The New Mongolians

Chinggis Khaan Statue

Newly completed 130 foot stainless steel statue of Chinggis Khaan

Ulaanbaatar – A city that is best described as a hive of activity. Dozens of cranes can be seen from the centrally located Sukhbaatar Square. This present day capital of Mongolia used to be part of a nation that dwarfed the mighty Roman Empire. From Korea on the Pacific Ocean to the Eastern Mediterranean this once colossal land codified much of what we know today in warfare, diplomacy, trade and even tolerance. Unfortunately many Eurocentric texts have portrayed the Mongolian Empire as sailing upon waves of mindless destruction. Regardless, the past is in the past – today and tomorrow is what concerns us now.

Cranes at work in Sukhbaatar Square

The photo above shows a half dozen cranes at work near a soon to be completed office building in a city that has seen its population grow 55% from 750,000 in the year 2000 to over 1,100,000 now. The construction and urban population explosion are symptomatic of a country rapidly growing and creating wealth. However, as with many things in this area of the world, the photo requires additional narration. The country has just survived a brush with complete political and economic gridlock.

While transforming itself from the world’s second communist state after the iron curtain fell two decades ago, Mongolia found itself at a constitutional crisis. The 2008 elections were widely decried as corrupted. Predictably, everything ground to a halt. Without visibility, capital will not be risked. So its massive deposits of oil, coal, iron, and uranium as well a world-class copper/gold discovery remained at rest. Even the building referenced above saw work cease. In October of last year a prominent business figure with experience as the country’s Foreign Minister was elected as the new Prime Minister. With his election the log jam broke and confidence returned. In addition a brilliant economic plan was unveiled that addresses new tax law and policy as well as delineates an ambitious plan for a new industrial center. This center will focus on adding value to locally produced resources for export to the world’s largest consumer of commodity related materials – China.

In just a year, major projects have surged forward. I visited a 5,500 worker camp that is dizzyingly erecting what will likely become the third largest copper/gold mine on the planet. Other major coal resources are quickly being brought online. Major exploration is taking place to confirm iron and uranium mine feasibility.

Drilling cores riddled with gold and copper from Oyu Tolgoi.Massive build out of a sprawling gold/copper mine in the southern Gobi DesertMassive build out of a sprawling gold/copper mine in the southern Gobi Desert

Drilling cores riddled with gold and copper - left photograph - from Oyu Tolgoi have touched off a massive build out of a sprawling gold/copper mine in the southern Gobi Desert. Just two segments of this project are shown in the middle and right photographs.

This is how economies are supposed to work – it makes me giddy with excitement. An emerging bureaucracy combined with an emerging economy makes for one heck of a wealth generator. People who have already been swept up on this process are referred to locally as ‘the new Mongolians’. They buy stuff and employ people. They travel. They save and invest. The other 50% of the population who still live in the traditional felt, hide, and wood constructed ‘Gers’ will have new opportunities to contemplate. And thus per capita GDP should surge by 66% by 2015 -and if all goes according to the very ambitions and very well thought out plan, should rocket some fourfold by 2021. As it stands now, the country has literally merely scratched the surface when it comes to creating wealth. Case in point; their GDP is minuscule when compared to the market value of proven and indicated resources.

While I hope to be proven wrong, I doubt that I will find a country with a better set of all around investment metrics on the planet. These are not a people who are resting on their proud and remarkable history. They are charging forward with a determined dignity that is likely to result in the entire country seeing broad socioeconomic benefits.