12/23-oil-prices-exports-africa-sy

 

One of the pillars is EITI

Bulgan Batdorj, MASc Mining Engineering // Jan 27, 2015

I am Mongolian. This may seem like a simple statement. However this simple sentence makes me the owner of a great history, beautiful land, unique tradition and culture. It also means that speaking up and critiquing is part of our culture and is to be encouraged and celebrated rather than resented. Being Mongolian is a privilege and a source of prestige. But in order to maintain and protect that privilege and prestige I have to take responsibility. This is why I am excited to be taking part in the EITI Mongolia project at the University of British Columbia.

As many people know Mongolia is rich in mineral resources and since the transition to a democratic regime, Mongolia has begin fighting to build good governance and develop immunity in the face of a rush of money, and the prospect of misuse and abuse.Mongolia is an EITI compliant country that has achieved a lot of progress since its affiliation with the Initiative in 2006. The EITI Mongolia project at UBC this term will focus on what the new EITI initiative on local reporting would mean for Mongolia and potentially to other EITI compliant countries. This is of great importance because it provides insights and more specifically a toolbox enabling the community and local civil society to push for government accountability to better their lives.

The Mongolian ger(yurt)has two pillars (багана)to stay tall and strong.Extractive industry needs the EITI as one pillar, but without good governance of the industry as the second pillar, there will be no strong nor beautiful white ger under the eternal blue sky.

Extracting Transparency in Mongolia and Beyond

Justin Kwan, MAAPPS // Jan 26, 2015

Asia’s rise in the 21st century has been commonly characterized by the dominance of the region’s major powers such as China, Japan, South Korea and India. Far too often overlooked however is the important presence of Mongolia. Situated between both Russia to the north and China to the south, Mongolia has been overshadowed by two of its neighbouring superpowers. While Mongolia may go unnoticed to many countries across the world, China recognizes Mongolia’s strategic importance for its natural resources, primarily copper, coal, gold and uranium.

As an aspiring China scholar, the Middle Kingdom’s interest in Mongolian natural resources also sparked my curiosity for the country, its growing importance to the Asia Pacific Region and my participation here in this year’s policy project.  Roland Nash of Renaissance Capital described Mongolia as “a blue-sky opportunity” and as “a country on the point of transformation” (Business New Europe, 2009). His assertion six years ago has been extremely forth telling of the economic development that has been occurring.

This year’s policy project continues with the work produced by last year’s cohort who examined the policy mechanisms for discouraging corruption and improving human development in Mongolia. As part of our investigation, our research this year will look at EITI’s important move to push transparency reporting down from the national to the local level. My initial thoughts immediately gravitate towards a series of questions: Who within EITI is encouraging the reporting to be pushed down to the local level? What are the motivations behind this? In what ways will this benefit and/or complicate the way reporting is completed?

To answer these questions, one important aspect that must be investigated is how actors both at the domestic and national levels impact the policy making process. EITI is a coalition of governments, companies and civil society groups – all who play important roles in shaping the organization. As our research continues, I am particularly interested in investigating how these actors engage with each other to formulate policy as well as the regional variations between how EITI member countries implement them.

I hope from this experience to future my knowledge not only in the field of policy work and transparency initiatives but also to expand my knowledge of the Asia Pacific Region. My current research looks at EITI Compliant Country Indonesia in order to create a comparative framework which will allow us to assess how different member countries are adapting to local level reporting. While much work lies ahead of us, I am most definitely excited for the journey to come.