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rfmcdonaldThe October 2005 issue of The Globe and Mail monthly supplement, Report on Business, featured Geoffrey York's article "Desert Storm," which examines controversial mining magnate Robert Friedland's efforts to exploit the abundant mineral resources in the South Gobi region of Mongolia. This central Asian country's economy has not recovered from the shock caused by the collapse of the Soviet Union, the end of Soviet aid, and the transition to a capitalist economy. One might naturally assume that Mongolians would welcome the development of their country's mineral resources, with booming import markets in China next door and in South Korea and Japan just a bit further away. Unfortunately, a speech given by Friedland in Miami cast some doubt on his motives.
As it happens, quite a few Mongolians--and not only the fifty thousand herders who live in the area of the mine--not only speak English, but they have Internet access. Most of York's article focused upon how Friedland was trying to overcome his self-inflicted PR wounds.
The most unfortunate thing is that even if Friedland is crudely exploitative, Mongolians might not have any choice but to let him do his work. Paul Treanor, back in April 2001, presented a comparative study of Mongolia with the American states of Wyoming and Montana. The one high-altitude region in central Asia is a poor Third World territory populated by nomads; the other high-altitude region in central North America is a rich First World territory once populated by nomads. The secret of Wyoming/Montana? Its nomadic population was either exterminated or removed to reserves, and a First World population and economy highly dependent on external trade and subsidies imposed. Mongolia's traditional herding culture simply can't support hundreds of thousands of people at acceptable living standards. Sooner rather than later, Mongolia is going to deruralize and urbanize, losing vast chunks of its traditional culture.
Friedland might not be wrong about the South Gobi's population in a generation's time.
Friedland added that he was in "the final stages" of negotiating a long-term stability agreement with the Mongolian government to enshrine the tax privileges he'd sought. He boasted of the absence of local opposition in the Gobi. "People near your mining project are a real nightmare. ...The nice thing about this, there's no people around. ...There's no NGOs. ... You've got lots of room for waste dumps without disrupting the population."
And then he began talking of profits. His taxes in Mongolia, he suggested, might be "say, 5 or 6%." He talked of the lucrative economics of block-caving (the technique he wants to use for Hugo North, one portion of the ore body at Oyu Tolgoi). He called the technique a "cash machine," and he reached for another metaphor to explain the profits. "You're making T-shirts for five bucks and selling them for $100," he said. "That is a robust margin" (49-51).
As it happens, quite a few Mongolians--and not only the fifty thousand herders who live in the area of the mine--not only speak English, but they have Internet access. Most of York's article focused upon how Friedland was trying to overcome his self-inflicted PR wounds.
The most unfortunate thing is that even if Friedland is crudely exploitative, Mongolians might not have any choice but to let him do his work. Paul Treanor, back in April 2001, presented a comparative study of Mongolia with the American states of Wyoming and Montana. The one high-altitude region in central Asia is a poor Third World territory populated by nomads; the other high-altitude region in central North America is a rich First World territory once populated by nomads. The secret of Wyoming/Montana? Its nomadic population was either exterminated or removed to reserves, and a First World population and economy highly dependent on external trade and subsidies imposed. Mongolia's traditional herding culture simply can't support hundreds of thousands of people at acceptable living standards. Sooner rather than later, Mongolia is going to deruralize and urbanize, losing vast chunks of its traditional culture.
Friedland might not be wrong about the South Gobi's population in a generation's time.
