Mongolia: Before the Gold Rush
China’s hunger for raw materials has brought double-digit economic growth to its northern neighbor, the coal and mineral-rich republic of Mongolia. But an anti-Chinese nationalist backlash has arisen in response to the environmental toll of foreign mining and the deeply uneven distribution of its rewards. The Economist’s Banyan discusses the rise of Mongolian “resource nationalism”:
One of the world’s fastest-growing economies, Mongolia finds itself at odds with the sources of its new-found wealth: the foreign miners and financiers dazzled by the unfathomable bounty under its vast terrain. Some foreigners fear that populist politicians, pandering to a belief that the nation is selling its birthright too cheaply, may kill the goose before it has laid any golden eggs. Almost certainly not; but “resource nationalism” will surely make life uncomfortable for geese.
[…] During the campaign [ahead of parliamentary elections last June], a scandal blew up when the foreign-controlled owner of Ovoot Tolgoi, a Mongolian coal mine, wanted to sell it to a Chinese state-owned enterprise. Acutely conscious of their commercial dependence on China, Mongolians are sensitive to any hint of its gaining control over them. A “strategic entities foreign-investment law” was pushed through, tightening approval procedures. Mongolia is far from unique in having such a law, but it was taken as a sign of an incipient backlash.