Mongolian economy faces meltdown, not collapse
Recently, Venezuela’s currency, the bolivar, was in a free- fall and there were signs that the country faced an economic collapse. According to media reports, an acute shortage of goods, food in particular, has posed a great challenge to everyday life for Venezuelans. Lately, Mongolia’s currency, the tugrik, has also hit its weakest level in 23 years, having suffered a run of losses for over 20 days. The tugrik has fallen more than 11 percent against the US dollar this year, and media reports are speculating that Mongolia is set to be yet another nation on the brink of an economic meltdown.
I still remember a few years ago, when seeing stray dogs on the streets of Ulaanbaatar, some Mongolian friends said “there had never been a famine in our country, and as long as you catch sight of the stray dogs’ round tummies, you’ll understand that local people have eaten their fill.” This is a reminder that the nation, still powered by a nomadic animal husbandry- based economy, is quite different from Venezuela.
Mongolia’s economy might perhaps go into a meltdown, given that of the country’s registered businesses – totaling more than 130,000 – over 60,000 have shut down this year, and there’s even a rumor that the state can’t pay the salaries of more than 2,000 national athletes. However, the government doesn’t need to worry about whether people will be able to get enough food to eat. An economic collapse in Mongolia would result in many of the country’s enterprises closing down, a large number of factories discontinuing production, the circulation of goods losing steam, and urban consumption abruptly shrinking. Nonetheless, the traditional economy based on nomadic animal husbandry will basically be kept unchanged, guaranteeing that the nation’s food supplies maintained stable. The common sight of armed soldiers standing guard over supermarkets in an attempt to avoid food riots in Venezuela will not be seen in Mongolia.
Perhaps it’s precisely because hunger has yet to affect Mongolians , that some of the country’s politicians have launched election campaigns calling for patriotic strengthening against foreign investment, urging the public to stand up for the government’s move to restrain foreign investment in strategic industries like mining. The country passed a new foreign investment law in 2012, which caused foreign investment flows to plummet. For a country with the world’s largest reserves of coking coal who is unable to invest in its mining industry, and yet handcuffs foreign investment in the name of democratic politics, an economic decline is inevitable. Certainly, a smattering of the newly rich or traditionally wealthy in the country have no need to worry about a deterioration in their quality of life. Instead it will be the average person who sees their hard- earned money become worth less than a penny.
The Mongolian economy is only nearing a meltdown, rather than witnessing a complete collapse. This is because for a country with a traditional nomadic animal husbandry- based economy playing a primary role in the nation, it’s imaginable that the majority of people would return to a pure natural economy. That might rather enhance the national consciousness of the Mongolian people who regard themselves as being unique, and perhaps lends a hand to extreme nationalism. In the eyes of most Chinese, the world would descend into chaos if necessities of modern life such as computers, cell phones, supermarkets, subways and airplanes were unavailable. But for a country of less than 3 million living on 1.56 million square kilometers, a nomadic way of life is wholly acceptable. Therefore, those who expect the Mongolia people to be mired in a deplorable situation are likely to be disproven.
At the Mongolian Economic Forum 2016 in late March, Mongolian President Tsakhiagiin Elbegdorj admitted that the country’s current difficulties “have been caused by political impacts, and that there is no discipline among Mongolian politicians,” and the country “is facing many problems due to poor responsibilities of the politicians, and lack of willingness to normalize the economy,” according to Montsame, the Mongolian national news agency. Certain Mongolian populist politicians who originally vowed to serve the national interests, only succeeded in making themselves wealthy. In this regard, a country’s development mode and choice of political system should be determined by its people, rather than a manipulated political election under the disguise of democracy. Often, political elections in Mongolia and Venezuela do not reflect the people’s demand and appeal.
Lastly, Chinese sometimes value its relationships with neighbors even more than with their relatives, and this also applies to Mongolia. In recent years, senior Mongolian officials, including the Mongolian President and Prime Minister, have successively visited China, which indicates that Mongolia faces a tough situation in economic development and that the Mongolian people have a new understanding about democratic politics over decades of practice. The highlight of Mongolia’s 2016 election this June was the changes to the country’s election laws that included rejecting the party list system, as such a system “violated citizens’ rights to directly elect their representatives,” according to the Asia Foundation, a nonprofit international development organization. The change in the system suggests that Mongolians are tired of the fights between political parties and losing faith in their promises. We hope the country’s new leader will be courageous enough to face the reality, as it will help to fix unfair trade practices between China and Mongolia, and will foster future trade relations. s Such deeds will also serve to assist Mongolia’s economy to bottom out and return to normal.