Mining Governance in Mongolia: A Messy Field

This is a brief, possibly too simple title of my field research in Mongolia.  The mining governance is an interesting subject for anyone studying Mongolian politics because it links Mongolia with the world, triggers rent-seeking competition among politicians, and upsets the local community, who are affected by irresponsible mining activities.  But, the interesting question for a political science grad student is how to simplify this messy field in order to understand the politics, as Harold Lasswell puts it, “who gets what, when, and how” in Mongolia.  With this ‘mining governance’ series, I would like to share my reflections of the mining governance in Mongolia – a small (not from territorial or historical perspectives) and landlocked democracy.

A few concepts need to be clarified because there are many definitions for different purposes as well as perspectives.  For the purpose of this blog series, ‘mining governance’ means a governing process, which includes decision-making and implementing, concerning the usage of the mineral resource.  The ‘institution’ is defined as a rule, but institutionalization means to create structures and to provide resources (e.g., political will, human and material resources) to enforce the rule.  The institution has two faces – formal (codified ones) as well as informal (non-codified ones).

So, how we can examine the mining governance of Mongolia? Here are three caveats that should be highlighted before discussing the present mining governance.

Firstly, the mining governance is not entirely new to Mongolia. Since 1911, Mongolian political elites have been longing to use its mineral resources while foreigners were also exploring mining opportunities in Mongolia.  The governance could be divided roughly into three periods: pre-1960s, 1960s-80s, and post-1990.  Despite substantial differences, each period has experienced the challenges of landlockedness, dealing with Great Powers, and influential transnational players.

Secondly, the Soviet-style mining governance still has a strong influence on the current mining governance.  Its institutional structure serves as a foundation for all aspects of mining, ranging from ministries to schools and to operations.  People from the Soviet-style mining period still dominate most senior and mid-level management posts in politics, bureaucracy, and industry.  Furthermore, the majority of the public view the mining through Soviet-style mining lenses because all operational mines were built and run by Soviet-style.

Thirdly, Mongolia, like many other small, democratic, developing, and resource-based economies, face three major factors: the dynamics of the commodity market, the geopolitics of Great Powers, and the results of domestic elections.  All these factors are beyond the control of foreign investors, state officials, and the public.

With these factors (i.e., landlockedness, geopolitics, commodity markets, domestic elections, and legacy of the Soviet mining) in mind, I would like to identify the key actors – WHO are fighting over the mining rents (WHAT) and trying to change the institutions (HOW).

External actors are the transnational (multinational) corporations trying to extract natural resources, following the simple business principle ‘the maximum benefit at minimum cost’.  However, they are powerful players with support from their respective governments, international financial institutions, and investors.  Then, there are the opportunity seekers – who are mostly junior companies and mining/mining supply entrepreuners.

Domestic actors are the most-complicated to categorize.  However, they could be divided into three major groups.  One is the political/bureaucratic actors, including those affilliated to political parties and state bureaucracies. The second group is the business community, those who are engaged in mining-related business activities.  The last group is the public, or civil society; this includes people who are directly-affected by the mining activities and those unaffected by the mining.

Even though all these actors involved in the mining governance process (i.e., the decision-making and implementing process of using mining resources), the political and bureaucratic actors have the political power to set the rule (institution) and to enforce (to institutionalize) the rule.  If all other actors are fighting to get the ‘rents’ of mining, the political and bureaucratic actors are given the mandate to regulate this competition in fair, transparent, and sustainable ways.  This generates trust among all actors and reduces the uncertainty.  But, if political and bureaucratic actors themselves engage in the rentseeking game, it creates a messy field for all.  Therefore, ‘WHEN’ becomes the most important factor for these actors to change the rule and to disrupt the institutionalization process.

This framework will be used in the next blog posts – to examine Mongolian mining governance from a political perspective – to grasp the dynamics of power politics.



About mendee

Jargalsaikhan Mendee is a Deputy Director of the Institute for Defense Studies of Mongolia. He holds a PhD in Political Science from the University of British Columbia, and MAs in International Relations from the US Naval Postgraduate School and in Asia-Pacific Policy Studies from the Institute of Asian Research of the University of British Columbia.
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