Don't quarry, be happy: mongolia's resource curse

Politics 
Bea Gilbert

The concept of the ‘paradox of plenty’ is nothing new to social scientists. Natural resource wealth can destabilize the progress of development. It has long purged economically disadvantaged countries. A short gloss over history illustrates the phenomenon: from the diamonds of Sierrra Leone, to the oil of Venezuela, and the ivory of Tanzania.
 
Reserves of diamonds, gold and rubber across much of Sub Saharan Africa have accounted for decades of unspeakable violence, brutality and misery.
 
Stripped of any kind of agency, the vast majority of these battered and bruised countries have struggled to neutralize the damage.
 
The Resource Curse
Resource rich countries display a greater proclivity to slower growth than others not so graced with bountiful minerals, fossil fuels and other commodities. Political instability and public works corruption often follows the booms after prospectors discover resources in underdeveloped economies. Alongside internal contradictions, a lack of innovation and entrepreneurship is endemic as ownership transfers overseas or is centralised in corrupt government extraction and exploration departments. Rentier states derives all or a substantial portion of their national revenues from the rent of indigenous resources to external clients. This theory was first postulated by Hossein Mahdavy in 1970. For instance, the discovery of oil in Angola led to civil wars and conflict. In Zimbabwe, 15 billion dollars generated from diamond extraction, was looted off the state coffers by top officials.
 
The ‘resource curse’ may not only imply external threats, but also disrupt and destroy internal infrastructure. In the case of Mexico, for instance, roaring global avocado demand has fostered wide deforestation. The growing use of pesticides has polluted fresh water supplies.
 
For Brazil, richness in commodity resources, including cocoa beans and oil, has done little to lift the standard of living, let alone alleviate widespread poverty. Instead, the country has invested resources and expertise in these sectors at the expense of others.
 
Venezuela, as the most oil-rich nation on earth, saw demand for refined crude oil ruin the economic welfare of a prosperous country. An original founding member of the ‘Organisation of the Petroleum Exporting Countries’ (OPEC) in September 1960, alongside the Islamic states of Iraq, Kuwait, Republic of Iran and Saudi Arabia.
 
Oil has long been the mainstay of the Venezuelan economy. A string of socialist presidents failed to provide the socioeconomic stability from the influx of petrodollars marred with corruption and bribery. The demand for the Venezuelan bolívar rose, leading to an appreciation against other trading partners’ currencies on the foreign-exchange markets. This appreciation made the prices of other commodities uncompetitive on the world markets. As time passed, the oil sector grew in prominence and importance, while other industries and agriculture faded away.
 
Mongolia: The Lost Continent
But what of the harm to native culture? There is very little coverage on this matter, despite its unconcealed ties with other forms of damage.
 
In Mongolia, the mineral mining industry accounts for a disproportionate 95% of all exports from the country, with an 84% lion’s share consumed by neighbouring China.
 
Chinese demand is so vital to the health of the Mongolian economy, that internal measures attempting to regulate the mining industry were scrapped under pressure to maintain their favourable relationship. Furthermore, the concessions and tax-cuts offered to incentivise private foreign direct investment and the majority of mines being privately owned, ensures only a small proportion of profits passes to central government for redistribution. Yet for Mongolia -which has deep, intrinsic cultural ties to its landscape – the mining also represents a dig at the backbone of its heritage.
 
Perhaps the most significant of these is the prevalence of nomadic lifestyle. For a quarter of Mongolians, the immense steppes over which they are scattered embody not only a means of survival, but signify continuity of a profoundly traditional way of living.
 
Hundreds of thousands of people maintain the same style of subsistence that has existed throughout the centuries, if not a millennium. Horse riding, traditional sports, and an almost total reliance on livestock characterize the pillars of their existence. Survival aside, the gaping, expansive landscape has imprinted on Mongolian culture in a manner tangible in almost every corner of ordinary life. Perhaps the only change over a huge length of time has been the minor introduction of solar technology.
 
The stamina required to survive in such unforgiving plains has been a ballast of pride since the time of Genghis Khan. Strength of character, especially in masculinity, is highly prized.
 
Traditional dress reflects on adaptation to extreme weather. Old and modern popular songs alike, often lyrically revolve around horses, plentiful land and the striking Altai mountains or Gobi desert. Even in the chaotic capital Ulaanbaatar – a grey and car-choked contradiction between Soviet encroachment and a disorganized lunge at modernism – a profound respect lingers for nomadic peers.
 
Tourism in the country is resolutely centred on this wild and historic culture. But the mining industry has begun to gnaw at its foundations. The discovery of coal, copper and gold, amongst other less monetarily significant minerals, has fuelled a manic mining expansion in the last two decades. In the South Gobi region, the Oyu Tolgoi operation has been named ‘the biggest mining exploration project in the world’. The south-west Bayanhongor province has been flagged for similar action. In places such as Zaamar, a small town in central Mongolia, crowds have flocked in attempts to illegally gather whatever gold they can.
 
The ripping and scarification of this treasured landscape does not uniquely disgrace and damage nomadic culture in the immediate sense. Inevitably, the mines also wolf water resources, create dirty air and threaten animal welfare. Combined, these pose a serious threat to the sustainable future of nomadic culture- as if such a fringe existence were not already a testament to the durability and hardiness of mankind.
 
If mining manages to give Mongolia the swift and dramatic economic boost expected, there is some hope the government may be able to gain the financial autonomy to better protect itself from environmentally invasive foreign demand. Tighter control over resource extraction could potentially equip the country with the means to maintain growth, whilst simultaneously buffering risks to natural and cultural heritage. Conversely, centuries of environmental protection may be unravelled, if the pursuit of wealth is deemed more worthwhile than conservation.
 
There are lofty expectations for newly-fledged industry in Mongolia to flourish, securing its place as a serious economy and contender for world trade. However, even if it is successful and does not fall victim to manipulation, environmental harm or other ills; what price does it pay? In cultural terms, it risks swiftly evolving into a fresh-faced victim of the ‘resource curse’.

Bea Gilbert is a third year Politics and Economics student at the University of Manchester.