Mongolia

A Guide to Economic and Political Developments

Ian Jeffries

• Publisher: Routledge
• Year: 2007
• ISBN:
  9781134094677
• Edition: 1
• Topic: Economics
• Subtopic: Political Economy
• Index: Economics

With Mongolia fast becoming a significant exporter of minerals and raw materials, this book provides a full account of political and economic events in this important country. It focuses on the period since the establishment of the Soviet-backed Mongolian People's Republic in 1924 and the transition towards a democratic free market system since the collapse of the Soviet Union.

Covering key topics in Mongolia's recent development, the book looks at:

• economic and political reform process
• the role of the private sector
• foreign aid
• trade and investment
• the attempts to tackle pressing issues such as growth, inflation, unemployment, poverty, problems of climate and weather, and pollution.

This book is an important resource for anyone seeking to understand this fascinating country's affairs.

1 Political, demographic and economic background

Political background

A country of pastoral nomads, Mongolia was ruled by China during the Qing dynasty (1644–1911), although Mongolia actually ruled China during the Yuan dynasty (1271–1368).

The Mongols under Genghis Khan invaded China in the thirteenth century and they established their capital at Beijing (meaning ‘northern capital’). The Mongol Yuan dynasty ruled for nearly a hundred years until the Mongols were expelled by the Ming in 1368.

(Jeffries 2006c: 9)

Genghis Khan (Chinggis Khan) (1162–1227) was proclaimed ruler of ‘All the Mongols’ in 1206 (Jeffries 1993: 126).

‘Chinggis Khaan [is] the usual spelling in Mongolia’ (The Economist, 23 December 2006, p. 105).

‘The Mongol chieftain Temujin became Genghis Khan in 1206 when he united all the Mongol tribes’ (The Economist, 7 August 2004, p. 53).

Genghis Khan was probably born in 1162 . . . near the spot where he was proclaimed emperor of all the Mongols in 1206. By the time of his death . . . [his] conquests extended from China to the Caspian Sea . . . [He] was buried in 1227 . . . An American–Mongolian expedition has discovered a walled burial ground . . . that leaders of the group reported Thursday [16 August 2001 may be the secret tomb of Genghis Khan].

(IHT, 18 August 2001, p. 1)

When Genghis Kahn created the Mongol empire 800 years ago he consolidated the states under one system and opened them up to trade and cultural exchange. He was considered responsible for giving Mongolia a unified and ethnic identity and provided stability for the nation during uncertain times. Most Mongolians regard him as a great leader, whose infamy for brutality is balanced by the positive effects he had on the Mongol state . . . In the thirteenth century . . . Genghis Khan consolidated several Mongolian tribes under his rule creating what was then the largest empire in the world.

(IHT, Survey, 23 May 2006, p. 21)

‘Mongolia built the world’s largest contiguous empire in the thirteenth century under Genghis Khan’ (IHT, 20 September 2006, p. 19).

Genghis Khan’s hordes killed from 30 million to 60 million people across Asia and Europe . . . In October [2004] a Japanese-financed research team searching for the tomb said it had found it at Avraga, around 250 kilometres, or 155 miles, east of this capital . . . Temujin, as he was called before he assumed the title Genghis Khan, or universal ruler, in 1206 . . . In February 2003 the study ‘The Generic Legacy of the Mongols’, published by the American Journal of Human Genetics, estimated that Genghis Khan has more than 17 million direct descendants living today: one in every 200 people is related to him. In Mongolia alone as many as 200,000 of the country’s 2 million people could be Khan descendants.

(www.iht.com, 9 May 2005; IHT, 10 May 2005, pp. 1, 4)

The number of people the Mongol horde killed is put at 40 million across Europe and Asia . . . [China is] lavishing $20 million on the renovation of a mausoleum to Genghis Khan which it first built in 1954 but which then fell into a decrepit state . . . While the Chinese say their mausoleum marks his final resting place, there are at least two other rival claims. Last year [2004] a joint Japanese and Mongolia research team claimed to have identified the actual mausoleum in an area near the ruins of his palace complex, south-east of Ulan Bator. Meanwhile, a joint American and Mongolian team claims it is digging at the right place, near his original birthplace of Hentiy . . . His date of birth [is disputed but] . . . generally reckoned to be 1162 . . . He died, apparently, in 1227.

(Independent, 11 May 2005, pp. 22–3)

Genghis Khan (1162–1227) was orphaned at thirteen. He began with a mere handful of followers, united the Mongolian tribes, and rose to become the most successful conqueror in history. His empire was the largest ever conquered by a single commander. It included the lands now known as Mongolia, northern China, most of Iran, Afghanistan, Pakistan, Turkmenistan and Uzbekistan. At its height, in the reign of his grandson, Kublai, it was the largest continuous empire in history, stretching east from the borders of Hungary, through Russia, the Middle East and reaching the Pacific Ocean. The Mongol empire was the first to know religious tolerance. In the capital, Karakorum, churches, mosques and temples stood side by side. In his empire women had equal rights with men, even among subject peoples. His laws prescribed the death penalty for merchants who allowed themselves to go bankrupt for a third time. He had 500 wives and concubines.

(The Times, Weekend Review, 23 April 2005, p. 5)

Genghis Khan laid the foundations for the Renaissance, according to Chinese historians. Khan’s empire, which spanned Asia and Europe, also pioneered cultural and economic relations between the two continents and reopened the Silk Road, reviving the ancient trade link, they said.

(The Times, 21 July 2006, p. 39)

‘Mongolians and Koreans have acknowledged their ethnic and cultural ties for centuries. There was considerable intermarriage among Mongolian and Korean elites in the thirteenth century. Koreans believe their ancestors came from Mongolia’ (Batchimeg 2006: 277).

Mongolia was formerly the Chinese province of Outer Mongolia. Requesting Russian protection, Mongolia declared its independence from China on 1 December 1911. Although China recognized Mongolia’s autonomy under its suzerainty as a result of an agreement with Russia in November 1913, Mongolia was finally induced to go along with this only in 1915. Mongolia reverted to being a Chinese province in the period 1919–21 after Chinese troops reestablished control. On 11 July 1921 independence was once again declared after Soviet troops had arrived in Mongolia in pursuit of White Russian forces. A limited monarchy prevailed initially (Jeffries 1993: 126).

The Mongolian People’s Republic formally came into being in November 1924, the second communist (socialist in Marxian terms) country after the Soviet Union. Only the Soviet Union recognized the new republic until after the end of the Second World War. China formally recognized Mongolia’s independence on 5 January 1946 (Jeffries 1993: 126).

Soviet troops stayed on until 1925. Five divisions were stationed in Mongolia in 1966 and one was taken away in 1987. According to Milivojevic (1987: 562), Soviet forces were ‘officially’ stationed in Mongolia from 1921 to 1925, from 1936 to 1956, and after 1966, but unofficially at least some Soviet forces were stationed there every year after 1921. Uniquely, communist Mongolia had no domestic armaments industry (p.).

The Mongolian People’s Revolutionary Party (MPRP) was founded in March 1920 by Suhbaatar, who died in February 1923. Yumjaagiyn Tsedenbal became General Secretary of the MPRP in 1940. He became prime minister in 1952 after the death of Horlogyn Choybalsan and (after removal 1954–8) president in 1974. In August 1984 Jambyn Batmonh (sometimes written Batmunkh) replaced Tsedenbal as party leader. Batmonh became prime minister in 1974 and president in 1986; Tsedenbal was expelled from the MPRP on 15 March 1990 and stripped of all state titles on 20 April (Jeffries 1993: 126).

Diplomatic relations were established with communist China in 1949 and with the United States on 27 January 1987. Mongolia became a member of the United Nations in 1961. In 1985 border trade with China was resumed, but relations with China improved noticeably after Mikhail Gorbachev’s Vladivostok speech in July 1986, in which he said that Mongolia and the Soviet Union were discussing a partial withdrawal of Soviet troops. A Soviet motorized rifle division withdrew between April and June 1987, a 25 per cent cutback of the roughly 60,000 Soviet troops still left in Mongolia (Jarret 1988: 81). In his speech to the United Nations on 7 December 1988 Gorbachev promised that a ‘large portion’ of the troops would be withdrawn, subsequently quantified at three-quarters. The March 1990 agreement meant that Soviet troops and their equipment were to be withdrawn entirely by the end of 1992 (later fixed at September of that year). In 1987 Mongolia renewed scientific and technical co-operation with China after a span of two decades.

Mongolia pursues what it calls a ‘third neighbour’ policy. This involves remaining on good terms with its giant neighbours [Russia and China] but also reaching out to countries such as America and Japan (Mongolia’s biggest aid donor).

(The Economist, 23 December 2006, p. 106)

President Nambaryn Enkhbayar:

This year [2006] we will celebrate the 800th anniversary of the nation of Mongolia, established by Genghis Khan . . . We Mongolians are a nomadic people. We have to be ready to move whenever it may be necessary. To make the change to democracy was like migration and moving to a new pasture.

(IHT, Survey, 23 May 2006, p. 21)

Chairman Mao Zedong may once have dismissed Genghis Khan as someone who ‘only knew how to draw his bow at the eagles’ . . . Within China many people [still] retain the more traditional view that he was a barbarian invader . . . [But] modern times [have seen the latter’s official] reinvention as a Chinese hero . . . State-approved histories paint an idealized picture of an eternal ‘Chinese’ state grouping the majority Han with ethnic brothers such as the Mongolians . . . The official justification rests essentially on the view that Genghis Khan is Chinese because his successors ruled China as emperors and many Mongolians live within Chinese state borders today . . . [There has been] a multi-million-dollar redevelopment of the site of the great khan’s ‘mausoleum’ in [the Chinese province of] Inner Mongolia’s Ordos prefecture . . . The Ordos ‘mausoleum’ is actually the site of a sacred enclosure where relics of the great khan were preserved. Now a complex of statues, plazas and museum halls has been built around the site in a style reminiscent of China’s imperial tombs . . . Traditional Naadam festivals of riding, shooting and wrestling, once banned, are now subsidized by the state.

(Mure Dickie, FT, 29 December 2006, p. 7)

The government has declared 2006 . . . the 800th anniversary of the establishment of the Mongolian state . . . a year-long celebration with special activities planned almost every day . . . The culmination of festivities falls on the national holiday, Naadam, on 11–13 July . . . Naadam, or competition, is Mongolia’s most important sporting festival and revolves around the country’s most emblematic sports: horse racing, archery and wrestling. The centuries-old three-day-long festival, held in July, is a ritual which honours the mountain gods, and during which people traditionally drink fermented mares’ milk and feast on cold meat pancakes, ice cream and fruit . . . Religions [are] Buddhist Lamaist, Shamanist, Christian and Moslem.

(IHT, Survey, 23 May 2006, p. 21)

Demographic background

The population of this arid country reached 2,043,400 in January 1989 (compared with 649,300 in 1921), of whom 52 per cent were urbanized. The population was growing rapidly, a cause of some concern because of factors such as rising youth unemployment (Alan Sanders, FEER, 27 October 1988, p. 42). The population growth rate was 2.8 per cent and the infant mortality rate 75 per 1,000 (Alan Sanders, Asian Survey, 1990, vol. XXX, no. 1, p. 66).

The population was 2.18 million in 1992 (EIU, Country Report, First Quarter 1993, p. 5).

The death rate fell from 22 per 1,000 in 1940 to 8.4 per 1,000 in 1989. The literacy rate is 97 per cent (Denizer and Gelb 1992: 5).

Mongolia is half the size of India, but sparsely populated (Milne 1991: 2). It has a homogeneous population, with around 95 per cent Mongol-speaking.

The urban population increased from 44 per cent of the total in 1969 to 58 per cent in 1990 (Milne 1991: 2). The urban population is 60 per cent, and 25 per cent of the total population lives in the capital (Asian Development Bank 1992: xiii, 121–2). ‘Almost half the people live in rural areas and some 40 per cent of the entire population rely for their livelihood on tens of millions of livestock’ (FEER, 31 May 2001, p. 30).

Mongolia’s 2.5 million people live in an area twice the size of France . . . During the 1960s tens of thousands of ethnic Chinese were expelled. In 1918 there were 100,000 ethnic Chinese Mongolians. By 1989 there were (officially) 247 . . . Petty trade and barter across the Chinese border have ballooned as Mongolia has opened up. The Chinese are the biggest buyers (and smugglers) of cashmere . . . and some 20,000 Chinese nationals are now reckoned to live in Mongolia . . . There is a large Kazakh minority and several culturally distinct Mongolian groupings.

(The Economist, 22 January 2000, p. 109)

Mongolia occupies 1.56 million square kilometres [603,909 square miles] of the Central Asian plateau, but its population [2.7 million in 2005, according to the United Nations] is much smaller than the Mongol population of China. The Sunni Moslem Kazakhs living in the western border regions are the only significant national and religious minority, comprising some 5 percent of the total population, although migration to Kazakhstan in the 1990s has reduced their numbers . . . The major religion is Buddhism . . . A third of Mongolia’s population lives in the capital city [Ulan Bator or Ulaanbaatar, meaning ‘Red Hero’], while half the people herd livestock in the countryside . . . Life expectancy is sixty-two for men and sixty-six for women.

(www.bbc.co.uk, 4 February 2006)

One of the government’s priorities for the 2005–8 period focuses on regional development . . . President Nambaryn Enkhbayar: ‘One-third of the population lives in Ulan Bator and the capital city has potential, but we believe that in order to develop Mongolia in a balanced way we also have to modern...