Mining fuels Mongolia's 'wolf economy'

The young democracy of Mongolia is finally tapping into its vast mineral resource deposits, which in turn is fueling its growing 'wolf economy'.  Compared to the Asian tiger economies of the 1980s, Mongolia's goal is to use its resource wealth for long-term socioeconomic growth and is committed to avoid the natural resource trap.  In any event, Mongolia is facing huge opportunities and huge challenges.  With massive deposits of copper, coal, iron, uranium, gold, zinc, and most likely oil, over $25 billion in investment from both domestic and foreign mining companies is expected to be raised within the next 5 years.  Managing that wealth will not be easy, however.  With a population of 2.5 million in a vast, mostly desolate nation, where a nomadic lifestyle is still prevalent, establishing necessary infrastructure will be difficult.  The main long-term investments proposed by Prime Minister Batbold are health care, education, housing, and the job market.  There will also be an effort to diminish the effects of alcoholism, a growing problem for Mongolia.  The management of resource wealth to solve these problems is crucial, so PM Batbold looks to Chile, Canada and Norway as examples of resource-rich democracies that have avoided the resource curse.  In addition to dealing with this economic boom domestically, Mongolia must also maintain good foreign relations.  President Elbegdorj describes his nation as "a little pony between two big elephants" - China and Russia.  Landlocked between two of the largest developing states, Mongolia must maintain good political and economic ties with both, particularly with China, which serves as its largest market and link to the Pacific.  In an effort to not become over-dependent on China, Mongolia is strengthening relations with the US, Canada, Japan, Russia and Turkey.  The socioeconomic future of Mongolia seems largely positive, thanks to the committed efforts of its politicians to focus on long-term investment and avoid corruption.

Mark Zajac