How Mining Helps Us
Mongolia’s long-term economic prospects are closely tied to its mining sector. Policymakers in Ulaanbaatar must adopt sensible policies for the country’s mining sector. If they do, the beneficial effects will be felt throughout the country and across every economic sector, from manufacturing to services. The policies lawmakers adopt will determine whether this chance becomes a reality for the entire country or for only a few.
Given our nation’s abundant natural resources, mining is Mongolia’s best chance to enter the global trade path. Doing so will create opportunity and prosperity for the entire population.
While neither of us works in the mining sector, both of us have seen our local areas impacted by mining. Mongolia’s mining sector is not performing as well as it could. It badly lags international standards. As a result, many Mongolians are denied the shared prosperity that a growing mining sector could bring.
The problem begins with our nation’s investment climate. As presently constructed it is weak and insecure. It desperately needs to be strengthened and modernized. Members of parliament must look to take steps that encourage investment, job creation, and prosperity. These policies bolster the mining sector, and would also help meet the challenges of small and medium sized businesses such as ours.
For example, any set of policies should seek to attract the very best domestic and international companies to come work here. Mongolians should insist that only firms with the highest and best world standards for the environment and labor are encouraged to grows roots here and help our economy grow.
While some might object that Mongolia’s mining sector should only be open to Mongolian mining companies, we think that’s misguided. Here’s how lawmakers should think of the task before them: the economic policies that Mongolia adopts over the coming months will mirror the investors and companies that are attracted to Mongolia. Strong policies will attract good investors and companies with the best standards. On the other hand, weak policies will attract the worst investors and companies with the poorest standards.
Our government must make sure that the benefits of a thriving sector trickle down to all Mongolians. This can be done if the government reserves a portion of the mining revenues to develop and expand Mongolia’s infrastructure, including roads, schools, and hospitals across the country. In this way, our national government will be investing in the local economies scattered throughout the nation, thus ensuring all of the people prosper.
Some lawmakers in the capital prefer state ownership of resources or mining deposits. But this is short-sighted. Such measures ensure that the mining sector will be smaller and less efficient than it otherwise would be. As a result, such policies take money away from important government programs and activities thereby undermining investor confidence and the future of Mongolia.
Our neighbors in the broader economic region have demonstrated the strong economic growth that is a result from embracing smart government policies. This includes welcoming trade, importing skills and experience from across the globe, and protecting property rights to preserve the necessary incentives that help economies grow. Countries such as Korea and now China are evidence of the sustained growth that can benefit all when forward-looking laws and norms are adopted for a country’s economy. Now it’s Mongolia’s turn.
We have waited far too long for our mining sector to grow and serve the needs of Mongolia’s economy. Every day that Mongolia does not move toward resolving these outstanding issues is another day of opportunity and prosperity denied for the people.