October 24, 2011


The Mongolian sandwich: A tug of war between commercial logic and popular sentiment (Banyan, Oct 8th 2011, The Economist)

From Ulaanbaatar, situated to the north of the Gobi, it can easily look as if parts of the south are being integrated into China. Supplies for the projects pass across the border and the mines' output will soon return. Ambitious plans are being aired to build new railways not just to nearby China, but into Russia or eastern Mongolia as well, whence there would be access to the markets of South Korea and Japan. Some economists argue this makes no sense, despite the fear of a loss of pricing power to a Chinese monopsony. Even the gauge of the railway is controversial--a narrow-gauge one to the south that would link seamlessly with China's network is the obvious option, and the one that people working on the project say is being adopted. But the Soviet-built trans-Siberian railway is broad-gauge.

Relations with Russia have improved. An effort to revive Mongolian script to replace the Cyrillic alphabet imposed in the seven decades of Soviet domination petered out. Russia, or the Soviet Union, is credited with having preserved at least nominal Mongolian independence, when the country might have been absorbed by China. But suspicions linger. This summer Mongolia ran short of diesel because Russian imports dried up. The official reason was a shortage of domestic supply. Many Mongolians suspected a Chinese-style political squeeze.

So the search for third neighbours is understandable. Mr Tsogtbaatar points out that the country with more Mongolian expatriates than any other is neither China nor Russia, but South Korea. Next comes America. A vigorous if family-dominated democracy and mineral treasure-chest, Mongolia is a strong Western ally, contributing troops to the wars in both Iraq and Afghanistan. A measure of its stature is that, by the middle of this week, Germany's Angela Merkel was still due to desert Europe's crisis for a visit on October 12th. It will go more smoothly now that German courts have freed a senior Mongolian official detained on kidnapping charges. Mongolia may still be short of neighbours, but the whole world wants to be its friend.

Posted by at October 24, 2011 6:25 AM

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