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http://zgm.mn/post/1419/

War against West

​Rumors about foreign investors dismantling Mongolia’s economy are nothing new​

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http://zgm.mn/post/1419/


THE FIRST WAR AGAINST THE WEST

Rumors about foreign investors dismantling Mongolia’s economy are nothing new. There is even a history of one of our mighty neighbors conducting such an operation before they established total political and economic control over our country. In the beginning of the 20th century, Mongolia proclaimed their newly regained independence and announced that Chinggis Khaan’s steppes woke up from their slumber. The world became interested in Mongolians, who were quietly sleeping under the Manchu or Qin rule for several centuries. In general, that was an interesting period when the world was set in motion and the kindling of two great wars that will change the political map of our planet several times started smoking. Christian priests headed by Frans August Larson, who later received a title of Duke from Bogd Khaan, came to Mongolia. Danish farmers, such as Henning Haslund-Christensen, and others moved to Khuvsgul aimag to start a modern livestock breeding and trade firms. Many other countries began operation in Mongolia; for instance, a foreign-invested company called “Mongolor” mined gold and the famous Roy Andrews’ expedition astonished the world with dinosaur eggs found in the Gobi dessert. Along with state flags of the Great White Tsar of Russia and the Chinese Republic, flags of many countries such as the USA, Sweden and Denmark could be seen around the capital of our country.

Since half of Mongolians were herding livestock and the other half were monks, no one was providing the nation with necessary goods. Nobody forbid Mongolian to engage in such works, but Mongolians themselves were not much interested in businesses. Trade and commerce were regarded as an inferior job, and Mongolians disdainfully regarded that “traders are one step away from becoming a thief” and “a spirited thief is better than a soulless merchant”. The “spirited thieves”, who stole livestock, were respected as noble outlaws and the real men. That is why only foreign traders provided Mongolia with three import goods they needed, namely, tea, tobacco and textiles. The traders also bought wool, fur and hides, which were plentiful, from Mongolia so a mutually beneficial business was flourishing. Out of 103,019 puu (1 puu16.3kg) of camel wool, 783,00 puu of cashmere, 979,512 puu of sheep wool transported from Mongolia to Tianjin in 1912 and 122,123 puu of camel wool, 43,231 puu of cashmere, 1,036,629 puu of sheep wool imported in 1913, the majority of camel wool was shipped to England and all of sheep wool went to the USA. Russia bought both wool and cashmere, as well as livestock. For instance, a total of 98,000 cattle were exported to Russian Empire in 1913, 67,700 in 1914 and 80,000 in 1915. “Non- Russian” phrases, such as Machinery Manual and “miles per hour”, shows that a part of Mongolian language remained as witnesses to the fact that technology was first introduced to these steppes from a different place.

Century-old doctrine of condemning foreign investors for potential exploitation is reviving

As such, Mongolia forged relations with the rest of the world, becoming a part of the changing world. In present terms, it was, to a certain degree, a globalization and with each passing days, Mongolia was shaping into a typical independent state with diplomacy of that time. However, the Soviets, who set up their total control upon the Mongolian government by mid-twenties, started a war against foreign capitals in Mongolia. That was the beginning of the first war against foreign investment. Let us see from the history how Soviets wrote about it in their “made up” story for Mongolians. In the history of revolution, it is mentioned that ”…in addition to the oppression over Mongolians, Western Europe and American capitalists conspired with greedy China to rob the country”. Is it not a familiar slogan? It reminds me of slogans against present Oyu Tolgoi, Tavan Tolgoi and Boroo Gold. Both state and civil movements against foreign investors have spread out.

At first, they forbid investors from hanging up their national flags, then froze their bank accounts and lastly, expelled the owners from the country. The last foreign investor left the country in 1928. Just like the phrase “there is no other God than Allah”, only the Soviet economy dominated Mongolia after that. A day later, private properties of Mongolians themselves were confiscated and nationalized under the excuse of “confiscating assets of feudal lords”. If Larson’s property had been confiscated, it might have led to a dispute between Russia and Sweden or Russia and America, which would have delay the exertion of robbing resources off of Mongolia. If the herds of Danish farmers had been given to collective farms, it might have led to a quarrel between Russia and Scandinavian countries and would ultimately make it difficult to take livestock from Mongolia. However, such problems were avoided by conducting a campaign on “chasing away foreign investors” by the hands of Mongolians. That was the beginning of a Red terror against the Mongolian economy and the Mongolian people. As a result, Mongolia lost all of their private properties, a strict limitation was imposed on small amount of properties one could own and one in every five adult males was killed.

THE SECOND WAR AGAINST THE WEST

A decade before the end of the 20th century, the socialist system collapsed on its own. Mongolia had an opportunity to regain their economic and political independence. In my personal view, main achievements of democracy in our country were that, first, the Government of Mongolia no longer had to ask another country to make a decision and, secondly, Mongolia’s economy was free from the control of a single country. In almost three decades into democracy, many foreign investors came to our country, which is making an effort to become a part of the globalized world and striving to reach the standards of modern independent state. Besides, numerous mineral deposits with rich resources were discovered throughout the country. Mongolians’ tradition of inviting skilled people to do the job that we are unable trails back to the ancient times. Households without a man to slaughter a sheep, used to ask their neighbors to do the job and cooked them a breast-bone or gave them the sheep’s leg as a reward afterwards. Aside from collecting dung and ruthlessly cutting wood, Mongolia had limited experience in energy production sphere; thus, the mining industry was established on the back of the Soviet investment in the 20th century.

• Soviets avoided potential disputes with Western countries through a campaign on "chasing away foreign investors" by the hands of Mongolians.

• Aside from collecting dung and ruthlessly cutting wood, Mongolia had limited experience in energy production sphere; thus, the mining industry was established on the back of the Soviet investment in the 20th century.

• The fact that the “hatred towards foreign capitals” excluded our two powerful neighbors seems suspicious.

However, in modern mining, it is inevitable that we cooperate with modern companies and give them the “breast-bone or leg”. Unfortunately, in recent years, the century-old doctrine of condemning foreign investors for potential exploitations is reviving and spreading further. There were rumors about books that detailed the methods of exploiting Mongolia’s economy. Some even cited from the book. Well, there are lots of different books. If these people read the Koran, they would probably say “it is written in the book that there are no other Gods than Allah” and destroy the Gandan temple and break the Megzedjanraiseg statue. An open window lets in fresh air, as well as flies. Since no one would want to suffocate in order to keep off flies, one would open the window and be ready with a fly-swatter. Since anybody can walk in through the open door of Mongolia, one needs to be vigilant and that is what the state is working for. Is the fact that the main objective of the war against foreign investors in Mongolia is directed at Western countries, specifically American and Canadian investors, a sign of history repeating itself? It feels like the fact that the “hatred towards foreign capitals” excluded our two powerful neighbors seems to be proving this point.

I am not saying it is wrong, I am just saying that this exclusion seems suspicious. Chinese companies account for the majority of foreign investments with Government approval set by a certain law on foreign investment. But how many companies with Chinese investment can you name? While there are a lot of general rhetorics about Chinese invasion and a danger of assimilation, do you know of any civil movement against 100 percent Chinese-invested companies or joint ventures? Do you at least know the names of Chinese companies that are using strategic deposits of iron ore, zinc or oil in our country? Have you ever heard about one person, let alone a movement, who protested against a Russian company called the Altan Dornod Mongolia, which dug out all the gold from the Zaamar mountain and then demanded USD 500 million from the state? Have you considered the reason why people are protecting Mongolia’s economy from Western investors and not holding a grudge against Chinese or Russian investors? Do you know the history of foreign investors in Mongolia getting expelled from the country as “exploiters”, so that only one foreign country could possess our country? Like it or not, but such questions are raised every time I think about topics such as “economic hit man” or “foreign exploitation” that are replacing the search for the assassin of Zorig Sanjaasuren.

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MPP caucus plucks out their chair: Speaker may be next

​Caucus calls board meeting once again as discussion on ousting Speaker may violate Constitution​

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Mongolian People’s Party (MPP) caucus in the Parliament held a meeting yesterday to discuss the board decisions, specifically the appointment of the next Minister of Food, Agriculture and Light Industry and ousting of Mayor of Ulaanbaatar Batbold Sundui and Head of MPP caucus Khayankhyarvaa Damdin, and approved both. The MPP board convened on Monday and the majority of members had agreed to dismiss Mayor Batbold Sundui and Speaker Enkhbold Miyegombo. The board went into a heated discussion over Small and Medium-sized Enterprise Development Fund sandal, during which potential ousting of Prime Minister Khurelsukh Ukhnaa and head of MPP caucus Khayankhyarvaa were brought up. Yesterday, the caucus approved the appointment of MP Ulaan Chultem as the Minister of Food, Agriculture and Light Industry regardless of the fact that MP Ulaan expressed to turn down the position before the meeting. Later on, the caucus held secret vote on ousting Khayankhyarvaa and ended in a 29:29 tie, which forced second ballot. After taking a break for 30 minutes, the caucus members proceeded with the second voting and approved the dismissal of Khayankhyarvaa with 32:27 vote. As for the ousting of Parliament Speaker Enkhbold, the caucus viewed that the discussion of the matter will violate the Constitution and called the MPP board meeting once again.

PETROLEUM PRICE TO DESCEND IN DECEMBER

Before the caucus meeting, Prime Minister Khurelsukh received public representatives of protest with vehicles at their request and heard their thoughts on petroleum price increase and other social issues. PM addressed, “There are many things Mongolia cannot control related to oil products, which is completely import-dependent. The Government is taking necessary actions to maintain petroleum price, such as annulling excise tax on petroleum. Artificially sustaining petroleum price by printing money will not have effects in the long term and can fundamentally harm the economy.”

• Caucus approves appointment of MP Ulaan Chultem as Minister of Food, Agriculture and Light Industry.

• Khayankhyarvaa Damdin ousted from Head of MPP caucus seat.

• The cheaper oil will be distributed in December, lowering petroleum price, says Minsiter of Finance Khurelbaatar Chimed.

Minister of Finance Khurelbaatar Chimed explained, “Oil price has been falling for several weeks; however, it will take time for petroleum price to decrease as oil importers collected their reserves for higher price. The cheaper oil will be distributed in December, lowering petroleum price. Key driver for price raise was the U.S sanction on Iran, which affected global oil price.” After the meeting, the demonstrators announced to call off the protest.

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MPP board approves to oust Mayor of UB Batbold Sundui

​MPP board appoints Ulaan Chultem as Minsiter of Food​

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Mongolian People’s Party (MPP) board held a meeting yesterday and decided to oust Mayor of Ulaanbaatar city and Governor of Capital City Batbold Sundui and approved the appointment of MP Ulaan Chultem as the Minister of Food, Agriculture and Light Industry. At the forum, Prime Minister announced that he will dismiss several key officials related to alleged MNT 60 billion sell-off of public service positions. Several policy makers, including Parliament Speaker Enkhbold Miyegombo, Mayor Batbold Sundui and Head of MPP caucus Khayankhyarvaa Damdin were reportedly related to the case. The case began during the 2016 Parliamentary elections when a voice recording of three high-profile officials of the MPP went viral on social media. In the recordings, more than 8,000 jobs in Mongolia’s government and stateowned enterprises were being offered by the MPP if they won the elections, in return for the money required for their campaign.

MPP caucus request Congress to be held within November 20

Majority of the MPP board members were in favor of ousting the Parliament Speaker and Mayor of Ulaanbaatar city. After the voting, MPP board decided to remove Mayor Batbold Sundui. The decision will be discussed by the Citizens’ Representative Khural soon. Respecting the decision, Mayor Batbold expressed that he is ready to dismiss from the position. Regarding the ministerial position opened after the ousting of Batzorig Batjargal, who got involved in the Small and Medium-sized Enterprise (SME) Development Fund scandal, the board of MPP agreed on appointing MP Ulaan Chultem. Additionally, Head of MPP caucus Khayankhyarvaa delivered a notice to Prime Minister on holding certain Parliament members involved in the SME Development Fund scandal accountable for. He demanded to dismiss those MPs if proven to have embezzled the loans received from the fund through non-banking financial institutions, which is currently under investigation, and hold the MPP Congress within November 20 to discharge MPP board members involved in the embezzlement. He further criticized the PM Khurelsukh for his attempt to dissolve the Parliament, deeming it irresponsible, and held discussion on ousting the PM.

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Second neighbor and her “enemies” Part-1

​Mongolia's independence remained intact as China survived tension with Soviets​

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PART ONE. FROM SINGLE NEIGHBOR TO SECOND NEIGHBOR

Rumors and slogans about China’s threat to Mongolia’s independence and their invasion are nothing new. History proves that one of our neighbors used others to install fear and threat to establish full political control over Mongolia. People’s Republic of China as we know of today got established in 1949. I believe it was called the 25th dynasty that was established in former Nangiad area. Continuing the policy of Chiang Kai-shek, who approved the independence of the People’s Republic of Mongolia, China established an embassy in Ulaanbaatar. As such, Mongolia, who made enemies with every country in 1928 and had no foreign partners except from the Soviet Union, expanded their foreign relations. Inherently, it is hard to call the relations dictated by the Soviet Union as a “foreign relation”. Because the Soviet Union’s law has went into force in Mongolia, which ultimately resulted in beheading of several people including the then head of state Genden Peljid and Prime Minister Amar Anand under the Soviet laws. Even in 1945, it was not Mongolians who initiated to expand foreign relations, instead the Soviet approved Ulaanbaatar to develop relations in the socialist camp within the Soviet zone. It simply means that the Soviets allowed Mongolia to have relations with Mao’s China, who decided to establish communism same as them. At the time, Choibalsan Khorloo signified the fact that China approved Mongolia’ independence in a perspective that Mongolia’s independence now has support from two countries instead of one.

Proving this point, Baabar wrote, “If China was not there, Mongolia would have faced the same fate as the Buryats. If the Soviet was not there, Mongolia would have faced the same fate as the Inner Mongolians.” Choibalsan, who understood the process as the actualization of Mongolia’s independence, widely celebrated the 1946 Naadam, marking the “25th anniversary of People’s Revolution”. He invited several high-profile guests from the Soviet and China, celebrating with the public and even personally participating in archery. Because the anniversary was truly the celebration for Mongolia’s independence and for Choibalsan’s group, it was the celebration for their GREAT STRUGGLE that sailed through the bloods of monks and royals… It was the celebration for our independence. Numerous evidence proves that the Marshal General Choibalsan gave great significance to the celebration and was very excited for it. However, he may have been troubled by many other things that did not go as he expected. Even the morning began with a misfortune. A picture of him scolding his successor Tsedenbal Yumjaa for being hungover after a long night of drinking was archived. He was planning to organize a parade like the one organized at the Red Square in 1945 and receive a report from a parade commander; however, General Mijid, who played the role of General Georgy Zhukov that handed out the report at Red Square, fell of his horse during the Parade.

Because he got humiliated in front of the public during an actual parade after becoming an “actual” country, the Marshal presumably chased after Mijid at dinner in an attempt to slash him with a sword. It got worse when a guest from Tuva Togoo Salchig brought up the issue of the remaining territory of Tuva. He slapped across the face of President of Tuva Togoo and chased him off. He did realize that Salchak Kalbakkhorekovich, officially known as Toka will sell him off to Kremlin. As such, he began disregarding Stalin since he accomplished his goal. He may have thought, “We did what the comintern told us, killing our friends and family just for this day. Enough is enough. Comintern happened already, we no longer need them.” He deemed it unnecessary to pay his respect to the great leader of the world revolution Joseph Stalin’s 70th birthday. Although his dream was fulfilled, his desire was far from over. Soviets, who predicted Choibalsan’s actions beforehand, already prepared a new leader for the Mongolian People's Republic since 1930. It is said that he was surprised when Moscow introduced the new prince of Mongolia Tsedenbal Yumjaa to him. Not only was he surprised, he was mortified to hear his new successor talk about dissolving the country and merging it with the Soviet Union, telling his partisan friend Bumantsend, “We have failed to prepare our new generation” in both anger and sorrow.

PART TWO. "FOE" FRIEND

Choibalsan, who made an assumption too early, got called to Moscow for a therapy and passed away on a surgery table in 1952 during a fasting on the eve of Mongolia’s traditional celebration of lunar month. It is strange how a marxist leader at the time Tsedenbal was better than Marshal when it comes to trusting Mao’s China. At his order, the Mongolian People's Republic dismantled border troops in 1950-1960, leaving the border unguarded. Hundreds of households migrated to Bayan-Ulgii aimag from Xinjiang as a result.

• Marshal General Choibalsan disregarded Stalin after accomplishing his goal.

• Tsedenbal was better than Marshal when it comes to trusting Mao’s China.

• An atrocious legacy from this period was the groundless hate towards China.

Tsedenbal may have thought integrating countries do not need borders as China’s adoption of communism means to join the Soviet Union. Maybe his thoughts did not play a part, instead it may have been the Soviets that told him so, or he understood it that way when they said something else. In response to Marshal Choibalsan’s caution towards China’s presumptuous migration, he explained that there is nothing to fear since they too were installing communism. The relations between the Soviet and China got tense shortly after. Chinese leader Mao Zedong started to express that although China was establishing communism, he is not someone who would serve Kremlin and be controlled by Moscow. As a matter of fact, three volumes on the history of Republic of Mongolia were published a few years apart in 1960’s. Ideologically distorted conclusions aside, it was the first modern scientific history ever published in the XX century. Not many people know about the Mongolia-Soviet-China science academies were planning to co-publish this history book. However, not to mention that the co-publishing was cancelled, the history book included hate towards the southern neighbor due to the tension. Initially, Chinese Prime Minister at the time Zhou Enlai, who negotiated with Tsedenbal on setting borders in 1962, once warned that a tension will rise with the relations with the Soviet, expressing that the relations between Mongolia and China should not have to tarnish because of it and that Mongolia can hold a neutral policy. At least the Mongolian side did not say “scram” in response. Because he had received a command to cut ties with Beijing from the north. Since then, he ended the cold war as a notorious hater of China, getting complimented by the Soviets.

PART THREE. "FRIEND" FOE

The loathsome rumors about Chinese invasion was surfaced at this exact moment. For the Republic of Mongolia, who cut ties with China, the Soviet was now the only ally. They no longer had the guts to defy their only partner. If they did, the Soviets would simply threaten China’s invasion. The public already had the fear that a “monster” will invade if they offended Soviets in any way, bearing everything the Soviets threw at them. A hideous condemnation of “tarnishing Mongolia-Soviet friendly relations” or “attempting to deteriorate” was added to the official sentence of the state. Many state or party figures were victimized because of it. An atrocious legacy from this period was the groundless hate towards China and practices of making everything right by simply taunting them and on the contrary, humiliating everyone who were logical towards the attitude as Chinese half-breed and/or spy. But the independence of the Mongolian People's Republic remained intact because China survived the tension between Zhongnanhai palace and Kremlin. Soviet-China relations began to improve since the mid-1980’s and Moscow made several attempts involving the Mongolian People's Republic to confirm their interest in strengthening ties with China. Due to the inability to understand the new international environment, Tsedenbal, who thought that “being against China will satisfy the Soviets”, was dragged into these attempts. It is said that, because of his old beliefs, he chased off Chinese people in Ulaanbaatar in 1983, tainting Beijing-Moscow relations, which was just beginning to improve.

Beijing immediately sent a messenger to Moscow (not Ulaanbaatar) and demanded them to refrain from two-faced friendship talks while threatening through Tsedenbal. After receiving the protest note from Beijing, Moscow sent a special mission to Ulaanbaatar. The mission consisted of newly appointed Ambassador Sergei Pavlov and new advisor from KGB Vsevolod Radchengo. Mr. Radchenko, in his book “главная профессия-Разведка” or “Main profession-Intelligence”, wrote about how “The whole procedure of removing Tsedenbal from his position and personnel changes in leadership were highly appreciated by political analysts and senior management, both in Ulaanbaatar and Moscow.” As such, Kremlin, in an attempt to set things straight with Beijing, ripped Tsedenbal from his authority in 1984 for offending China by chasing them off. With an aim to begin a new era of Soviet-China relations, the Soviets decided to withdraw 100,000 soldiers that were stationed in the Republic of Mongolia. According to the same old rules, everything was decided in Moscow and was informed to Mongolians afterwards. Some officials of the Mongolian People's Republic, who heard the news about removing Tsedenbal, were nervous to inform him. They heard about the news only when Mikhail Gorbachev made an announcement about the withdrawal of Russian troops in 1989. Mongolia had two neighbors once again after the mid-1980’s and managed to create third neighbors in connection to the collapse of global socialist system, dissolution of the Soviet Union and temporarily weakened monitoring of Kremlin.

Second part of the article will be published on November 19, Monday.

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Policy-makers warn mineral price drop in 2019

​Budget Stability Council suggests Govt to select small number of projects next year ​

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Bank of Mongolia has informed of a potential risk of weaker foreign trade conditions following a likely chance of slump in prices of Mongolia’s main export goods, namely copper, iron ore and coal. On the contrary, Mongolia's main import commodity, oil price is set to further increase in 2019. National Budget Stability Council explains that this could create unsatisfactory situation for budget revenue, which is the main risk for the economy. Davaasambuu Dalrai, Head of the council, warned that the lesser revenue will limit expenditure, ultimately obstructing planned projects. “In order to avoid potential risk of deadlock in multiple projects, the Government should choose a small number of reliable and necessary project,” suggested Mr. Davaasambuu. Ministry of Finance, on the other hand, determined price swing as the key potential risk in the budget revenue. For instance, the trade war between the U.S and China, the U.S sanction on Iran, economic crisis in Turkey and China’s policy on reducing iron production within the frame of reducing air pollution in Beijing caused instability in mineral prices since July.

Economist Enkhbayar Namjildorj remarked, “On the external side, the market demand of purchasing country, coupled with weak commodity prices remain are the key risks, while the internal risk is the domestic capabilities of developing the infrastructure.” The 2019 State Budget states to raise one-third of budget revenue from mining industry. Around 86 percent of mining revenue is expected to account for copper and coal exports. Specifically, balanced price of coal was estimated at USD 75.9 per ton and copper - USD 6,222 per ton. Additionally, the experts of International Monetary Fund, World Bank, National Reserve System of Australia and Bloomberg forecasted coal price to remain stable at 2018 level of USD 202 per ton. Amar Lkhagvasuren, Economics Officer at the Asian Development Bank Mongolia, highlighted, “Investments on Oyu Tolgoi is one of the key support for the economy. In the first half of this year, OT investments made up 12 percent of economic growth. Delay in schedule or obstruction of any kind will obviously have significant impact on the economy.”