This post was written by Byambabaatar Ichinkhorloo, a member of the Emerging Subjects project and a doctoral candidate in anthropology at the National University of Mongolia.

This year, ‘Discover Mongolia’, the 13th Annual International Mining Investors Forum, was held on September 3-4, in Ulaanbaatar. The conference was organized under the sub-theme, ‘Mining Without Populism’. The keynote speakers of the conference claimed that the fundamental issues that have hindered the development of mining in Mongolia are populism, investment decline, and state intervention in business freedom. The conference is organized annually by ‘Prime Info’, a subsidiary company of Mongolian Investment Holding Group, and the Mongolian National Mining Association since 2002 and has become the platform for mining companies to attract investment and discuss urgent issues with the government of Mongolia.

The conference, as highlighted by former president P. Ochirbat in his opening remarks, collected more participants than the previous year. Over 70 different organizations registered in the conference and the conference hall was full in the morning half, especially during the first three sessions, which included sessions entitled: ‘keynote speeches’, ‘government hour’, and ‘business freedom in the mining sector’.  However, the number of participants decreased significantly in the following sessions and on the second day. Many of the participants, it seemed, expected the Prime Minister and other high officials to speak during the morning half, especially during the government hour. But two cabinet members Mr. Jigjid, Minister of Mining gave short opening remarks, and Mr. Enkhsaikhan, Minister in charge for mega projects, attended the first session, while during the government hour people from the department and division heads level presented.

Before discussing the conference and the investor and mining company’s perceptions about the current conditions of Mongolian mining, let me briefly discuss what has happened in Mongolia and the extractive sector in the past few years.

Mongolia suffered a sharp decline in foreign direct investment  (FDI) in the extractive sector from MNT 5.2 trillion in 2011 to MNT 0.8 trillion in 2014 (due to Oyu Tolgoi mine start up in 2010 and suspension of OT underground mine in 2013), according to Mongolian Statistical Office. The World Bank estimates that foreign direct investment in Mongolia declined from US$ 4.7 billion in 2011 to US$ 2.1 billion in 2013.

So investment in-flow has declined, and its effects on the Mongolian economy and politics have fueled many economic and political debates in Mongolia, with some suggesting Mongolia should receive IMF Stand-By arrangements, while others, including Ts. Elbegdorj, President of Mongolia, have urged an increase in debt to GDP ratio up to 80% and to reach an agreement with Consortiums of Investors on Tavan Tolgoi coking coal mine and Rio Tinto on Oyu Tolgoi mine. Mongolian authorities have not been unanimous on raising necessary funds for development of mining infrastructure while arguing about railway track gauge and other mega projects through additional loan and bonds that might fill the investment shortages.

Even the government foreign debt issues have affected public opinion  and created fear among the population, producing lively debates among social media based movements. So after months of debate, the parliament passed the government’s submitted laws related to debt management and fiscal stability and agreed to keep a debt to GDP ratio of up to 58.3% in 2015, 55% in 2016 and 50% in 2017 and 40% in 2018 and beyond.

As investment declines and the economy slows in Mongolia, there has been a rush to place blame on environmental movements that lobbied and supported the law with long name since 2009 (Law on Prohibiting Mineral Exploration and Extraction Near Water Sources, Protected Areas and Forests), which abandoned 488 mining licenses in water sources, protected area, and forests. Gold mining companies claimed compensation of MNT 202 billion from the government and later on moved against environmental movements especially targeting Ongi river movements through mass media while promising to increase foreign investments and Mongolia’s gold reserves.

After suspending the provision of new licenses for 5 years, the government began to issue exploration licenses through an online application system, based on priority rights in eastern and western Mongolia, from January 2015. This was one of the urgent issues that attracted the interest of many of the participants during the ‘government hour’ at the conference. According to the Ministry of Mining, the government is planning to provide 3000 exploration licenses in 30 million hectare lands and will keep all licensed area within 30% of Mongolian territory.

At the end of the conference, it became increasingly clear to us that many foreign mining companies and service providers are still positive about the future of the Mongolian extractive sector.  Chris MacDougall, from Mongolian Investment Banking Group, presented some of what he saw as the positive changes taking place in Mongolia, including the Foreign Investment Law, New Securities Law, Minerals law amendment, Tax Amnesty, OT Underground mining investment resolution and arrival of new Prime Minister Saikhanbileg in the past two years. “These changes made in the past two years are tremendous success of Mongolian government compared to previous ten years” stressed by Erdenes Mongol LLC.

Many participants also agreed that the failure to attract investors in mining projects has arisen due to the propagation of a  bad image of Mongolia by outsiders that has scared new investors away from Mongolia.  Panelists of the ‘business freedom’ session discussed how much Mongolia-related media is not transparent or clear or even true, and relevant institutions and agencies need to check for clarity. These insights were also reiterated in the presentations by Rio Tinto, Xanadu Mines, Aspire Mining, Erdenes Mongol companies. They asserted that Mongolia is open for business even though there are minor issues to be resolved, such as improving the business environment, transparency, and attracting Mongolia-specific investors.

Many participants expected more investment opportunity in the mining and mining subsidiary services, thanks to larger mining developments including OT underground agreement between Rio Tinto and Government of Mongolia and the soon-to-be expected Tavan Tolgoi agreement. As Minister Enkhsaikhan said at the conference, ‘the success of Tavan Tolgoi approval is around 10% even though it was 50% : 50% when it was submitted to the parliamentary approval’.

Enkhsaikhan and two other presenters highlighted the lost opportunities in relation to global commodity price cycles, and focused on how the Mongolian political cycles lost opportunities derived from global commodity cycles. It is true that many mining companies and development agencies are aware of the election-driven idle political period and try to reach agreements before election years. Many politicians and decision-makers became hesitant during election years and are slow to make any firm decisions that might affect his or her political reputations or election campaign. This in-activity reduces the number of new investments or or projects starting in election years.

In sum, there were two major tendencies among participants in the Discover Mongolia conference. One was to be cautious and pessimistic about the future of extractive industries in Mongolia and encourage laissez-faire or less government intervention in the mining sector, while securing more business freedom without any populism. Others, and often strongly  expressed by private companies,  saw the future of the Mongolian extractive sector in a more positive light, while seeking more secure investment and recommending the government of Mongolia to sell its bright news to the world, rather than focus on internal populist disputes.

 

 

This post was written by Terbish Bayartsetseg, a lecturer of Social Work at the School of Arts and Sciences at the National University of Mongolia.  Bayartsetseg has been involved in a range of projects relating to community development practices.  She is an affiliate researcher on the Emerging Subjects project and is a paired researcher to Rebekah Plueckhahn.

 

Urbanization and expansion of ger districts in Ulaanbaatar

Sedentary culture as we now know it in Mongolia began quite recently. Scholars who have studied urbanization in Mongolia agree that this began in the second half of the 20^th century.[1] Other scholars refer to the 1700s or the times of the Ikh Khuree when discussing people shifting from nomadism to settlement living in Mongolia.[2] By 1960, it was reported that construction developments in Ulaanbaatar city attracted rural populations like “a magnet”[3] because of Ulaanbaatar’s employment, business, and commercial opportunities. Urbanization processes were exacerbated by the 1990 democratic movement and transition from socialism to a market economy in Mongolia. Furthermore, the first democratic Constitution of Mongolia of 1992 entitled its citizens to freely move, settle in and change the residential destination within its territory. By 2015, the population of Ulaanbaatar rose to 1.37 million, where approximately 64.2% of Mongolia’s total population[4] now resides in the capital.[5] More disaggregated data by tenancy shows that, by 2014, nearly 60% of the urban population reside in ger districts due to the increasing costs of apartment options.[6] Today, ger districts exist in all nine districts of Ulaanbaatar with particular growth over the hills and hollow valleys in Sukhbaatar, Chingeltei, Songinokhairkhan and Bayanzurkh districts.

 

As one of the oldest types of residence in the world, a ger is a traditional dwelling used by Mongolian people from early times until today.  It is constructed with a combination of poles and felt, which can be easily collapsed and built up again within an hour or two. Until 1920, gers have been primary sources of housing for nomads and are used today as an alternative to wooden houses.[7] Mongolians live in gers all through the year, by adding the number of felt covers surrounding it during the coldest months. Residents of the ger districts have mostly relocated to the city seeking employment opportunities and hoping for access to better education for themselves and their children. Due to the growing urban population, the current local educational institutions as well as health clinics are outnumbered, and resources are stretched, presenting problems for the government.

 

Ger District Sections and Current Planning Initiatives

The ger districts are divided into three sections: central, middle and peripheral.[8] As indicated in Figure 1, middle and peripheral areas of settlement covers vast areas in Ulaanbaatar.  These districts are located in territories where connections to heating and waste disposal engineering schemes are not available. Thus, the Government has strategically planned to implement more cottage structures in the middle ger areas and shift peripheral ger districts to private housing schemes by 2030. Central ger districts are those located closer to apartment districts and are under an initial assessment for further infrastructural re-development. Some twelve target areas were assessed for needs, and construction work to shift ger settlements into apartment options is ongoing.[9]

 

Exploring social exclusion in ger districts

Efforts towards increasing citizen participation at all levels has been proclaimed in Mongolia in several key strategic documents, including Direct Democracy and Public Participation.[10] However, people in peripheral urban areas have often been left out of the loop. Households in isolated ger districts are predominantly migrants from rural provinces who face social exclusion from services as well as social relationships at some level. This is the conclusion reached through a recent feasibility study myself and several research assistants conducted in April 2014 in the peripheral ger districts of Chingeltei and Songinokhairkhan in Ulaanbaatar. This survey, funded by the Central Asia Research and Training Initiative (CARTI), covered 80 households and 10 unit leaders.[11]

Searching through literature on social exclusion, social angles of social exclusion have often been given a low priority in exclusion studies. Urbanization is rapidly taking place in Mongolia, where local residents are affected by environmental and social issues. Primary studies of ger districts in Mongolia have described characteristics of growing urbanization and poor socio-economic conditions. However, these studies have lacked an in-depth perspective on the accessibility of social services and existing social relations that allow or hinder community changes. Conducting this study helped to fill this knowledge gap. The findings of this research can help to raise awareness about exclusion, and increase the role of community work in the ger districts.

 

In general, social exclusion is a multidimensional phenomenon and there are numerous definitions that explain it from differing angles. From the social point of view, an individual is socially excluded if he or she does not participate in certain key activities to a reasonable degree over time in his/her surrounding, and (a) this is for reasons beyond his/her control, even if (b) he or she would like to participate.[12]

We took ideas from what was typically used in other social exclusion studies, as well as developing several “local” questions. These focused on service accessibility issues such as access to public transportation, emergency facilities, land privatization services, as well as access to information in connection to the residential address system. Below are some results of the survey that explores social exclusion that households in target ger districts face:

1. Local residents are excluded from mainstream society due to a limited accessibility and availability of public transportation services to peripheral areas.

A lack of availability and limited accessibility to local transportation services is one of the most highly debated topics when it comes to suburban Ulaanbaatar. Thus, a question of public transportation accessibility and availability was asked as an indicator to measure exclusion from services. Comparatively few households own private cars and public transportation is used on a daily basis as a main means of transportation. However, people have to walk about 500m to 1km through fairly complicated, unpaved pedestrain roads to reach to the closest bus stops. These unpaved roads get muddy after rain, icy in winter and are hilly. Plus, they lack adequate street lights after dark. The availability of public transport is also a problem.  For example, only one bus has been serving Takhilt area of Songinokhairkhan district with a 50-60 minute interval between buses. In addition to the difficulty accessing the bus station, there is no running water in the ger districts. Almost 50% of participants complained about walking far to carry water from wells through unpaved roads which are also hilly, muddy and icy.

It was striking to know that 84.8% of survey participants would reach the nearest point of medical emergency assistance by walking about 500m to 1km. When it comes to medical emergency situations, this distance is quite far for people who are dependent primarily on public transportation.

2. Community members’ have limited access to bank credit due to complexity in owning land.

Despite the existing legal environment, roughly half of ger residents in all nine districts of Ulaanbaatar have no official ownership of their plot of land. This stops them from using their land as collateral to gain bank credit.[13] As reported by the Government of Mongolia, by 2013 about 11.8% of the total population and only 7.5% of Ulaanbaatar residents have had their land privatized for their personal as well as for family use since the approval of the first Land Law in 2002. The reason behind this slowness is two-fold, from both the supply side and the demand side. Firstly, many respondents undervalued private land and were not aware of the official procedures for ownership approval that they need to follow, or said they would follow it once forced by a government official (personal communications with ger residents, 2014). Secondly, it is also due to a lack of government policy and programmes that promote ownership of land and the incentives to own it. Owning land and having access to bank credit is particularly challenging for migrant households who have not gained city residency permits and who are not adequately knowledgeable about the paperwork processes they are required to follow.  Additionally, apartment prices have skyrocketed and are limited to only those who can afford to rent apartments or afford purchase prices.

3. Accessibility is limited by territorial disorganization and a poorly developed address system

Due to unclear community boundaries coupled with a poorly developed address system, residents in isolated ger districts miss regular information and the visits by unit leaders. It was claimed by some unit leaders that they accidently find a household registered at the first street in the third street, which complicates their weekly visit for the dissemination of information, as well as proper statistics of people’s residency. Public officers such as social workers and unit leaders blame local residents for being passive – about not raising the issue of an incomplete or duplicated address system to the local administration. They generally stereotype them for being ignorant of ways to improve their living environment, and describe them as lazy and dependent on the state.  On the contrary, local residents blame the Government for being inattentive and not improving the organization of communities. Ultimately, such a contradictory reciprocal situation creates an atmosphere where “everyone is to blame, but no one is responsible” in the process of ger district development.

4. Residents need institutions to advocate for them, so their voices are heard by decision makers and so they can participate in public events for community improvement.

Non-governmental organizations (NGOs) are key institutions in supporting residents living in isolated areas and assisting in making sure their voices are heard by decision makers. In social exclusion studies, a lack of NGO activities in respective areas and lack of opportunity for local residents to participate in NGO initiatives are used as an indicator for social exclusion. In this study, we asked about peoples’ awareness of local NGOs and about peoples’ participation in NGO activities.  About 74.1% of survey participants responded that they did not know of a single NGO. Additionally, 72% of participants had never participated in an event organized by a NGO even though they do not see any barriers limiting their participation. In general, it is certainly a challenge to obtain information on civil society organizations functioning in Mongolia and, thus far, we have limited information of their collaborations and joint struggles due to a weak cooperation between state and civil society organizations. It is estimated that there are nearly 16,000 officially registered NGOs in Mongolia, but only a number of these NGOs work to support migrant households in Ulaanbaatar in accessing better public services such as health, education and employment.[14]

 

Bayartsetseg’s contact email is: bayartsetsegt@gmail.com

 

References

[1] Gantulga, 2010; Narantuya, 2010; Byambadorj, 2011.

[2] Munkhjargal, 2006.

[3] Narantuya, 2010.

[4] The total population of Mongolia is 3,022,685 as of the latest data available in 2015. Population of Ulaanbaatar city is about 1,372,042, which is a little over the half of total population. The information was retrieved and updated from www.1212.mn on November 2014.

[5] Ulaanbaatar Statistics Office, 2015.

[6] Information was retrieved from Ulaanbaatar City Statistics Office website at www.ubstats.mn.

[7] Munkhjargal, 2006.

[8] City Mayors’ Office, 2014.

[9] Personal communication with Mr. Enkhbaatar, specialist at the Ger Area Development Bureau, 2015.

[10] The Presidents’ Office (2013).  Direct Democracy and Public Participation. Second edition. Ulaanbaatar

[11] Unit leaders – reach-out officers representing government deals – have been the main connector and facilitator of community actions at most occasions. Each district is divided into sub divisions (khoroos) and sub divisions are divided into units/plots (kheseg). Each kheseg or units have a designated unit leader who is responsible for disseminating information and collecting primary data for social workers by visiting door to door throughout his/her designated unit.

[12] Burchardt, 2000.

[13] MCC, 2013.

[14] Personal communication with Ms. Erdenesuvd, NGO representative, 2014.