Yesterday, I talked about Crossing the Chinese/Mongolian Border by Land. I mentioned that I met a really interesting, intelligent, and world-traveled guy named Bat, and we had some good conversations.
I learned a lot about Mongolia from Bat. Here's some highlights:
Mining is one of the fastest growing sectors in Mongolia - some Australian companies have made huge investments into Mongolia the last year or two, and next year is projected to be the largest budget the government of Mongolia has ever had.
I asked Bat, "So what do you think the government is going to spend the new revenues on? Military, education, infrastructure, or...?"
And I never got an answer to that, because it wound up on an excellent tangent. "Military? Oh no, no military. Very little. We don't spend much on military, because we have only two neighbors - China and Russia. If we get into a war with one of them, we lose. It doesn't matter how much military we have."
He goes on, "Population of Mongolia is 2.7 million. You give everyone an assault rifle - everyone, the kids, the old people, everyone - and we still lose to China or Russia in a war. You know, you're from the United States. United States diplomacy is all about 'foreigners' - foreign nations. The USA cares about every foreign nation in the world. Mongolia, Mongolian diplomacy is not about everyone. We say our diplomacy is not about foreigners, it is about neighbors and foreigners... and neighbors first."
We talk more along those lines - basically, Mongolia is landlocked, the nearest port is Tianjian which is quite a ways away in China, and all their exports have to be shipped into or through China or Russia. If their relations get bad with either country, they've got a huge problem on their hands.
So most of the diplomatic efforts of Mongolia are focused on keeping China and Russia happy. They try to provide a lot of quality exports and cooperate with China's and Russia's governments. Bat goes on to tell me that as long as China and Russia are happy, Mongolia doesn't really have to worry about anyone else - no one can invade Mongolia without going through China or Russia.
The main trans-Siberian rail line through Mongolia is 50% Russian-owned, and Mongolia's officials are happy with that. Mongolia imports a lot of Chinese clothing, tobacco, and consumer goods, and export food, fuel, wood, and metal to China, which they're also happy about. Mongolia's entire foreign policy, more or less, is "Keep China and Russia happy."
Other interesting points -
It's a young culture. Mongolians marry young and have a lot of children. There's been a gradual shift these days from Russian being the second language of Mongolia to English being it. The Mongolian and Russian alphabets are the same, the languages are similar, and the cuisine is similar. But Mongolia is doing what they can to have their citizens learn English, especially in technology.
I was lost when I'd just arrived, kind of wandering around, when a woman came up to me and asked if she could help, and walked me to where I was going. She's a teacher of basic computer use, basic webdesign design, and runs a small Mongolian web consulting business. She studies English in the nights as well - she says English is going to be very important for Mongolia to do more international business.
Bat says that everyone over 40 speaks Russia, and everyone under 20 is learning English. In between is half and half.
Mongolia was primarily Buddhist before the Communist revolution, when the Mongolian People's Party outlawed religion and the country became atheist.
Now, religion is coming back in. Christianity is growing surprisingly quickly, particularly Mormonism - Bat said the Mormons have lots of money, and have built the nicest churches and temples in Ulan Bator, so people want to go there. Bat's daughter is 14 and likes to go to church sometimes, thinks the people at church are nice people. Bat himself is an atheist, but likes Christians. Hates Buddhists, incidentally - which surprised me. Bat's very live and let live about everyone - likes China, Russia, America, Europe. Comfortable with all religions. Dislikes Buddhism. Go figure.
The Erlianhaote/Zamyd Uud border is now a source of massive importing and exporting. Energy and metal import/export trains run 24 hours per day across the border. Trade goods and consumer goods move nonstop during daylight hours using the Mongolian jeeps.
There's a 5% import tax and 10% VAT charged on imports, but customs officials are lax about it. Most trade goods are bundled so you can't see what's inside, and they only occasionally cut a package open to check. You can pretty consistently pay a "flat rate" to the customs official per package to not have them check it out carefully.
Some key industries don't pay import tax or VAT - particularly agriculture, which is good for Bat. The Mongolian government wants the price of food as low as possible.
Culturally, Bat says Mongolians love China, but hate the Chinese. They like China being there for import/export and it makes up a really large amount of the country's economy. But Mongolians don't like Chinese and frequently they don't get along.
I asked why? Bat says China and Mongolia have a history of warring and beating down on each other. Genghis Khan conquered China, which stirred up all sorts of animosity amongst the Chinese. Then the Qing Dynasty conquers Mongolia, and so the Mongolians don't like the Chinese.
Fascinating to learn about the country. It's poor here - the infrastructure is low quality, the sidewalks are missing in many places, and a lot of the buildings are of the cheap-quick-primitive-in-a-modern-way design. (Thin walls with corrugated steel roofing, for instance)
But despite that, you get the feeling that something is happening here. The people are industrious, strong, purposeful. Bat told me there's a bit of a problem with minor crimes here - pickpockets and such get off lightly when caught, so that persists. There had been more crime here when there was less opportunity, but things are starting to change as more investment is made and it looks like it's going to be a virtuous cycle that benefits all industries.
At some point, they'll have to get serious and crackdown on crime if they want to energize tourism and promote foreign investment. But it seems like something is happening here. It's a young population, industrious nature, modernizing, and in a great position to rise via trade with China. That said, a lot of their success will hinge on their foreign policy - which is first and foremost, keeping Russia and China happy.