Avoiding the “resource curse” in Mongolia

It is always interesting to read on resource curse cases.

Here is another such case on Mongolia by Theodore H. Moran of PIIE.

Mongolia is a parched, landlocked, and sparsely populated nation of nomads and few roads and railways. Located in north central Asia, the country is on the verge of an economic boom as
foreign investors extract and exploit its rich deposits of natural resources, among them copper, gold, and coal. But the onset of a mining boom in Mongolia has also generated widespread concerns about the potential damage to traditional agriculture and the environment, the lack of infrastructure and water resources, and the dangers of increased economic inequality, inflation, fiscal instability, corruption, and lack of transparency.

The reelection of President Tsakhiagiin Elbegdorj on June  26, 2013 provides an opportunity to reassess how the country has fared in dealing with the mining boom and identify the best
policy options to avoid the “resource curse,” which has caused more harm than good in other countries seeking to use mineral revenues to provide economic and social benefi ts to their citizens. To the outside observer, evidence suggests that Mongolia has been making progress on many fronts in managing the complex process of foreign investment–led mineral development. But challenges remain—from health and environmental issues to reducing inequality, ensuring transparency, and battling corruption. Of key importance is managing contractual relations with current and future international resource companies. 

Th is Policy Brief surveys how Mongolia’s recent accomplishments appear to those abroad and investigates the most important considerations for President Elbegdorj as he begins
his second term in Ulan Bator. 

Politics matters more than anything else..

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