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.
