Resources, Sovereignty, and Governance: Can Mongolia Avoid the ‘Resource Curse’?

Abstract

The revenue generated from Mongolia's natural resources has the potential to transform the Mongolian state and society. Indeed, investment in mining has already led to a spate of urban growth in Ulaanbaatar and rural development throughout the rest of the country. Yet Mongolia's natural resources could also contribute to a 'natural resource curse' if not properly managed. Effective governance in relation to the state's natural resource sector is, therefore, essential. This article examines Mongolia's sovereignty in order to determine whether or not the state is capable of 'good governance' in relation to the mining sector.

Contraction of the Gobi Desert, 2000–2012

“…NDVI may reflect an increase in degradation if it represents a decline in diversity or increase in unpalatable species whilst irrigation, deforestation, grazing and urbanisation have direct impact in the region [6]. Equally, a mining boom across the Gobi places environmental, water and development demands on the landscape [61].…”

The Rentier State at Work: Comparative Experiences of the Resource Curse in East Asia and the Pacific

“…The mining license system in Mongolia has also contributed to a wariness on the part of investors to make extractive commitments. The system is operated manually, with multiple points subject to administrative corruption and political interference and the general perception is that favouritism and conflicts of interest in license allocation are major problems (Reeves ). The 2006 World Bank Investment Climate Survey estimated unofficial payments for exploration and mining licenses at 40 per cent of official fees.…”

Desert boundaries: the once and future Gobi

“…It is conceivable that in the future China may perceive it in their national interest to control parts of the Gobi desert currently not under its rule, a fact mentioned in political science discourse (Reeves ). One possible motivation would be mineral resources, such as the Oyu Tolgoi mine or potential oil discoveries.…”

“…As Mongolia is a poorly industrialised, land‐locked country, China already dominates the economic sphere and controls the major import/export route without asserting physical control. Realpolitik keeps the neighbours on good terms yet in the past China has closed the border to all transport when displeased with Mongolian actions (Reeves ).…”