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Mongolia: a democratic breakthrough?

Mongolia was once considered among the least likely of former communist nations to make a successful transition to democracy. But it now holds regular national elections and its economy is poised for growth.

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When the Soviet Union cut off subsidized trade and economic aid in 1990, Mongolia’s gross domestic product dropped by as much as a third. Food shortages followed. Prices skyrocketed. Agricultural and industrial output fell drastically.

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During a visit in mid-1992, I discovered that two well-meaning but young and inexperienced Mongolian reformers had lost nearly all of the country’s foreign exchange in a series of currency dealings that went sour.

Mongolia’s future

In October 2009, I found myself in Mongolia again, this time for an international broadcasting conference. At the government building in Ulan Bator’s central square, top officials, diplomats, and businesspeople had gathered to sign a landmark mining agreement with an international consortium.

The government hopes that the $4 billion agreement will lead to more foreign investment, create employment, and provide more funds for education and healthcare as well as for the greater prosperity of all Mongolians.

Nearly four times the size of California, Mongolia is populated by only 3 million people, many of them poor, nomadic herders. But the country is rich in gold, copper, and other minerals. The new agreement could lead to others.

At the same time, Mongolia has managed to foster good relations with China and Russia as well as with the United States, Japan, and both North and South Korea.

In the early 1990s, when I first visited Mongolia, many feared that an ever more powerful China might dominate the country. Although China is clearly a big player in Mongolia’s trade and mining sectors, it has so far refrained from disrupting Mongolian politics.

But things could still go terribly wrong.

In a brief interview with Radio Free Asia following the Oct. 6 mining agreement signing ceremony, Mongolian President Elbegdorj Tsakhia warned that corruption could threaten much hoped-for gains from the mining sector.

“Now we have some profit, some money from mining,” he said. “If you have bad government, it’s going to be a curse.”

Mr. Elbegdorj said that the key will be reform of the judicial system and an anti-corruption agency that can work more effectively, because “corruption is deep-rooted in this country.”

He has set an ambitious goal of making the judicial system more open, accountable, and independent by 2011.

The world should stay tuned.

Dan Southerland, executive editor of congressionally funded Radio Free Asia, is a former Asia correspondent for the Monitor and former Beijing bureau chief for The Washington Post. A version of this essay first appeared at Radio Free Asia’s website.