Mongolia’s Balancing Act

As most people, who are even remotely connected to Mongolia know, the much publicised (and long overdue) Mongolian economic boom is set to start in earnest. World analysts have now jumped in and tried to predict the shape of things to come.

Mr. MacNamara, a journalist from the Financial Times has recently written an article about Mongolia’s third neighbour policy, while today the news about Mongolia seems to be all about the pre-IPO road-show of South Gobi Energy trying to raise $400m in HK for its Mongolia projects. Before that it was the agreement between Areva and Mitsubishi to develop Uranium deposits in Mongolia together. Not a week goes by that Mongolia does not make the international business headlines with a new deal or story about its upcoming growth, it is clear that the world medias are slowly catching up to the Mongolia story but where is that story heading?

Principally, it seems that the main questions asked by analysts are:
-How will Mongolia juggle its appetite for foreign investments while maintaining national and political integrity?
-How will Mongolia play its formidable neighbours to its advantage yet retain a real independence from both?
-Will the much flaunted third neighbor policy work and be efficient or is it merely an elaborate trap for foreign investors?

While the Mongolian economy and its democratic movement are notoriously wild and unpredictable, all the signs seem to point towards a real desire from the political class to move in the right direction. All the ingredients for Mongolia to become this decade’s success story are  present, now it is simply a case of blending the right mix of ingredients together to obtain a performing economy. This is actually a lot trickier than it sounds. Thankfully, Mongolia is still a functioning democracy and its elected representatives are still answerable to the people of  Mongolia, if only through a system of fair elections and a generally free press.

The will to move in the right direction is clearly demonstrated by the new generation of Mongolia’s politicians who are fast becoming a formidable force, Mr. Zorig, the minister for Mineral Resources, has already accomplished much; he not only achieved the completion of the OT agreement but he has also restored Mongolia’s tainted reputation with Foreign Investors.

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