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Monday, October 15, 2012

How is Strategic Investment Agreement Done?

 How is Strategic Investment Agreement Done?

A strategic investment is a transaction that is closely related to joint ventures. In strategic investments, one company makes an investment in another. These two companies enter into agreements that are designed to serve shared business goals.

Strategic investments involve a wide variety of transactions. The planners of such transactions decide on a strategic investment when they believe that the investment is not merely directed towards financial goals, but also broader business orstrategic goals. The actual details of such business agreements vary from deal to deal.
A strategic investment differs from an investment by a venture capitalist in that the latter’s aim is to generate a huge return on investment. Corporate venturing, which refers to a large firm investing in smaller form, is an example of strategicinvesting.

How is Strategic Investment Done?

Strategic investment begins with identifying and evaluating various projects and making a selection that is likely to boost the company’s competitive advantage.
In a strategic investment, the investor generally acquires common or preferred stocks in the target company. A loan may also be taken for acquiring the debt securities of the target company. Moreover, the two companies may enter into supply and sourcing contracts, technology sharing agreements or research and development agreements. They may also form separate joint venture entities for engaging in specified businesses.
A strategic investment typically influences what a company does (what products / services it offers), where it does it (the locations of its operations) and/or how it does it (processes and practices).

Benefits of Strategic Investment

Strategic investment gives the investing company access to resources at a fairly low cost. For instance, when the targetedcompany’s business is to develop technology, which the investing company find useful, the latter can make a strategic investment in the former company instead of developing its own technology. This will reduce the cost of developing that technology to agreat extent.

Risks of Strategic Investment

The process of identifying and evaluating various strategic investment options could be significantly complex, time consuming and expensive.

Friday, October 12, 2012

Mongolia—2012 Consultation Preliminary Conclusions of the IMF Mission


Mongolia—2012  Consultation Preliminary Conclusions of the IMF Mission


Oct 25, 2012
 
Mongolia continues to be one of the fastest growing economies in the world owing to the FDI-financed development of the mining sector. The impressive growth performance is rapidly improving living standards and poverty declined significantly in 2011. Moreover, the economy’s prospects are promising as copper and coal production are set to expand considerably over the next 5 years. However, challenges are posed by (i) the procyclicality of economic policies, leading to overheating and increasing Mongolia’s vulnerability to macroeconomic instability; (ii) the uncertain external outlook, which is exemplified by the recent weakening of coal exports; and (iii) the critical importance of implementing the fiscal framework put in place in recent years. This statement discusses these challenges in the context of the government’s Action Plan for 2012-2016.






I. Recent Economic Developments and Outlook
1. The Mongolian economy continues to grow very rapidly. Growth accelerated to 17 percent in 2011 and remained in low double-digits through the second quarter of 2012. Growth was buoyed by expanding coal and copper production, the ongoing development of new large mining projects, a relatively mild winter boosting agriculture, and highly expansionary fiscal policy.

2. However, inflation remains high and pressures on the balance of payments (BOP) are increasing. Unlike in other Asian countries where inflation has decelerated owing to moderating demand and lower energy and food prices, inflation in Mongolia is still around 15 percent, primarily due to rapidly rising government spending. Domestic demand pressures are driving up imports of consumption goods, and the resulting BOP pressures are compounded by weakening FDI inflows, decelerating export growth owing to weakening coal export prices, rising oil import prices and stagnating copper export volumes. In recent months, coal export volumes to China have slumped amid China’s overall decelerating imports.

3. Monetary policy has been tightened. Over the past year, in response to inflation rising substantially above the official target, the central bank increased its policy rate—by 225 basis points, to 13.25 percent—and the reserve requirements—by 700 basis points, to 12 percent. These tightening measures, which coincided with a deceleration of deposit inflows into the banking system, have been associated with a considerable slowdown in credit growth, from 72 percent in 2011 to 37 percent (year on year) in August 2012.

4. But fiscal policy has remained excessively expansionary.
  • Government spending continued to soar during the first half of 2012. In the six months leading up to the end-June elections, government spending rose by 57 percent (year on year) as civil servants’ wages were raised by more than 50 percent, cash handouts were stepped up, and capital expenditures were brought forward. As revenue collection fell short of the ambitious targets, a large domestic financing need arose which was met mostly by drawing down bank deposits and by borrowing about 200 billion togrogs from the BOM.
  • The fiscal balance worsened by 4.7 percentage points of GDP in 2011, to a deficit of 3.5 percent of GDP. Revenue surged, thanks to VAT and customs duties collected on imports of capital goods for mining sector development. But this was more than offset by a 61 percent increase in government spending.
5. BOP pressures have mostly been reflected in a decline in Mongolia’s Net International Reserves (NIR). The Bank of Mongolia (BOM) is intervening intermittently to limit the depreciation of the togrog. Since end-October 2011, the togrog/U.S. dollar exchange rate has depreciated by 7 percent and most of the BOP pressures have been absorbed by a decline in the BOM’s NIR which have fallen by more than a third (US$0.8 billion) to a 2-year low of US$1.4 billion. The effect of the BOP pressures on the BOM’s headline gross international reserves (GIR) is obscured by BOM borrowing from the Chinese central bank (US$0.2 billion), and the BOM’s deposit taking in foreign currency from the Development Bank of Mongolia (US$0.5 billion) and commercial banks (US$0.2 billion). As a result, GIR remains near an all-time high of US$2.7 billion (5.4 months of prospective non-mining imports of goods and service).

6. The near-term outlook for growth is favorable but inflation is projected to remain elevated:
  • The mission projects inflation to remain in double digits throughout 2013. Meat prices, which have a heavy weight in Mongolia’s CPI basket, are projected to moderate in the coming months. However, in the context of continued strong growth of domestic demand, the depreciation of the exchange rate and rising oil import prices are expected to prevent a rapid decline in inflation.
  • Notwithstanding a deceleration from last year, growth is projected to remain in double digits in 2012. Rising coal production is expected to boost mineral GDP by 6.8 percent. Non-mineral GDP growth is projected at 12.8 percent, thanks to the ongoing construction and development of the OT and TT mines alongside expansionary fiscal policy.
  • Growth is projected to accelerate in 2013. Mining GDP is set to increase by over half as the massive Oyu Tolgoi (OT) copper mining project starts to produce and coal production from the Tavan Tolgoi (TT) mine expands further. Non-mining GDP growth is projected at 5.4 percent in 2013, supported by government capital spending initiated in 2012 and disbursements by the Development Bank of Mongolia (DBM) for investments in roads, housing, and railways in late-2012.
7. The external position is projected to remain under pressure in 2013 and downside risks are considerable, calling for vigilance by policymakers. Mongolia’s coal export capacity will expand further in 2013. And the start of operations at the OT mine should boost copper exports. However, imports will also rise, owing to the DBM-initiated investment projects, and the net positive effect on the balance of payments of the start of OT operations will be relatively limited in 2013 as the bulk of the gross export proceeds will be used for repayment of investment costs. The sudden decline in coal exports in July and August and the WTO’s recent downward revision of growth projections for world trade underscore that the outlook for exports is highly uncertain.
 
8. Mongolia’s medium-term prospects are promising. The ramp up of coal production from the TT mine, the start of copper production at the OT open pit mine and the development of the OT underground mine are projected to keep the growth of mineral GDP at over 20 percent per annum, on average, during 2013-17. Activity outside the mining sector is also projected to remain buoyant, although this would need to be supported by continued reforms to strengthen the foundation of the economy and the business climate.

9. However, a number of challenges need to be addressed as the new government embarks on its Action Plan for 2012-16. Importantly, policies need to be set against the continued uncertainties in the global economic outlook. Growth in Asia has slowed, reflecting external headwinds as well as weaker momentum in China and India. The near-term outlook offers only a very gradual pickup in activity amid considerable downside risks, in particular with regard to the euro-area crisis. Potential spillovers are significant, affecting export volumes, commodity prices, and FDI inflows.
10. Against this background, it is particularly important to adopt policies that ensure macroeconomic and financial stability and that harness the country’s long-term growth potential. In particular:
  • The laws that have been enacted in recent years to strengthen the fiscal policy framework—the Fiscal Stability Law (FSL), the Integrated Budget Law (IBL), and the Social Welfare Law (SWL)—now need to be implemented to ensure that Mongolia’s resource wealth not only sustains the pace of economic development, but ensures that this economic development results in a generalized improvement in living standards and reduction in poverty.
  • Achievement of the government’s economic objectives will require (i) an improvement in the efficiency of public investment, to ensure that Mongolia can fund its critical economic and social investments within the existing resource constraints; and (ii) the continued implementation of structural reforms aimed at improving the business climate and private sector productivity.
  • The government’s ambitious plans to establish an industrial park in Sainshand to process mining products should avoid risks to medium-term macroeconomic and external stability. Accordingly, the plans should involve reputable private sector companies which mobilize their own financing and bear a fair share of risk. The plans should be made consistent with Mongolia’s absorptive and implementation capacity and they should not lead to an excessive accumulation of external debt.
II. Macroeconomic Frameworks and Policies
In the near term, the key priority is to tighten macroeconomic policies to address pressures on the external position and put inflation on a downward trajectory. Meanwhile, ongoing efforts need to continue to strengthen the framework for macroeconomic policymaking with a view to dampen volatility, mitigate risks to economic and financial stability, and strengthen natural resource management over the long term.

A. Fiscal policy
11. The mission projects the fiscal deficit in 2012 to amount to about 900 billion togrogs (6.8 percent of GDP). In the mission’s view, the Supplementary 2012 budget did not take into account the full extent of the deceleration in revenue growth so far this year, particularly for VAT and customs duties. Therefore, the mission projects that revenue will fall about 500 billion short of the target in the Supplementary 2012 budget. Even with some further compression of spending during the remainder of the year, this is expected to translate into a very large domestic financing need. The mission welcomes the authorities’ intention to raise financing through the sale of government securities to the banking system and the social security fund. Consistent with the Central Bank Law and the broad principle of sound macroeconomic policy, the government should also aim to repay the 200 billion togrog loan it took from the BOM earlier in the year.

12. The 2013 budget will be the new government’s main policy tool to safeguard macroeconomic stability and reduce Mongolia’s vulnerability to a downturn in international coal and copper prices. In light of this, the mission welcomes the government’s commitment to implement the FSL with the 2013 budget. At the same time, the mission notes the critical importance for the 2013 budget to be based on realistic macroeconomic assumptions and revenue projections. These realistic revenue projections should then be used to set spending to ensure the FSL’s 2 percent of GDP structural deficit target is achieved. The persistent revenue shortfalls in 2012 underscore the dangers of basing the budget on overly optimistic revenue projections.

13. There is considerable risk that DBM operations will undermine the achievement of the goals of the FSL. Large-scale off-budget financing of non-revenue generating public infrastructure projects would exacerbate overheating pressures and undermine the integrity and meaningfulness of the FSL as they are not covered by its limits on the structural deficit or expenditure growth. This year, the DBM plans to disburse US$600 million—equivalent to more than half of on-budget capital budget—in lending to projects in roads, railways, utilities, urban housing, and the Sainshand Industrial Park. A number of these projects, in particular roads which make up a quarter of the loans, are social benefit projects that will not generate revenues, and for which funding from the state budget will eventually be needed to repay principal and interest.

14. A clear policy needs to be drawn up to ensure that the DBM can meet the long-term infrastructure needs of Mongolia in a macro-economically sustainable manner. In the mission’s view it is imperative that the government clarify that: (i) there are limits on the aggregate lending of the DBM to ensure alignment with the principles of the FSL; (ii) that the DBM only funds revenue-generating projects; or (iii) if it is to fund social benefit projects then the amount of lending to such projects would be reflected in the state budget and so would be fully covered by the FSL. Experience in other countries shows that without a clear policy there is a risk that the DBM will be used as a non-transparent way to finance non-priority or non-viable infrastructure projects, or to bypass fiscal limits, which ultimately requires costly budget-funded bailouts. The mission also urges the government to correct weaknesses in the Law on the DBM to bring it in line with international best practice.

15. In view of the uncertain external outlook there may be a need for additional measures to safeguard macroeconomic stability over the coming year. In this regard, the mission welcomes the contingency planning that has been initiated by a working group that includes senior officials from the Ministry of Finance, the Ministry of Economic Development and the BOM. To facilitate this planning, the mission recommends that the authorities prepare a prioritized list of all capital expenditure items in the 2013 budget and defer the initiation and funding of lower-priority items until later in the fiscal year, provided revenues are on track and external pressures have eased.

16. The implementation of the Social Welfare Law (SWL) should be a priority. The SWL, which was adopted earlier this year, represents a significant step forward in efficiently fighting poverty. It introduces a means-tested benefit that would reach the poorest households and replace the existing costly universal cash transfers. Multilateral donors have provided considerable support to help set up the means-tested benefit system. The government should now move forward and roll out this system.

17. The Debt Sustainability Analysis (DSA) suggests that Mongolia’s risk of debt distress remains low, even if the DBM issues US$500 million in new government-guaranteed international bonds each year for the next five years as is presently assumed in the mission’s baseline macroeconomic projections. However, this increased rate of debt accumulation in support of the government’s Action Plan for 2012-16 would increase Mongolia’s vulnerability to shocks. To limit the risks of debt distress, recourse to non-concessional foreign financing should be limited to commercially-viable projects.

18. The establishment of a sovereign wealth fund (SWF) would be an important complement to the FSL’s countercyclical fiscal policy. The mission welcomes the efforts underway to determine the modalities of a SWF that would best fit Mongolia.


B. Monetary and Exchange Rate Policy

19. Several factors suggest that it may be appropriate for the BOM to hold off for now on further tightening measures. Inflation remains considerably in excess of the BOM’s stated target for 2012 (“inflation in single digits”). However, monetary policy has been tightened substantially over the past year, togrog liquidity remains tight, in part owing to ongoing sales of foreign exchange, and meat prices are expected to ease in the coming months. Going forward, the BOM should remain vigilant to rising inflation pressures in case fiscal policy remains too expansionary or private credit reaccelerates.

20. The BOM’s intention to move to an inflation targeting framework is appropriate. In conjunction with a floating exchange rate regime (see below), this would complement and support the countercyclical fiscal policy implied by the FSL. Next steps to strengthen the monetary policy framework involve the development of the Treasury bill market and an interbank money market.

21. The floating exchange rate regime and auction system should be maintained. Interventions should be limited to smoothing excessive exchange rate volatility without changing the underlying trend in the exchange rate. Mongolia’s foreign exchange market remains shallow and it is understandable that the authorities do not want lumpy transactions to cause jumps in the exchange rate and disorderly market conditions. However, in the mission’s view a disproportionate share of the balance of payments pressures over the past year has been absorbed through sales of official reserves. If external pressures continue this may not be sustainable. To support the external position and exchange rate regime, it is critical to maintain appropriately tight macroeconomic policies, along the lines recommended above, and to continue efforts to deepen the foreign exchange market.

22. International reserves remain adequate for precautionary purposes and the real exchange rate is broadly in line with macroeconomic fundamentals. The mission’s exchange rate assessment critically depends on FSL implementation. Mongolia’s recent experience shows that looser fiscal policy would quickly lead to considerable overvaluation.

C. Financial Sector Issues
23. Efforts to strengthen the soundness and resilience of the financial sector should continue. Financial soundness indicators have improved over the past year. The capitalization and profitability of the banking system have risen and the outstanding stock of non-performing loans has declined in absolute terms. The mission welcomes the steps taken by the BOM to (i) raise the liquidity ratio to 25 percent from 18 percent, effective January 1, 2012; and (ii) require the five systemically important banks to raise their capital adequacy ratios to 14 percent from 12 percent (to be phased in by end-2013). As a next step, in line with earlier IMF technical assistance advice provided to the BOM, the mission recommends that the BOM gradually introduce dynamic provisioning, initially requiring 1 percent provisioning for all performing loans.

24. Three years after the crisis, it is time to replace the blanket deposit guarantee scheme by a limited deposit insurance scheme. The legal and institutional underpinnings for such a limited scheme should be worked out as a matter of priority. Meanwhile, as the expiration date for the existing scheme (November 2012) draws near, the authorities should communicate transitional arrangements as soon as possible to reduce uncertainty.

25. To reduce banks’ vulnerability to exchange rate fluctuations, the authorities should consider prohibiting foreign currency lending to unhedged borrowers. The use of the togrog in domestic transaction is now firmly entrenched. However, more than one third of bank loans and bank deposits are still denominated in U.S. dollars. Currency mismatches resulting from borrowers in U.S. dollars without U.S. dollar income increase the risk of default in case of a large depreciation of the togrog vis-a-vis the U.S. dollar. Consistent with an earlier FSAP recommendation, the mission believes that this risk should be addressed by putting in place a regulation that prohibits bank lending in foreign currency to borrowers without fully hedged positions through either foreign currency income or hedging instruments. This could be phased in gradually with assets and liabilities currently on banks’ balance sheets initially grandfathered. In any case, the authorities should start to collect comprehensive data on foreign currency lending.

26. A prohibition of foreign currency lending to unhedged borrowers would also contribute to strengthen the monetary transmission mechanism and develop the foreign exchange market. If enforced consistently across all banks, a larger share of new loans would be denominated in domestic currency. Given the existing limits on banks’ Net Open Foreign Currency Position, this would also encourage banks to compete more for domestic currency deposits. This would have important implications:
  • Deepening of the foreign exchange market. Banks would lower interest rates on U.S. dollar deposits and would instead offer to buy the U.S. dollars from their depositors and sell them in the foreign exchange market.
  • Strengthening of the monetary transmission mechanism. Increased competition among banks to provide loans in domestic currency and mobilize deposits in domestic currency would lead to narrower togrog interest rate spreads and would make interest rates more sensitive to changes in policy interest rates. The strengthening of the monetary transmission mechanism would eventually put the BOM in a stronger position to achieve its inflation target.
27. The Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) framework needs to be strengthened further. Mongolia has taken steps toward an effective AML/CFT framework by enacting the AML law and establishment of a Financial Intelligence Unit (FIU) in the BOM. However, the action plan agreed with the Financial Action Task Force (FATF) has only been partially implemented. The mission urges the authorities to address key remaining deficiencies in the AML/CFT framework including by further strengthening the AML law and adequately criminalizing money laundering and terrorist financing.

III. Structural Reforms and Other Issues
28. Efforts to improve the business climate and trade integration should be intensified. Mongolia ranks relatively high in the World Bank’s Doing Business Survey. However, there is ample scope to further streamline procedures and strengthen policy frameworks to boost private sector-led non-mineral growth. For instance, trading across borders, starting a business and dealing with construction permits remain cumbersome.

29. The new government should quickly clarify the foreign investment regime. The efficient development of Mongolia’s natural resources requires foreign financing and expertise. The perceived uncertainty regarding the foreign investment regime, particularly with regard to the mining sector, that has arisen in recent months and the political debate about the possible renegotiation of the OT contract adversely affects Mongolia’s standing among foreign investors.

30. Efforts to strengthen macroeconomics statistics should continue. Technical assistance is being provided to improve national accounts statistics. There is also scope to upgrade balance of payments statistics.

Thursday, September 27, 2012

Mongolia: Energy windfalls













Mongolia: Overcoming insurance challenges


Mongolia: Overcoming insurance challenges

As government programmes expand basic insurance coverage in Mongolia, economic growth spurred by resource revenues is expected to create surging demand in the private insurance market. However, ensuring the latter is managed by appropriate legislation represents a challenge to regulatory bodies.
In June, Mongolia’s Insurance and Human Development Fund (HDF) reported that 555,000 people out of the country’s 2.8m population were now covered by a social insurance scheme, which includes pensions, social welfare, health, worker’s compensation and unemployment benefits, representing a 13.6% year-on-year (y-o-y) rise.
Indeed, the whole insurance market in Mongolia is still in the development stage, with the first law enacted as recently as 1997. The private insurance market remains small, with 17 companies operating on MNT57bn ($41.7m) total capital as of 2011. There are a number of major challenges for sector growth, including a low level of consumer education on insurance and difficulty in reaching a scattered rural population. Additionally, there are currently no major international insurers with operations in the country.
This is widely expected to change in the coming years, however, as the rapid growth of the mining industry increases incomes and generates wealth. GDP per capita is expected to increase from $3000 in 2008 to $8000 by 2016, as vast coal and copper mines increase production.
According to the Mongolian Insurers Association, early signs of growth have already been seen in the most recent figures, with total premium income rising by 48% y-o-y to MNT24.2bn ($17.7m) by the second quarter of 2011 and total assets increasing to MNT72.2bn ($52.8m), a 60% y-o-y rise.
While auto and home insurance penetration is currently less than 5% of the population, the Mongolian government has already approved a law that will make auto insurance mandatory by October 1. Low-income housing projects are also planned, which will provide 6% loans on home purchases for first-time buyers. And that in turn will generate insurance business, on the loans, the borrowers or both.
Leading former state insurer Mongol Daatgal has estimated that in 2011, only 10% of the 300,000 vehicles in Mongolia had coverage. It is expected that the introduction of mandatory auto insurance in October 2012 will lead to an immediate 30% expansion in the size of the market, creating a MNT15bn ($11m) rise in premiums. Mongol Daatgal comprises around 30% of the country’s private insurance market, with seven smaller competitors capturing the majority of the remainder.
In a boost for the domestic insurance industry’s credibility, in 2011 the Financial Regulatory Commission (FRC) proposed that companies share customer data with each other. The aim of this move is to eliminate market inefficiencies. The FRC has also focused on helping policyholders receive what they are contractually owed in a bid to improve consumer confidence.
Key segments expected to grow as rising incomes generate growth in the market are livestock insurance and micro-insurance. While the country has a livestock population of some 40m, Mongolia is also susceptible to notoriously harsh winters, known as dzuds. The Index-based Livestock Insurance Project, a World Bank-backed microinsurance programme designed to protect farmers from the financial consequences of losing their herds, has become a major success since its launch as a pilot project in 2009, with national sales for 2011 closing at MNT436m ($318,800) in policy income.
There has been less development in more traditional microinsurance segments, despite the potential raised by the country’s low income levels. In 2010 Xac Bank, a Mongolia-based micro-financer, in partnership with local insurer Tenger, launched two microinsurance products: personal accident insurance and health insurance. However, as yet there is no sales data available.
The labour insurance segment also presents huge potential, thanks to the expanding mining sector. In 2011, some 45,000 workers were employed in the sector. An influx of wealthy expatriates is also leading to the creation of niche products, with Mandal Insurance in 2011 launching a dedicated range of retail and commercial services specifically for expatriates.
The expected increase in the number of products has, however, raised concerns over regulation. The Asian Development Bank wrote in a December 2011 report, “Many new insurance products, such as life insurance and re-insurance, which are not included in the Law on Insurance April 2004, are currently emerging and regulations need to be prepared, thus challenging the FRC to keep pace with the market.”
The government is currently mulling reforms to the insurance law, which include the creation and modification of rules regarding professional liability insurance. Proposed legislative changes expected later this year aim to increase minimum capital requirements, as well as allow firms to obtain more control over what can be done with investment accounts.

Thursday, August 16, 2012

NAME OF NATIONS (Mongols)

NAME OF NATIONS(italics written names are proper names but partly others are proper too)


Mongol: 28 Bonan baoan, 29 Bayad/Bayan, BU 30 Buryat, 31 Daur dagur, 32 Darchad, 33 Darigana, 34 Dongxiang, 35 Dörböd, MO/NM 36 Khalkh, KA 37 Kalmyk khalmag, 38 Khamnigan-mongqol, AF's north: moghol, 39 Tu monguor, 40 Ölöt yikh mianggan, 41 Ili-torgut, 42 Urjanchaj, 57 Altai-Uryangkhai, 26 Soyot mator, 27 Yurat yurak. 43 Üzemkhin/Üzemcin. 49 Solon, 50 Ongkor Solon.73 Nogay noghai, 74 Salar, 75 Shor tadar, T 76 Tatar, 77 Teleut, 78 Tofa/Tofalar tubalar/karagas/kara-kash, 79 Tsaatan duhka, TU Tuvan/Tofa, 81 Tuxa/Khövsgöl Uryangkhai,


 NAME OF NATIONS(italics written names are proper names but partly others are proper too)
ESKIMO-ALEUT: 1 Aleut: 1A unangan, 1B allithuh, 2 Eskimo: 2A yupikhyt, 2B yuhyt.PALEO-SIBERIAN: 3 Alyutor/Aliutor elutel'u/ramkyke, 4 Chukchi lygoravetlyan:   4A ankalyn, 4B chavchu, 5 Chuvan, 6 Kerek, 7 Kamchadal,
8 Ket jugun: 8A pumpokol, 8B yug, 9 Koryak: 9A chavchu, 9B nymylan,10 Nivkh nivh/n'ivhgn-n'igvn, 11 Arin, 12 Yukaghir: 12A buguch, 12B dutkil, 12C omoki, 12D vadul, 13 Itelmen itenme'n-itelmen.
URALIC:
Finno-Ugric:

FINNIC: E Estonian, S Finnish suomi,14 Lapp saam: 14A kildan, 14B ter, 14C skolt, 14D Inari-saam, K Karelian, KO Komi, 15 Komi-Permyak,
16 Izhor, 17 Veps, M Mordvin, MU Mari, MU Udmurt.
UGRIC: 18 Khanty: 18A hantö,18B kantök, 19 Mansi: 19A maan's'i, 19B män's, 20 Hungarian magyar.
Samojed:
21 Enet enet'-enche, 22 Nenets n'enyts/hasaba, 23 Nganasan nganasa, 24 Selkup söl'kup, 25 Kamas kalmazh/kangmadzh,
26 Soyot mator, 27 Yurat yurak.


ALTAIC:
Mongol:
28 Bonan baoan, 29 Bayad/Bayan, BU 30 Buryat, 31 Daur dagur, 32 Darchad, 33 Darigana, 34 Dongxiang, 35 Dörböd, MO/NM 36 Khalkh, KA 37 Kalmyk khalmag, 38 Khamnigan-mongqol, AF's north: moghol, 39 Tu monguor, 40 Ölöt yikh mianggan, 41 Ili-torgut, 42 Urjanchaj,
43 Üzemkhin/Üzemcin.


Tungus-Manchu:
44 Even orochel/oven/even, 45 Evenk(nations): 45A boje, 45B birach/birar, 45C ile, 45D manjagir/manegir, 45E nakagyr,
45F orochon, 45G ainak, 45H solon, HJ/JI/LO 46 Manchu/Man manch/manju, 47 Nanay nani: 47A Akani, 47 B Hezhen hedzhe/hedje, 47C kili/kile,
48 Negidal ngegida: 48A ilkan beye, 48B amgun beyenin, 49 Solon, 50 Ongkor Solon, 51 Oroch nani/orochisal, 52 Orok ul'ta/ulcha/uil'ta/ula,
53 Udegey uddee/kekar/käkh'ala, 54 Ulch nani, 55 Xibe/Xibo/Sibe shibe.
Turkic:
56 Altay(people) altai-kishi: Northern: 56A Tubalar tuba kishi/dish kishi, 56B Chelkan/Lebedin chalkandu kishi/kuu kishi, 56C Kumandin kumandy kishi, 56D Shor shor kishi; Southern: 56E Telengit chu kishi, 56F Altai Kishi, 56G Maimalar maima kishi, 56H Teles tölös/ulan kishi,
56I Teleut telengut/telenget. A Azerbaijanian, 
58 Balkar, 59 Baraba paraba/shop-ierly-halk, BA Bashkir, 60 Chulym chulym turk, C Chuvash, 61 Dolgan dolghan/toata golar/tagal, 62 Gagauz, 63 Kamas kangmadzhy, 64 Karachay, 65 Karaim, 66 Karakalpak, KS 67 Kazakh,
68 Khakass(people): sagai, khas, peltyr, shor, koybal, hyzyl kishi, KI 69 Kirgiz, 70 Manchu-Kirgis, 71 Kumyk, 72 Meskhetian Turkish, 73 Nogay noghai, 74 Salar, 75 Shor tadar, T 76 Tatar, 77 Teleut, 78 Tofa/Tofalar tubalar/karagas/kara-kash, 79 Tsaatan duhka, 80 Turkish türkce/halk,
TK Turkmen/Trukhmen türpen, TU Tuvan/Tofa, 81 Tuxa/Khövsgöl Uryangkhai, XN 82 Uighur, US 83 Uzbek, SA 84 Yakut sakha, 85 Yugur.
KOREAN: KR 86 Korean (Chaoxian) han-kuk-in.AINU: 87 Ainu.JAPANESE/Nippon: NI Japanese nihonjin/nihongoSINO-TIBETAN:SINITIC: N 88 Hui (Moslem Han), CH Han.TIBETO-BURMAN: 89 Drung, 90 Lhoba, 91 Monba, YN 92 Nu, XZ 93 Tibetan,    SI 94 Yi.Major Peoples are those which belong to the R: Slavic, Indo-European, Caucasus, Arabic and Sino-Tibetan Groups; all those include minorities too.

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Wednesday, August 15, 2012

CODA: ACROSS THE MONGOLIAN STEPPES

CODA: ACROSS THE MONGOLIAN STEPPES


David A. Andelman is Editor of World Policy Journal.
ULAANBAATAR, Mongolia—“Before we begin, I’d like to decline two questions,” Batchimeg, the National Security Adviser to Mongolia’s president warns me. “One is railroads, the other is Chinese workers.” With those caveats,  touches on the two third-rail issues that define her nation’s precarious place in the world.
Sandwiched between Russia and China—both superpowers that, ironically, it once conquered—this tiny nation of almost 2.8 million people sprawls across a territory more than twice the size of France. And it is trying desperately to find some autonomy in a world that often seems intent only in snagging a slice of its natural resource windfall, which it has only begun to unearth. Mongolia, like a handful of other smaller nations in similar geo-political circumstances, is doing its best to survive, even prosper, against enormous odds. But Mongolia has something else going for it—a patrimony of a scope that all but defies definition.

I’ve been fascinated for years by the plight of small countries trapped between large powers. Two years ago, I chronicled in this space the challenges Bhutan faces, nestled between China and India—struggling, as do a handful of similar nations, to maintain some semblance of national identity and union. In Europe, Africa, and Latin America, there are similar cases of nations searching desperately to develop their own, unique identity. Dominated or overshadowed by powerful neighbors, some of these states date back centuries, others are more recently minted products of a colonial past, but most are saddled with boundaries that bear little resemblance to the realities of tribes, cultures, religions, or ethnicities.

For Mongolia, the challenges are even more profound and pressing. In this era of post-Cold War détente, its actual sovereignty may no longer be in question. Still, there are even larger stakes that bear directly on what remains a latent competition of epic proportions between its larger neighbors. Since the moment of Mongolia’s independence from the Soviet bloc less than a quarter century ago, vast reserves of coal (including the world’s single largest deposit of vital coking coal), oil and gas, copper, gold, uranium, and a host of other valuable minerals have been uncovered. Explorers and prospectors flock to Ulaanbaatar’s handful of western-style hotels. Over lavish buffet breakfasts in the glass-and-steel restaurant of the Ramada, they swap tales of distant strikes and pots of riches just over the horizon, then fan out across the country, hoping to find still more wealth buried beneath the trackless steppes and the endless blue sky.
Down in the street, vast snarls of traffic back up along the capital’s one main thoroughfare—Peace Avenue as it was dubbed by the nation’s Soviet overlords, who also re-named the capital when they took over in 1923. Ulaanbaatar (“Red Hero” in Mongolian) is only one legacy among many that it has not managed to shed from the three quarters of a century of Russian rule.

RUSSIANS FIRST
The Russians did a lot more to Mongolia than simply re-name geography. When the first Bolshevik troops crossed the border from Siberia, they found a primitive people who were an easy conquest.
They quickly began to bend this nation of largely nomadic herders to their own will. First to go was the ancient “vertical script”—a language of runes that the Red Army invaders swapped out for their own Cyrillic alphabet (with a couple of extra letters to facilitate transliteration of a tongue that has little to do with Russian).
When the rail system arrived, it was the wider Russian gauge of 4 feet 11 5/8 inches, designed to make certain that invaders from the west or east, where rails are spaced the standard international width of 4 feet 8 1/2 inches, would be unable simply to roll their troop transports to the battlefields. But until 1947, after World War II, there was no railway at all in Mongolia. At first, the Russians liked it that way—it would give them more warning of any approach of Japanese forces. But with the post-war push for self-sufficiency and a desire to use all its satellites to build a Soviet industrial empire, Mongolia was pressed into service, so the railroad arrived.
And pressed is the right word. The Russian occupiers made certain that Mongolia’s leaders would match, even outdo, Joseph Stalin in barbarity and repressiveness. They found willing partners in the early rulers of the Mongolian People’s Republic. First Khorloogiin Choibalsan embarked on a series of vicious purges, destroying any political opposition, then turned to the nation’s passive Buddhist monks, torching monasteries across the country, executing 35,000 lamas, exiling tens of thousands more to Siberia. The vicious Choibalsan was succeeded by Yumjaagiin Tsedenbal, who was cut from the same bolt of cloth, and tried repeatedly to bring Mongolia into the Soviet Union as the 16th Republic. He was met with such determined opposition on every side that the Kremlin decided this vast, poor nation wasn’t worth the effort and was content to leave it, as it began, as its first and largest satellite.

Not surprisingly, one of the early initiatives of the  post-Soviet government, when it arrived in 1990, was an effort to return to the vertical script. Indeed, our translator, Hashi, an elementary school student during this abortive experiment, was one of those forced to learn the ancient Mongolian alphabet—until the government recognized the enormous cost of converting an entire nation to a new vernacular and killed the idea. Today Mongolia boasts a literacy rate of 97.3 percent—higher even than China at 95.9 percent.
There were other legacies of the Soviet era, which extended from 1923 to 1990. The first industrial plants were constructed in Ulaanbaatar and the northeastern cities of Darkhan and Choibalsan, which since the departure of the Soviets now has the highest unemployment rate in Mongolia. The first milk processing facility was built in the capital. Soviet military installations began springing up across the countryside, with substantial concentrations along the frontier with China.
But perhaps the greatest and least-known legacy was the decision by the Soviets to map Mongolia, not in terms of roads (there was a single paved avenue in the capital and only a network of dirt tracks across the steppes) but rather for minerals. All but unrecognized, even today, is the existence of a detailed geophysical survey of every square kilometer of Mongolian territory—an analysis of its potential mineral-bearing rock formations, the nature of its land and soil. In part, of course, this was in the interest of determining the most advantageous routes for Soviet military machinery—tanks and personnel transports. But the legacy, buried today in government archives, includes a sense of where the most valuable of the nation’s patrimony exists, uncovered, beneath the land. A handful of savvy western prospectors have stumbled on this treasure trove. But it’s believed that much still remains undiscovered.

FRAUGHT LEGACY
At the same time, powerful emotions were building during the decades of oppression—perhaps Mongolia’s most complex legacy, fraught with implications for the nation’s place in today’s Asia. “As far as Russia, many Mongolians still keep a certain sympathy inherited from the Soviet era,” smiles Batchimeg as she continues most diplomatically.
“Even some of the younger people would cherish the relationship with Russia, too. We believe this is a very important factor for any bilateral relationship. Mongolian national leaders have to understand the importance of this.”
The Russian legacy, and that nation’s very real contemporary presence, straddles the frontier with Siberia, which we cross on the Trans-Mongolian Railway. An unsmiling set of border patrol officers with sniffing German shepherds board on the Russian side in Naushki in the Buryat Republic. Their Mongolian counterparts jump on the train five miles down the line in Sukhbaatar after we cross the barbed-wire frontier. It is a seamless transition, though, because of the common gauge shared by the Russian and Mongolian mainline rail systems. By contrast, at the Chinese border, a complex maneuver called “changing the bogeys” is necessary. The Russian-Mongolian carriages are lifted off the wheel assemblies in a specially designed shed, the new Chinese-standard gauge carriages slipped beneath each car—passenger and freight alike. Not surprisingly it adds time and money for each pound of freight, or even more importantly, coal and ore, that’s shipped to or from China.
So when it came time to consider a new rail link to the vast southern Mongolian coal, copper, and gold mines that are just now opening for business in the South Gobi, far from the nearest approach to the Trans-Mongolian trunk line, selecting the proper gauge was very much on the minds of the Mongolian parliament. The government is divided, almost equally, between two parties, the MPP or Mongolian People’s Party (the socialist successor to the Soviet-era Mongolian People’s Revolutionary Party, revolutions now being pretty much a dead letter), and the newly minted Democratic party of the nation’s president. Outside forces are still able to tilt the balance at critical moments.
On this occasion, the Russia weighed in with its heavy thumb on the scale. In a meeting last June with Mongolian President Tsakhiagiin Elbegdorj, President Dmitri Medvedev and Prime Minister Vladimir Putin pledged a $1.5 billion investment in new track totaling 2,500 miles for the Mongolian rail network. Then they added a sweetener of $250 million to build a long spur from the Tavan Tolgoi mine to link up with the Trans-Siberian railway and onward to Vladivostok, the nearest Russian seaport to Mongolia. The problem is not the construction, though, it’s the operation. With the Mongolian stretch alone at nearly 600 miles to Choibalsan and then another 900 miles via the Trans-Siberian line to Vladivostok, the World Bank has estimated the transport cost at $75 a ton, compared with $15 a ton via Chinese rail links, barely 100 miles away. If, as the World Bank calculates, the South Gobi mines could be producing 45 million tons of coal a year, much of it for export, the cost of transport to Russia over China suggests a considerable disparity.
Still, in the end, the Mongolian parliament voted to cast its lot with Russia. “The mine operators can always build a little spur into China if they need it eventually,” explains one MPP parliamentarian diplomatically after the vote. “We left that open in the final wording of the legislation.” It was meant to be a Solomonic decision—dividing, or more appropriately parsing, the nation’s loyalties. But the real problem is that not all Mongolians see this as the best way to go.

HATE VS. FEAR
“We hate Russia, but we fear China,” says one young Mongolian who was born in the Soviet era and has visited both nations. He’s speaking in the long, narrow corridor of a Pullman car on the Trans-Mongolian Railway—traveling across the Gobi, one of the world’s largest deserts. Barely 80,000 people live in Mongolia’s forbidding South Gobi province—a territory larger than Bangladesh, which has a population of 170 million—though the World Bank projects South Gobi’s population to double over the next five years with the influx of miners and their families. Indeed, entire new towns are already in place, like the ultra-modern glass and steel dorms and apartments at the Tavan Tolgoi mine that boasts a school run under contract with an elite academy in the nation’s capital 335 miles to the north. First graders in their second week of English classes leap to their feet and, beaming with pride, sing the ABC song to us.
From the train windows, not much changes after crossing the Mongolian-Chinese frontier. It’s the same Gobi landscape—expanding at the rate of 1,400 square miles a year as desertification gobbles up the fertile grasslands that have nourished Mongolian livestock for millennia.

IT'S ALL ABOUT THE CHINESE
China entered into the Mongolian consciousness far earlier than Russia. As early as 180 A.D., warriors of the Xianbei swept into regions of northern China. A millennium later, Chinggis Khan (known in the West as Genghis Khan) turned toward the warmer climates of the south and extended his rule beyond several small valleys in what is now northeastern Mongolia.
His legions of 95,000 trained warriors (out of a total population of just 400,000) swept across the steppes into China in lightning raids that Hitler studied in preparation for his mechanized blitzkriegs. To give a sense of scale, if the United States were to maintain a standing army of this size, relative to its population, it would have armed forces totaling 73.9 million, compared with 2.3 million actually under arms, including national guard and reserves. Today, Mongolia has just 12,000 men in its military, including a special brigade of 2,500 tapped to serve abroad in the international peacekeeping roles it has embraced.
China, however, deploys vast reserves of military forces and armaments throughout its frontier regions, at the ready for any menace, real or imagined, inside and outside the country. As our train rolls into China, we come across the first example—more than 100 flatcars loaded with tanks and personnel carriers all pointed north toward the frontier of a nation with which it boasts nominally friendly relations.

But within the boundaries of Inner Mongolia lie the seeds of enormous potential unrest. In the 2000 census, there were some 4 million Mongols in the region—nearly double the entire population of the Mongolian Republic itself. Dominated by the Han Chinese, who comprise over three-quarters of the province’s population, they feel discriminated against and oppressed. And they are hardly reluctant to demonstrate these feelings. This year alone, at least three Mongolian herders, protesting the heavy mining trucks that have begun crisscrossing their traditional grazing grounds, have been run down and killed—whether by accident or intentionally is not clear. Each incident, however, has touched off widespread protests in the provincial capital of Hohhot, where authorities have cracked down with massive shows of force and widespread arrests, carting hundreds of demonstrators to so-called black prisons where they have disappeared for days, even weeks.
In Hohhot, we happen upon the wife of a foreign businessman who was herself swept up. Driving near the university, seen by authorities as a hotbed of ethnic Mongolian unrest, she describes how she was in her car, accompanied only by her family’s chauffeur, when she used her iPhone to snap a photo of the massive police presence. “They were right on us,” she begins, still clearly shaken by the experience that had taken place four months earlier. “Plainclothes security men dragged both of us from my car and bundled us into an unmarked car.”
Taken to what was described to her as a “black prison,” their cell phones were confiscated and the contraband photo deleted. “No one will know where you are, we can do with you what we want, we can hold you indefinitely, you will never be found, and we will kill your driver,” she recalls the officers telling them. When she and her driver arrived at their destination with the secret police who’d seized them, she saw several thousand students and others crammed inside the building. She was petrified as they unchained the doors and shoved her into the makeshift facility. Fortunately, her driver had secreted a second cell phone and managed a brief call to her husband, a consultant with a powerfully connected local Chinese factory. Company officials quickly began making calls, though it took hours before she was released.
It’s scarcely surprising that Mongolians fear the Chinese. Mongolians are a fiercely independent people, yet ironically the nation has known barely 12 years of real independence until their final liberation from Soviet rule in 1990. On December 29, 1911, the so-called Outer Mongolians took advantage of the Wuchang Uprising that ended the Qing Dynasty’s rule and declared their own nation’s independence from China. It was but a brief flirtation with freedom, lasting through World War I when both Russia and China were preoccupied with a global conflict, their own internal revolutions, and the civil wars that followed. But by 1923, Mongolia had swapped Chinese rule for full Russian domination.

LIVING THE GER LIFE
Throughout, the Mongolian mentality of fiercely independent herders and horsemen preserved an internal compass that has managed somehow to hold at bay their two, often feuding, superpower neighbors. Maintaining their independence from China, they were drawn into the Russian sphere, managing to escape absorption into the Soviet Union itself—the fate of many of their neighbors across Central Asia. Culturally, the Mongolians are like no other Asian peoples, or indeed like few anywhere in the world. Ethnically they bear a closer resemblance to the Buryats of Siberia than the Han Chinese, with whom they share few traits. They eat little or no rice, their primary diet being mutton, preferably laced with fat—a taste developed from centuries of surviving bitter Mongolian winters that are still defined by the fearsome dzug. These violent blizzards sweep down from the Altai mountains that form a stretch of Mongolia’s western frontier with Kazakhstan, burying cattle, sheep, and humans alike. In the ger districts of Ulaanbaatar, thousands of victims of the dzug have drifted, seeking work, but above all sanctuary, from the harsh life that killed their herds, driving them toward poverty, even starvation.
Five years ago, Zaya came to the Mongolian capital from the remote northwest—bringing along her ger, a flat, round, Mongolian felt tent, from the isolated countryside to the heart of a sprawling slum on the outskirts of this increasingly congested urban landscape. Zaya had lost an entire herd of sheep, cows, and cashmere goats—virtually her entire wealth. Six winters ago, herders in Hovsgol province—an immense tract of high mountains, stunning lakes, and brutal winters—
were the victims of a particularly nasty dzug, sending thousands fleeing to what they hoped would be a land of opportunity in Ulaanbaatar, only to be disappointed. “I could not find any jobs in Hovsgol,” she says. “It’s not just the animals, it’s the dzug. No matter how many animals you have, if there is the dzug it is impossible.”
When she arrived, she found no jobs and few prospects. All around her, however, she could see thousands of Chinese migrant workers moving into Ulaanbaatar, fueling an unparalleled building boom, working for minimal wages and raising tensions in a nation where vast numbers of Mongolians remain jobless. Beyond the railway issue, this is the second subject that sends shivers down the spines of senior Mongolian officials. These Chinese workers have found their way to construction sites where they are welcomed by builders seeking to cash in on the explosive development boom. Certainly there is a desperate need for the skills and willing hands represented by the migrants from south of the border, but Mongolians also need jobs. It has become, as Batchimeg’s reluctance to discuss the subject suggests, an issue of enormous sensitivity.
Eventually, Zaya found a part-time job as a cashier, which requires little more skill than the ability to make change and read numbers, and a husband—a fellow refugee of Hovsgol. But today, she has two children, aged two and four, “so I have to stay home now and care for the baby.”
How is her life now, compared with then? A long pause as she looks off into the distance. “There is no difference,” she sighs. She still lives in a ger. Her husband is a carpenter. “My dream is to have a house,” she continues. But right now, all she has is some electricity—and her dreams.
We’ve come across her, dragging a small, rusting luggage cart and two grimy gasoline cans filled with water that she’s hauling up a steep slope to her ger. There’s no running water in the community.
So each day, she has to walk down to a small, brick building that’s the water source. The city has drilled a well there and for a few togrog (a penny or so), villagers can fill their water jugs. We’re not talking potable water—it must still be boiled before it can be used for human consumption.
Each month, Zaya, her husband and their two children receive a stipend of about $20 from the federal government—a handout engineered by the MPP, which holds a majority of 46 seats out of 76 in the State Great Hural, or parliament. For now, it’s all that stands between Zaya and penury. “It’s 30 percent of our income each month,” she says. “With it, I can buy rice, flour. But we’d rather have the government give my husband some carpentry tools, then perhaps we could make a decent living.” And their lot is better than many of her neighbors in Ulaanbaatar. Only about half have jobs of any sort.
The predicament of Zaya and her husband, and that of dozens of others we talk with during our visit, raises a critical question that is dividing the nation and its leadership—handouts versus infrastructure. “I do not believe that distributing cash can be really helpful for the people, for the country,” says Batchimeg, both a senior aide to the president and a member of the opposition Democratic Party. “This populist policy actually hurts the economy by generating inflation and creating an additional burden for the private sector, also lessening the people’s need to work.” Still, the handouts are a potent political force that helps keep the MPP in power.
And indeed there are some who still see some progress being made against poverty, even in the most depressed communities of Ulaanbaatar. The United States Ambassador to Mongolia, Jonathan Addleton, measures progress in the ger camps by “the number of bright tin roofs.” The number of these red or blue roofs marking new houses has been increasing with every visit, he says in an interview—
a suggestion of new economic activity. Still, that’s just the sort of house that Zaya and her husband can only dream about. For every new tin roof, it seems there are still more gers, climbing out of the blighted valley into the hills, stretching ever farther from the bright lights and the big jobs downtown—for many a lifetime away, certainly out of sight and for the moment at least, out of grasp.
Indeed, Mongolia is rapidly becoming three nations—the urban poor, the rural poor, and the privileged. The big question is how the government might manage to bridge these gaps—before it is too late. Will the vast sums being lifted from the mines be able to trickle down, spreading outward from the smartly dressed crowds of young people strolling through Sukhbaatar Square in downtown Ulaanbaatar to the misery of the ger camps beyond the ring road and on to the rural herders of the countryside? The aspirations are real, and not yet an overwhelming problem, since the government’s handouts have been able to buy a degree of tranquility. But if commodity prices turn south, anything is possible.
There are those who see the ger itself and all it represents as one of those possible bridges—a central component of Mongolian society at all levels. Even the wealthiest Mongolians maintain their rural gers for sentimental reasons. At the sprawling window and door factory, just one element of the rapidly growing Max Group conglomerate, a huge intricately carved wooden door, wider than it is tall, is in the final stages of production. It’s destined for the ger of the Max co-founder, Ganbaatar Dagvadorj. Indeed, his Ramada hotel is the most advanced in Ulaanbaatar and where Vice President Biden’s advance party booked 100 rooms just after it opened for business.
In many respects, Biden’s visit, a total of six hours from wheels down to wheels up, which did not go unnoticed here, was nevertheless a defining moment for the country. It was the first for an American vice president since Henry Wallace stopped by for two days (truncated from seven) in 1944. That visit was of enormous importance to Mongolian Buddhists. A leading lama at the central Gandan Monastery explains it was Wallace’s request to see a functioning sanctuary that led the nation’s vicious Stalinist leader Choibalsan to order the rapid re-opening of Gandan and the return of a handful of monks and worshippers.
America is central to Mongolia’s search for a reliable third neighbor. A policy that is seen as a guarantee of the nation’s long-term independence. “The third neighbor, as far as I can tell, is not just one country, it is a number of countries,” says Ambassador Addleton. “At one time, soon after I arrived, I talked about the third neighbor being the rest of the world. And the foreign minister said, ‘no it’s not the rest of the world, it’s our fellow democracies.’ So he talked about Korea, Japan, India, Europe, and the United States. The first overseas visit made by President Elbegdorj was actually to India, in some sense reinforcing that particular third neighbor. We also appreciate and empathize with the Mongolian perspective which is that they want a three-dimensional relationship with the world and we are part of that.”
With such membership, however, comes responsibilities. And the United States and a number of other nations seem to be living up to these responsibilities only in the breach. The United States has its own agenda with respect to Mongolia, which is being increasingly perceived by the nation’s leaders and its people as no less pernicious than its superpower neighbors. The Biden six-hour “stop-by” had its own subtext, conveyed in the moments of private time with President Elbegdorj sandwiched between ceremonial horseback riding, archery demonstrations, and a visit to a ger. The United States is pressing Mongolia for two immediate concessions. First, it wants to turn vast stretches of some more remote areas of the Mongolian steppes into a waste dump for nuclear detritus—effectively rendering it permanently uninhabitable or exploitable, especially should vast mineral reserves be discovered deep beneath that territory. In September, however, President Elbegdorj is said to have put that project in the deep freeze and fired the diplomat negotiating it. “The nuclear waste of other countries is a snake grown up in another body,” he told a Mongolian journalist. “Receiving back the nuclear waste … is pressure from foreign superpowers, and we must throw out this delusion.”
Second, and more immediately, Biden was pressing Mongolia to make certain that an American coal producer, Peabody Coal, be among those foreign companies that are part of the concession to develop the vast Tavan Tolgoi deposits.
At the same time Biden was passing through, however, so was the president of South Korea.  Two items were said to be high on that agenda—the 33,000 Mongolians working in South Korea, the largest population of Mongolians living abroad, and South Korean participation in the Tavan Tolgoi consortium. Mongolian migrant workers, many living in the all-Mongolian village of Junggu in Gwanghui Dong province, are said to be the target of Korea’s crackdown on all varieties of foreign workers. And South Korea is said to be especially anxious to be part of the coal mining consortium since it will also be serving as a significant market for the mine’s output.
In September, Mongolia’s National Security Council sent the entire contract, which did include Peabody, though not South Korea, back to the drawing boards for a complete re-thinking. Two months later, a senior government official emailed “there has [still] not been any substantial progress with the TT coal consortium project.”

Such tortured friendships will only add to the burdens Mongolia is already facing closer to home from Russia and China. Both are also pushing their own agendas, using a host of incentives from political and diplomatic pressure to outright bribery. President Dmitri Medvedev, for instance, is reported to have promised to write off 98 percent of Mongolia’s debt to Russia and provide the country with 375 million rubles ($12.3 million) for livestock vaccination for a substantial stake in a vast uranium mine that the Russians still see as their property. “It is not that logical and fair to link all the benign moves by Russians with their ambitions in uranium,” says he, -clear evidence of Mongolia’s efforts at even-handedness in dealing with its immediate neighbors. China is also said to be lusting after the output of these vast uranium projects said to total 25,000 tons, potentially capable of producing upwards of $300 million a year of high-quality ore.
What Mongolia needs especially is selfless friendships with no strings attached from true democracies to which Mongolia looks for partnership and as an example. In turn, Mongolia may serve as an example to other democratic nations that it correctly sees are so important to its survival. Mongolia has truly been free to find its own way in the world for barely a quarter century without others seeking to force on them their own priorities. While the instinct of independence, indeed mastery of others, has been buried in their souls for a millennium, it is only now being tested again in an entirely new and more complex, even vicious contemporary environment. Certainly there are enough who want something from this nation without the democracies who should know better adding to their burdens.
Indeed, Mongolian officials boast proudly of their nation’s leadership, which it assumed in July, of the 25-nation governing council of the Community of Democracies. “We cherish personal freedoms,” concludes “Our people again feel freedom. It is part of everyday life for every Mongolian. And democracy is a guarantee of our national security.” And, he might add, its place in the world, even in this most fraught neighborhood.