Baabar on curse of natural resources or Oyu Tolgoi

Mar 25 • Mining, News, Opinion, Politics, State Affairs • 4026 Views • 1 Comment on Baabar on curse of natural resources or Oyu Tolgoi

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Mr.B.Batbayar is probably the most influential publicist in Mongolia who publishes his essays weekly on daily newspapers and news portals. Former Minister for Finance, author of the most famous Mongolian history book that has been awarded by the state, is keen on criticizing the backwardness of Mongolian society.

His recent essay addressed natural resource curse. The essay argues that too much blind jealousy and distrust leads to missed opportunities of exploiting greatest natural resources and technological advancement. The essay coincides with the time of Rio Tinto and Government of Mongolia dispute over Oyu Tolgoi.

He takes two cases of his own analysis as main examples. The first one is Russian Emperor Nicholas I’s foreign and domestic policy as a preventer of the revolutionary wave from Europe in the end of 1840’s and a guardian of autocratic ruling. The second one is that of a small village crossed by silk road located in Mongolia.

His analysis is that the Nicholas I had missed the opportunity to industrialize Russia as Western Europe due to his closed, strict policies to prevent foreign forces to meddle with the state affair. Thus, he had missed to be the part of industrial revolution. Moreover, he missed the opportunity of exploiting natural resources in Siberia and make Russia rich.

The other example states that the small village that had unusual traders’ traffic in the times of silk road and had accumulated significant amount of precious metals and jewelry for services to the traders which is uncommon in nomadic society. Thus, they started engaging in inter-family marriages to guard their wealth. Later, before 1990’s, a government study showed that the village had an unusual rate of mental illness due to genetic diseases. His analysis is that the above examples prove the other side of natural resource curse.

There are a lot of comments in the comment section. Some praise him for writing the truth, and some accuse him of being sided with the western propaganda. Some of the comments even accuse him of spying and spreading capitalist exploitation ideas.

It is a bold statement for Mr. Baabar as he is not involved in the day to day operations of the project. We are aware of some politicians’ populist promises impossible to be realized. However, the discussion being held between the two shareholders is not about getting higher stakes, nationalizing the deposit or closing the mine.

We would like to reiterate that the government is trying to be more involved in the project’s economics and operational activities as as a rightful shareholder of the project. If you cannot explain the cost overruns, on the fly development of the mine – failure to submit the updated feasibility study (the feasibility study which OT LLC currently spending funds and developing the mine)to the authorities, gaps in the ESIA to the international NGOs, and solve other outstanding issues, it is not acceptable by the Mongolian law. Hence, the Mongolian expression – born under the sky, live under the law.

Mongolia is an example democracy to many countries. It has free press and every person has a right to express one’s opinion. The parliament (SGK) also has a freedom of discussing state’s high-level matters openly. If the foreign investors are not ready for that level of transparency, perhaps they underestimated the development of democratic governance of the country.

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One Response to Baabar on curse of natural resources or Oyu Tolgoi

  1. John Case says:

    Thank you for your useful article. I have been paying a close attention to Mongolia in a recent years, although I didn’t really have a good chance to invest in Mongolia. Perhaps I was less informed and foreign investment climate was a bit harsh lately.

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