When Economic Growth is Not Necessarily a Good Thing


The vast open landscapes of Mongolia are one of the great wildernesses of Asia. Famed for nomadic cultures that depend on the land, this former communist country of almost 3 million people has the world’s fastest growing economy, due to rampant gold, tin, copper and coal mining. 

Even so, despite the opportunities provided by the mining industry and successive socio-economic development, over 30% of Mongolians live in poverty. Fears concerning corruption and the loss of traditional values – due to people migrations from the steppe to urban areas – are also mounting, which could seriously impact this nation of entrenched customs and strong family bonds, vital to the nomadic way of life in this harsh yet beautiful land.

Adapted for the Extremes

Most famously ruled by Genghis Khan, the Mongol’s amassed a vast domain through ruthless conquest beginning in the late-1100s, made possible by hoards of cavalry. At its height in the 13th century, Mongol territory stretched from Poland to Vietnam, forming the largest continuous land-empire in history. Today, however, such violent lifestyles have given way to Buddhism and nomadic pastoralism, with herders ferrying livestock across the grasslands on horses and camels (and more recently, motorbikes) according to the changing seasons. 

Modern Mongolia comprises grasslands and the Gobi Desert to the south, mountainous regions that undulate into Kazakhstan to the west, and Siberian coniferous forests that flank northern regions. Locked between Russia and China, Mongolia’s continental geography also experiences extremes in climate: desert temperature can soar to over 95 degrees in the summer, while winter nights often plummet to -40 degrees in January.  

The family unit is integral for nomadic pastoralists, who reside in circular felt yurts – or gers – that intersperse the landscape, and which can be disassembled and relocated to suit livestock grazing needs. Today, a third of Mongolia’s population are traditional farmers; however, the financial lures of the city, coupled with extreme winter blizzards, known as the zud, are altering Mongolian demographics. According to the United Nations, the 2009-10 winter was responsible for the loss of an estimated 8 million animals, including horses, yaks and goats. This prompted many affected families to move to more static dwellings – yurt-slums that sprawl from the peripheries of urban settlements are common. Such migration often results in higher rates of unemployment and reinforces poverty. The problem is particularly pronounced in Ulaanbaatar, the capital that supports half the national population, where many residents and especially street children dwell in sewers during the frigid winters.

Mining Booms

Rich in minerals, Mongolia’s geology has enticed numerous mining companies, which has transformed the traditionally agriculture-based economy. Mining wealth now bolsters Mongolia’s GDP, which grew by 17% last year, and minerals represent around 80% of all exports, mostly to the nation’s vast, resource hungry neighbor, China. Mining is a key issue in Mongolian politics and now voters want to see a greater distribution of mining wealth and increased spending on education, health-care and infrastructure. One of the largest mines lies north of the Chinese border, close to the settlement of Khanbogd, in the semi-desert grasslands flanking the Gobi Desert. Originally a base for herders and livestock, the region is now experiencing rapid population growth due to the proximity to the Oyu Tolgoi Mine. The demographics are shifting: nomadic herder numbers are dwindling as many have moved to permanent dwellings in Khanbogd for mining work. 

Due to this region’s rich copper and gold deposits, the Mongolian government has signed a joint venture with the Canadian company Turquoise Hill Resources to extract such geological wealth. The resultant Oyu Tolgoi mine, which is expected to open next month, is already responsible for roughly 30% of Mongolia’s annual economic output. This wealth has led to the development of localized infrastructure, including the building of an airstrip, roads, and water and electricity facilities, which has influenced the regional populace. At the turn of the 21st century, some 2,000 people lived in Khanbogd, yet now the population is around 7,000 individuals, with a further 10,000 workers based at the mine. By 2018, Oyu Tolgoi is expected to be one of the most productive copper and gold mines in the world, providing employment and boosting economic output, which should accelerate developmental rates. However, there are contrasting thoughts concerning this boom, which is changing Khanbogd and greater Mongolia forever – and not necessarily for the better. 

Conflicts between the Old and the New

Since the 1990 collapse of communism, Mongolia has changed considerably. Today, modern towers stand proud around Ulaanbaatar’s central Sukhbaatar Square, which soar over Soviet-inspired monuments from the mid-20th century. The mines also provide relatively well-paid jobs to local people who take advantage of the available opportunities. For some Mongolians, these new trappings of mine-funded modernity are gladly received, especially among the younger generations. However, traditionalists often feel threatened by the loss of social values, widening poverty gaps, increased materialism, and corruption; there are now growing concerns that the burgeoning mining wealth stays with the government. There are also regional health and environmental concerns: Mining has been blamed for triggering a rise in respiratory problems, and for causing disruptions to natural water-supplies, which pastoralists use for animal grazing. The government promises to clean up the environmental damage caused by the mines once they have been decommissioned; nevertheless, many residents do not believe such pledges will result in action. 

Mongolia is clearly benefitting from natural resource extractions. However, the nation is prone to the classic problems of development, which different generations respond to accordingly: although the young tend to embrace modernity, older residents often fear materialism and corruption. When a nation develops, customs and traditions can disappear. Mongolia’s varied landscapes and extreme climates collectively fashioned an iconic and unique nomadic lifestyle that has for centuries characterized the region. Socio-economic progress threatens to dilute Mongolia’s distinctive cultures and damage its pristine expanse of wilderness. This loss of traditions could influence the national psyche, which has, typically, enabled Mongolians to survive in this challenging land. What seems inevitable is that these changes will have major repercussions for future generations, especially in this age of predicted climate change and environmental uncertainties.