Wanted to share David Dollar’s article on Mongolian economy in times of financial crisis. He is a US national, the World Bank’s Country Director for China and Mongolia in the East Asia and Pacific Region, based in Beijing.
“Mongolia’s steppes are especially beautiful in October. A light dusting of snow on the gentle rolling hills makes them look like a rumpled white blanket. A large share of Mongolia’s population still lives a nomadic lifestyle, herding livestock from one grazing area to another and living in the traditional ger, Mongolia’s version of the central Asian yurt.
In this beatific landscape, the financial crisis and collapse of global stock markets seem far away — but Mongolia will be sharply affected. In recent years the government has introduced a host of programs that have made herders’ lives less vulnerable and difficult: livestock insurance to protect herders from losses in the terrible freezes that occur every few winters; expansion of cell phone coverage throughout the countryside; and expansion of rural education. The global economic crisis, however, threatens the sustainability of these programs.
Mongolia is in many ways a typical developing country, depending heavily on resource-based exports — in this case, copper and other minerals. The copper price has boomed in recent years, which has helped Mongolia grow faster and expand public programs. Yet the end of the global boom means the end of the commodity boom. Within a short time the copper price has dropped from over $8,000 per metric ton to under $4,000 today.
The classic advice to commodity exporters is to save much of the revenue windfall during the boom times, which Mongolia has done to some extent. The country has accumulated 12 percent of GDP, saving an average of 3 percent of GDP for the past four years. But it has spent more of the windfall — some going to the very good programs noted above. But much of the spending increase has been unfocused, such as raising the government wage bill by 3 percent of GDP and introducing various giveaways to the public, amounting to 4 percent of GDP. Roughly speaking, we can say Mongolia saved about one-third of the windfall and spent the rest.
Now that its revenue is dropping sharply in line with copper prices, Mongolia will have some fiscal problems. This was one of the key topics at an economic policy conference I attended this week in the capital city of Ulaanbaatar. Mongolian President N. Enkhbayar opened the conference, which was also addressed by World Bank chief economist Justin Lin and former Russian Prime Minister Yegor Gaidar.
Much of the discussion among parliamentarians, government, and civil society reflected a sense that the global economic turmoil presents Mongolia with both challenge and opportunity. Gaidar spoke of the current troubles as a “window of opportunity for reform.” During the boom, Mongolia’s decision-makers dithered about reaching agreement with the big international mining firms to develop world-class copper and coal deposits that are as yet untapped. Now, the global environment for mining is much less favorable, so to some extent Mongolia missed an opportunity. But Mongolia can still reach agreements that would be highly favorable to the country once prices rise again — as they inevitably will some day. Cleverly structured contracts can ensure that Mongolia gets a fair share of future windfalls.
Some see this as a good time to enact fiscal rules that require a larger share of future windfalls be saved. That way, the country can have stable expansion of development programs that are insulated from boom-bust commodity cycles. The challenge for Mongolia is to use the country’s mineral wealth in a way that preserves and enriches the country’s unique natural and cultural heritage.”
Yin Yang in Selenge Fields ptomotes rapeseed and alternative fuels
Jeroen Nooter send us a picture of the project he has been working. He has been traveling a couple of times from western european clay towards the Mongolian steppes on vehicles that ran on nothing but vegeatable oil and a smile.
Now he succesfully completed a Crop Circle of his own. With farmer Chuluun he created a Yin Yang by a combination of rapeseed and wheat in his efforts to have people think in different ways about crops and how to manage Mother Earth.
It is always rather pretentious to make fun of other one’s language abilities, especially because i lack in them considerably in myself. But sometimes things are just funny enough to pass them on.
This picture here is the backside of the entrance ticket to a National Park, the Terelj Park in this case. It conveniently gives a list of services provided to visitors in the park. Most interesting is point 3, where it says the park is….
To provide with information, brochure booklets, warning and garbage
When we enlightened our loyal driver on the issue, he ousted one of his high shrieking laughs, opened his window again and shouted at his friend the national park ranger while pointing at the ticket: “It says: We give you garbage!”
Buddhism Today has an article on Buddhism in Viet Nam, that describes its percieved Mongolian invasion:
“At that time, the Mongolian became a super power in the world stage. By then, half of the world already felt into the Mongolian hands: Central Asia, Russia, Hungary, Poland, Yugoslavia, Iran… then China. After dominating China, Mongolian look into Vietnam. Then 30,000 troops of Mongolian cavalry -very well known at that time- crossed the border and attacked Vietnam the first time on January 17, 1258. Emperor TRAN THAI TONG -the one who wanted to be a Buddhist monk - now commanded the Vietnamese army to fight back. It took about 2 weeks, the Mongolian was defeated.
Angry over the defeat, the Mongolian took the revenge. The second invasion was well prepared, began on August 1284, with 200,000 strong troops under the command of a Mongolian prince. This time, the commander of Vietnamese army was Emperor TRAN NHAN TONG, also a devout Buddhist. The second invasion was not luckier than the first time. After 6 months that both sides had engaged into the fierce battles, the Mongolian was defeated and there was only a few thousands survived to back home.
For Mongolian, especially Emperor Koubilai, the defeat was so unbelievable and unbearable. It’s too shameful for the Mongolian empire, therefore, only two months after the defeat, Koubilai giving the order to mobilize all of his best units, ready to take the revenge. On December 25, 1287, 500,000 Mongolian troops under the command of the same Prince, one more time, crossed the border to invade Viet Nam the third time. Again, Emperor TRAN NHAN TONG led the Vietnamese army to fight back and defeat the Mongolian. This time it took for only 4 months. Like last time, there were only few thousands Mongolian survived to comeback. After the third try, the Mongolian quitting the idea to invade Vietnam. Vietnam then began enjoying the peaceful time for about two centuries.”
It is a bit a crappy mobile picture, but those with good eyes might be able to distinguish the North Korean state emblem on this wall of their embassy in Ulaanbaatar (clcik on the image for a larger size). But the interesting thing in this picture is the box below. Yep the airco. Nothing special right. Well, look again. This bright square there is where the branding used to be. But the embassy decided to painting it over. Why? The manufacturer is South Korean LG. Of course they are too proud to have a symbol of South Korean kapitalism on their walls. — technorati: mongolianorth koreacensor
That’s an unexpected number. So what About the US, China, UK? Well they do really well, but if you translate the number of medals to the population of the country, they are nowhere to be seen in the top 10. That is the conclusion that the La Times draws. Their Top 10 of medals per capita is as follows:
No over billion Chinese that can change a thing about that. Reminds that India must be at the very bottom of this list. They might be very proud on their gold, but one medal on a billion is ultimately not al that impressive
On Thursday evening in Mongolia’s capital Ulaanbaatar people went en mass out to the streets to celebrate the first Olympic gold medal in its history. Judoka Tuvshinbayar became first in the category under 100 kilo, beating his rival Askhat Zhitkeyev from Kazakhstan 120 to 10. Mongolia is famous for its wrestling both in its native form as well as in the Japanese Sumo competition which has been dominated by Mongolians in recent years. During the match load cheers were heard all over town from the public screenings of the match. Four tv channels had live broadcasting of the event that marks a highlight in Mongolia’s sports history. The celebrations culminated in a surprising display of unity amongst the stark divided political forces. President Enkhbayar came down the stairs of the Government house holding hands with acting prime minister S. Bayar to his right and Democratic Party (DP) leader Elbegdorj holding his left hand. It was an unimaginable scene bearing in mind the still lingering conflict that sparked the July 1st protests which left 5 people dead. Mining and in particual gold mining was the big theme of the election on June 29. When a victory for the MPRP was announced the DP and other parties sparked a protest with accusations of vote rigging that led to the fatal riots. But while it was the large quantities of gold that divided parties in the election turmoil, a particulary small amount of the commodity was able to unite people from the three key figures on the square to every man in the street. Again army personal had to come rushing to protect the government house from a wild crowd, but this time there were no ill motives. Singer Javkhlan had become the center of the crowd’s euforie and he was mangled from the one side of the square to the other, where on the roof of his car he sang one of is famous songs. People greeted and hi-fived strangers, cars were driving past with passengers holding flags while screaming and yelling of joy. From high government officials to street kids, everyone joint in one of the most overwhelming displays of celebration in Mongolia’s recent history. The Genghis Khan statue was looking motionless over the crowd that celebrated until deep in the night for their new national hero.
