MONGOLIA, MINING, AND MALFEASANCE

I RECENTLY RETURNED FROM A TRIP TO MONGOLIA AND MYANMAR.

THE LINKING OF THESE COUNTRIES ON THE SAME ITINERARY WAS ACCIDENTAL, THOUGH THEY BOTH ACTUALLY HAVE A LOT IN COMMON: THEY BORDER CHINA AND MUCH OF THEIR RECENT FOREIGN POLICY HAS BEEN DRIVEN BY A DESIRE TO GET OUT FROM UNDER CHINESE DOMINATION.

It’s not fun to live with a neighbor like that. I’ll talk about Myanmar in a separate post and for now say something about Mongolia.

I visited Mongolia with my colleagues Larry Diamond and Steve Krasner from Stanford’s Center on Democracy, Development, and the Rule of Law (CCDRL), at the invitation of President Elbegdorj. 

The connection to CDDRL came about as a result of Mongolia’s position as chair this year of the Community of Democracies; the next meeting of the Community will be in Ulaan Baator in April of 2013. We spent a week teaching a condensed version of the CDDRL Draper-Hills Summer Fellows program to a group of young Mongolians under the auspices of the Mongolian Institute for Strategic Studies and its director, Damba Ganbat.

Mongolia is a country more than twice the size of Texas with a population of only 2.8 million people. In recent years it has been the fastest growing economy in the world, registering over 17 percent growth in 2011. All of this has been driven by mining: Mongolia has just about everything the world (and in particular, its neighbor China) needs, including coal, copper, uranium, gold, rare earths, and the like. It has recently started a wind energy project and hopes to export electricity to Japan. 

Much of its natural resource wealth has come from a long-standing Russian-Mongolian joint venture, Erdenet, but has recently been joined by two giant newcomers, the Oyu Tolgoi (OT) and Tavan Tolgoi (TT) mines in the Gobi desert that serve the Chinese market. This wealth is pouring into a country in which 30-40 percent of the population remain nomadic herders living off flocks of horses, sheep and goats amid winter temperatures that can reach -30 degrees Celsius. Mongolia’s current GDP per capita in PPP terms remains less than $5000, which masks increasing skew in distribution. (All figures courtesy of the terrific new World Bank dataBank resource).

All of this new mineral wealth poses a huge problem of corruption and other ills associated with the resource curse. Of all former Communist states, Mongolia has been by far the most successful as a democracy outside of European countries like the Baltic states, Poland, or the Czech Republic; unlike the Central Asian -stans it has maintained a competitive multiparty electoral democracy since the Russian withdrawal in the early 1990s. These institutions are being sorely tested, however, by the challenge of dealing with resource wealth.

We walked directly into a controversy surrounding the arrest and conviction of former President Enkhbayar on corruption charges. Enkhbayar and his supporters in the Mongolian People’s Revolutionary Party (MPRP) have charged that this was a completely political trial designed to remove the former president from the political scene before the legislative elections that took place earlier this year, and that led to Elbegdorj’s Democratic Party emerging as the largest bloc in the parliament. Under the constitution the President appoints the judiciary, and Enkhbayar’s supporters claim that the prosecutor general was the current president’s campaign manager. Enkhbayar has gotten a tremendous amount of favorable publicity in the foreign press, with articles in the Economist, Forbes, and Wall Street Journal suggesting that he has been unjustly prosecuted and that the rule of law is under serious threat in Mongolia.

Having talked to many people from the different parties in the week we were in Ulaan Baator, there seemed to be general agreement on several things. First, the former president was guilty of very serious corruption while in office; indeed, part of the problem with the prosecution was that the actual charges brought against him were fairly trivial and didn’t reflect the gravity of his crimes. Many people said that it was a good thing that so powerful an individual could be convicted. And second, the prosecution did seem to be politically motivated in its timing just before the election. There was also controversy about the manner in which Enkhbayar was arrested, with several hundred policemen surrounding his house and using what some regarded as excessive force.

I’m in no position to judge the degree to which the Mongolian judiciary has been politicized. It is important for the government to prosecute not just a single former president, but other officials from other parties guilty of corruption as well, including the current ruling party. However, it is important to put this issue in context. Since South Korea’s democratic transition, Korean presidents have launched politicized investigations of rivals on corruption charges. It’s a terrible practice to get into, but it also doesn’t mean that Korean democracy is failing or non-existent. So too in the case of Mongolia: judicial independence is something that needs to be built over time; if the system needs work, this should not detract from the country’s nonetheless impressive record of democratic institution-building over the past 20 years. It was for this reason that Hillary Clinton recently visited Mongolia (and used it as a platform for criticizing China’s rights record). The resource curse will put tremendous strain on Mongolian democracy in the coming years. The country needs support from outside powers and particularly from the United States, which is in a position to help balance the pressures coming from the country’s two large authoritarian neighbors, Russia and China.

SOURCE : THE AMERICAN INTEREST

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