Monday, May 18, 2009

The Other "Tolgoi"

Over the weekend I made a trip out to the eastern part of Umnugovi Aimag with my wife and a group of friends from Khankhongor Soum. Along the way we stopped at Tavan Tolgoi which is Mongolia's fantastically huge coal deposit and the other "tolgoi" after Oyu Tolgoi (the copper and gold mine near Khanbogd Soum). It was an impressive sight to behold. It was a large open pit mining operation, and although it is not even close to working at full capacity, it was amazing to see the amount of trucks coming and going from the pit. We were all greatly impressed by the size and potential scale of the project.

A few kilometers down the road we were flagged down by reporters from Channel 25 who were interviewing truck drivers and people like us about the conditions around the mine and on the road. Listening to our driver talk with the reporters I got a new sense of the uneasiness that regular people feel about the mining agreements at Tavan Tolgoi and Oyu Tolgoi. In particular when asked about the large trucks coming and going from the mine site tearing up the jeep trail used to go from the aimag center to the Chinese border, he made the comment that it was a bit frightening because the trucks were large, wipping up dangerous amounts of dust and he didn't know who the drivers were--Are they Mongolian or not? Who do they work for? Where do they come from and where do they go?

These questions struck me as reflecting a much larger worry of average people. Seeing the shear size of the Tavan Tolgoi mine site one is almost awestruck by it. So much mineral wealth. And, yet, where is it going? Who is going to reap the benefits of that wealth? Is it a very large fraud on ordinary people? If you don't even know who the drivers are, how can you know who the people making the real money are?

Of course, there are answers to these questions if one goes looking for them, but that is not what most people do. Instead in the absence of information people worry and they let their imaginations take control of what they know from experience. In Mongolia this is a particularly unproductive and insidious thing to happen. Owen Lattimore described the following in his book "Nomads and Commissars" (Oxford Press 1962) in a chapter entitled "Autonomous Mongolia: Years of Frustration" when referring to the forces that led to that nationalist movement that eventually became the socialist movement in the 1930s and 40s:

The people felt that every time there was a deal over national autonomy, over debts to Chinese merchants, over anything at all, there was also a sell-out. The big fellows came out of it with new titles, emoluments, and stipends. Then they turned around and wanted more taxes and special contributions from the people to pay for it all. They incited ordinary Mongols to massacre and beat up Chinese merchants and money-lenders, and burn their account books, but that just put the big fellows in a position to say to the Chinese, later, "Well, forget about my personal debt and I'll help you to collect the rest." (pg. 65)

There are some unsettling parallels between that passage and the present situation in Mongolia. One almost feels that it could be written today with "Chinese merchant" replaced by "mining conglomerate." It makes one think of the old adage the more things change the more they stay the same.

It is a real concern that ordinary people do not trust anyone to make the proper decision regarding the mineral wealth of the country whether it be Mongolia's political leaders or the people negotiating the mining deals for the multi-national corporations. I always understood that in an academic and abstract way, but seeing Tavan Tolgoi for the first time made me feel first hand a sense of the real worry that ordinary people have. It is the same feeling you get when you sense that a trick is being played on you. The rich get richer, the poor get poorer, and Mongolia loses its best chance at accumulating real wealth because people at the top are playing a game.

It is easy to become cynical and read into these feelings that nothing good can come of all this, as if the sentiment that the rich get richer; etc, is the only alternative. The mining agreements have been painfully slow to move towards fruition. On the one hand, this could mean that the "big fellows" are just trying to position themselves to become even wealthier at the expense of everyone else. On the other hand, it might mean that the worries of ordinary people like my driver to eastern Umnugovi are actually having an influence on the process. A third option is that both are occurring with a whole lot of other political machinations in between which makes the whole thing one big Gordian knot. Whatever it is, it is certainly not easy.

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