Violence from the Past

In 2008, after the elections for the Great Hural, there were days of violent protests in Mongolia. The ruling party, the MPRP, won the majority and observers of the election said it was fair and free, but nonetheless citizens came out in droves to protest, claiming that the election was rigged. When the police pushed back, the protests become violent. Protesters looted stores, burned cars, and even set fire the MPRP headquarters. A state of emergency was declared, and it took about a week for the protests to die down. According to BBC News, at least 5 people were killed and "scores of injuries were reported."

Interestingly enough, the next year was the year that power was transfered from the MPRP to the Democratic Party. It makes me wonder if perhaps the elections had been rigged the year before, or if enough people become angry that the MPRP was still in power and more people came out to vote.

Protests In the Capital

In a surprising act against the government, around 200 Mongolian herders, along with environmental activists, rode into the capital of Mongolia to protest the mining deals, according to CBS news. The protesters were against the deals, saying that government was working only to please the mining firms and not protect its people. Increased mining in Mongolia has been destroying pastures. These pastures, before industrialization, were already being degraded. After Mongolia made a quick switch to Democracy, they tried to "shock therapy" their way out of Communism, resulting in massive debt, loss of jobs, and depression. During the communist days, farming was managed strictly by the government, and the lands remained usable. After the switch to private ownership thought, capitalism took its toll as the lands became overgrazed and unusable. In fact 2/3 of the pastures have been degraded since the privatization of farming.

These herders, who are among the poorest population in the country, were already on a downward spiral, then add mining destroying more of their land and protests were bound to happen. The sad thing is though, on the day of the protest the herders said they would camp out in the capital until they were heard, but since that day, not a single news story has been published, that I could find, saying what happened to these people. And, all of the articles on the day of the protest were horrifically short; two paragraphs at most for each one. So where are these herders? Are they still camped out in the capital? Were they forced to go home? Did the government hear their demands? Who knows?

Poverty

The percentage of people living below the poverty line in Mongolia is 36.1% compared to its surrounding countries, which range from 8-16%, (index mundi.com). Perhaps the most alarming fact about this statistic, is that it has remained the same since 1998! That means for the past 13 years, Mongolia has made no progress in bringing its people out of poverty, even with a department of the government made specifically to tackle the problem.

One of the main problems is the lack of jobs. 11% of the population is unemployed, and those who are employed aren't much better off. While the country is trying to make jobs in the private sector, the private sector jobs have the highest poverty rate. According to the Mongolian Poverty Strategy Paper, 35% of the people working in the private sector are below the poverty line. Even the public sector jobs aren't that prosperous, with 26% of the people working in public sectors jobs living under the poverty line. The most telling statistic, is the mere 1% of government workers living in poverty. Understandably, if you want to work in the government you have to be educated, but if the only jobs that almost guarantee a good living are in the government, then what about the rest of the country. There should be greater steps taken to help the workers in the private and public sector, who have a pretty high chance of being poor. A country may need people to run it, but without a general population who farm, work in the mines, run the shops, herd the sheep, and push the paper, you wouldn't have a country at all.

It seems almost silly for me to think that the people who are running the show live the best off, while the people who run themselves ragged making the country actually run, not just make the policies but do the actual hard labor, are the ones left to suffer and live in poverty. And to top it all off, Mongolia has made a special section of the government, who of course do not live in poverty, to deal with the problem of poverty in the country, and the poverty level has remained the same for 13 years! It makes me wonder what Mongolia is really doing to try to relieve the problem. This is definitely an area I would like to see massive improvement in for the country.

Nuclear Waste Dump?

According to NationalJournal.com, the United States and Mongolia have entered into talks about Mongolia having international nuclear waste dump site in the country. This would benefit the United States because it sells nuclear supplies, like Uranium, to South Korea and Taiwan. Because South Korea and Taiwan are so small, they don't have many places to dump their waste, putting a damper on their nuclear programs. But if they were able to dump in Mongolia, then they could use more nuclear power, i.e. the U.S. would make more money

But, how would Mongolia benefit? It could increase international relations with other countries in the area, carve a spot for itself in the region (since it is right between Russia and China), and

develop better relations with the U.S. and other western powers. Sounds lovely right?

Unless, of course, you remember that what they would be dumping into Mongolia is nuclear waste! I think everyone has seen enough about Japan since their last major earthquake to know

that nuclear energy can be a very dangerous thing. When it seeps into the ground it poisons water, which we drink, and then the water poisons the food, which we eat. While Mongolia is not as prone to earthquakes as Japan, it is still at risk for major earthquakes, being close to fault lines, according to US Geological Survey. Nuclear power in general seems a lot more dangerous than its worth, but to stick all the waste in the region in one country that is prone to earthquakes, if not severely then moderately, seems downright foolish.

6 Shortlisted in Tavan Tolgoi Deal

EPA

Mongolia has shortlisted 6 companies to develop a part of the Tavan Tolgoi coal field, according to an article from Bloomberg News. As I said before, the deal is for the company, or companies, selected to develop a part of the field in an effort to sell off some of the assets of state-owned companies to the private sector. This particular coal field has "more than 1 billion metric tons of coal, 68 percent of which can be used for steelmaking and the rest as fuel in power plants," according to the news article. Tavan Tolgoi is one of the 10 largest deposits of coal in the world. To check out their website, click Tavan Tolgoi.

Between one and three companies will be chosen to mine the section of the coal field, but Mongolia hopes that the company chosen will help build roads, railways, and other infrastructure around Tavan Tolgoi, so that the coal fields and the area surrounding the fields can be developed further.

The 6 companies on the list so far are:

ArcelorMittal (MT) - has operations in the United States but is based out of Luxembourg

Vale SA (VALE5) - is based out of Brazil and has no ties to the US whatsoever.

Peabody Energy Corp (BTU) - is the largest privately owned coal company in the world and is based out of Missouri.

Xstrata Plc (XTA) - is based out of Switzerland and has operations in the United States.

Mitsui & Co. and China's Shenhua Group - These two companies would be going in to the venture together. Mitsui & Co. is based out of Japan and Shenhua Group is state-owned by China. Neither of the companies have operations in the United States, however, Shenhua Group is the largest coal company in the world, surpassing Peabody.

OAO Russian Railways - this company would head up the Russia-Japan-Korea consortium going for the deal.

I added in each company's ties to the U.S. to show what stakes the United States has in this deal. Mongolia is planning to export the coal, but not to the United States. Rather, they would export to China, Japan, and South Korea. The U.S., it seems, will not benefit by getting another country to deal with in coal. Even though some of the companies shortlisted have operations in the U.S., that doesn't mean the U.S. will profit from those companies getting a deal with Mongolia. Rather, the only chance we have from benefiting from this deal is if Peabody Energy Corp. were to get a stake in the deal, since the company is based in the U.S.

Something I found interesting in looking at each of the companies websites was that only

Peabody Energy Corp made any mention of being shortlisted for the Mongolian development. I figure this could mean that they don't want to announce anything until the deals are finalized, however, I did find it a bit strange.

Aside from U.S. involvement. These dealings are huge for Mongolia. Selling off part of the coal field could boost the countries economy and draw more foreign investors to put their faith in Mongolia. Something important to note, however, is that Mongolia is not selling off the entire field. The state run Erdenes MGL LLC will still have part of the field, and the company will still be state owned. So while this is a big push for Mongolia privatizing its companies, it is not anywhere near the whole shove.

Economic Forum

At the economic forum held in the Mongolia's capital yesterday, much was discussed about the country now turning into a major player in the world in the supplying of natural resources. Mongolia has a wealth of resources that are critical to the world "ranging from massive oil, coal and iron ore deposits to the world's largest copper, rare earths and uranium reserves." With all the opportunity that Mongolia has to step out and become a wealthy and important international player, they do have worries that their wealth of resources could become a curse to the country. The forum was meant to deal with these issues and how the country should move forward and deal with its new standing in the international arena. The main question is, will this new found source of wealth be a success for the country, or is the country simply not ready to handle it.

I think that , yes, Mongolia is nearly ready to step into the national arena. Mongolia is new democracy, still shaking off its ties with communism. However, I think the recent election is a

clear sign that Mongolia is making progress. The MPRP, the political power created from

communism, suffered a defeat in the last election, allowing for another party to take control of the presidency. For a country that has lasted so long under the control of one party, this is a sign that things are changing in Mongolia. I think in order to prove to the world that their country is good investment, however, Mongolia will need to make improvements in its poor scoring on the corruption scales.

If Mongolia can prove that it's government structure is sound, and that they have the infrastructure in place to handle such a huge leap into the global market. If Mongolia can prove that, which from what I have seen it looks like they are on the fast track to doing, this could

mean good things for the United States as well. I need to research US - Mongolian relations more, but from what I have seen Mongolia and the US have been on good terms since Mongolia's switch away from communism and its diving into Democracy. On Mongolian National Day

in 2010, President Obama had this to say of Mongolia:"Over the past two decades since your

country’s remarkable democratic transition, Americans and Mongolians have expanded their cooperation and understanding in many areas, including trade, education, culture, international security, and the environment. Through our close cooperation, our respect for each other has grown, as has our friendship." While it is likely that pleasantries are common as a show of respect between countries, I believe that the United States does, and if not should, realize the potential that Mongolia has in becoming a major exporter of vital goods. TheUnited States depends hugely on oil, and it would definitely not hurt us to invest in a democracy, that we have good relations with.

In order for all this to come together, for Mongolia to step into the arena of the world as a major exporting power, and for the United States to benefit from this change, Mongolia needs to step up its game, crack down on corruption, and prove to the world that it has once and for all dropped its ties from the past.

To read the news article about the Economic Forum on UB Post click HERE.

To read the press release about Mongolian National Day click HERE.

To see the official Mongolian - US Embassy page click HERE.

Freedom House and Corruption

According to freedomhouse.org, Mongolia is 1 of only 5 of the 26 communist and post-communist states considered to be "Free", according to the organization's standards. 7 of the others are "Partly Free" and 14 are considered "Not Free." Freedom House rates countries on a scale of 1 to 7, with 1 being free and 7 being not free. Mongolia scored both a 2 in the political rights and civil liberties scales. The reason for an increase in ranking (the country was still free but had a lower score in previous years) was due to the successful transfer of power from one president to another.

In 2008, after the MPRP won the majority in parliament, there followed a series of riots against the MPRP headquarters. According to some reports, those arrested in relation to the riots were abused by the police and coerced violently into confessions. All the unrest and uncertainty of the fairness of the elections caused the country's ratings to remain lower, although it was still classified as free. In 2009, however, when the candidate from the Democratic Party, Tsakhiagiin Elbegdorj, won the presidency, the incumbent MPRP president quickly stepped down to avoid any further unrest among the people. International observers agreed that the election was "free and fair." This successful transfer of power, and the fact that the new president was the first to be from a party other than the MPRP, was enough to raise the ratings on Freedom House.

Another reason why the Mongolia is considered free but only scores a 2 instead of a 1, like the

United states which rates a 1 one civil liberty and political freedom, is because of the amount of corruption, not only within government but within households as well. One survey found that 1 in 5 Mongolian households had paid bribes, though the specifics on the survey are not made clear. Corruption is such a big problem, that Mongolia created an agency called the Independent Authority Against Corruption (IAAC).

I think having an agency like the IAAC in Mongolia is a huge step away from the old regime and into the new. With such a high amount of corruption, other countries will have no desire to invest in Mongolia, which will severely hurt their economy. If the country can work to reduce the amount of corruption, then companies will have more faith in the economy and be more likely to invest. This is a huge point considering Mongolia is trying to sell of some of its state owned companies to the private sector. With all the natural resources in Mongolia, it is extremely important that they cash in foreign investment in their companies, or else the people will continue to be steeped in poverty.

I see the elections of 2009 as a huge turning point for Mongolia. Since the collapse of the communist regime, the communist founded MPRP has held the presidency and most often the majority in parliament. A member of the Democratic Party being elected helps show that the MPRP does not hold a monopoly on the government any more and that the country is moving toward more competitive politics. The election being declared as "free and fair" by outside sources shows me that while corruption is still a problem, it has at least declined some in the political arena. If the country wants to have success in selling off its state owned companies and bringing more investors to Mongolia, it will need to prove even further that it has cracked down on corruption.

To look at the Freedom House report on Mongolia click HERE.

The IAAC's website says it it available in English, but only the link are in English and not the actual text, but if you want to look at it anyway click HERE and click the English link in the upper corner.

Too see how Mongolia's corruption level compare to surrounding countries in the Asia Pacific area click HERE.