--- description: Mongolia has discovered elections and minerals. But the young democracy must tread warily if it is to chart an independent future title: Hesitant Steppes image: https://static.time.com/v3/assets/bltea6093859af6183b/bltb1ae8ccaaa7b1a5c/698a4506929fad7e75bfaa98/360_wmongolia_0820.jpg?branch=production&width=750&quality=75&auto=webp&crop=16:9 ---  * [World](/section/world/) # Hesitant Steppes by [Hannah Beech](/author/hannah-beech/) Aug 20, 2012 4:00 AM CUT  Nomads still live in traditional gers around Mongolia's biggest economic undertaking: the Oyu Tolgoi mine. Nomads still live in traditional gers around Mongolia's biggest economic undertaking: the Oyu Tolgoi mine.Davide Monteleone for TIME by [Hannah Beech](/author/hannah-beech/) Aug 20, 2012 4:00 AM CUT The Gobi is one of nature’s most inhospitable creations. Traveling this vast expanse of gravel and sand in southern Mongolia, my eyes crave anything to ease the monotony of the parched panorama–a thorny scrub or pile of bleached camel bones. In summer the temperatures soar to 122F (50C); in winter they plummet below -40F (-40C). Somehow humans inhabit this desolate region: nomads with wind-chapped faces who hunker down in circular felt tents and raise herds of bony livestock. It is here, deep in the Gobi, that locals noticed earth of an incandescent blue. They named the area Oyu Tolgoi: Turquoise Hill. Today in the wasteland that gave Marco Polo nightmares for years after he traversed it, a colossal encampment rises like a mirage. A little more than a decade after it was identified by foreign surveyors, Oyu Tolgoi is poised to become one of the world’s five biggest mines, with some $350 billion worth of copper and gold reserves. Massive blue warehouses dot the landscape, while conveyor belts transport rocks from deposits roughly the size of Manhattan. Giant vehicles rumble by, their wheels more than twice my height. An international-standard airport is being built. The mine, which is controlled by Anglo-Australian outfit Rio Tinto and will begin early production later this year, teems with 18,000 workers from some 20 nations. In a place that is in the middle of nowhere, a strange order prevails. The cafeteria serves beef Stroganoff to foreign workers and lamb-offal soup to Mongolians. At the provisions shop, I can buy gummi bears, Snapple and fabric softener. The wi-fi in my ger, or traditional Mongolian tent, is faster than in my office in Beijing. Stepping into a bathroom stall, I am greeted by a sign that, in an effort to ward off desert dehydration, asks, “What color is your urine?” For centuries, Mongolia loomed in the world’s imagination as a byword for landlocked isolation. It is a country the size of Western Europe with fewer than 3 million citizens scattered across its lonely steppes. Fifteen times as many livestock animals–camels, horses, sheep, cows, goats and yaks–as people roam the land. Mongolia enjoyed its last heyday during the 13th century when Genghis Khan thundered across the steppes to create the largest land empire the world has ever known. During most of the 20th century, Mongolia slumbered under socialist rule. Even today, one-third of its people live as nomads. But now Mongolia matters. A natural-resource boom has transformed the country, making it the fastest-growing economy on the planet last year, according to some estimates. In 2001, Mongolia was a $1 billion economy. A decade later, its GDP had reached $10 billion. At the same time, the country is a vital–and lonely–democracy in a tough neighborhood. To the north sits Russia, which during Soviet times turned Mongolia into a satellite state. To the south, west and east looms China, which for centuries also claimed dominion over it. Farther to the west spread the great plains of Central Asia, a political morass of personality cults and post-Soviet decay. Since peacefully overthrowing communism in 1990, Mongolia has charmed the world as the little democracy that could. “Our dream is to turn this small, backward country into the model of a modern country,” says Puntsag Tsagaan, a director of the Oyu Tolgoi board and a top Mongolian administration official. “We have already come a long way.” Everything changes, though, when there’s at least $1.3 trillion in untapped minerals beneath the soil. China and Russia are hungrily eyeing Mongolia’s treasure trove, provoking consternation in a country that proudly guards its hard-won independence. The U.S. has taken an interest in the fate of this faraway land in order to check the power of Mongolia’s giant neighbors. As the country negotiates this tricky geopolitical landscape, it must avoid the resource curse that has bedeviled mineral-rich but desperately poor places like Nigeria. “We can’t just be ‘Mine-golia,'” says Tsagaan. “Otherwise we will boom and then bust.” The perils of a young democracy, which in Mongolia has spawned a bitter rivalry between two political titans, threaten stability too. “Everyone knows that Mongolia has many natural resources,” says President Tsakhia Elbegdorj. “But whether these resources mean we succeed or fail depends on our governance. That is our biggest challenge.” Road to Democracy Born in a Camel-hair tent in the shadows of the Altai Mountains, Elbegdorj has lived a life that mirrors Mongolia’s shifting fortunes. The eighth and last son of herders, he won a scholarship to study military journalism in Ukraine after impressing apparatchiks with a poem about the glories of socialism. By 1988, Elbegdorj was back in Mongolia; he started a newspaper called Democracy and helped lead the country’s 1990 democratic revolution. “Before, even the smallest political decision was made in the Kremlin,” he says. “Now we’re in charge of our own future.” Since emerging from seven decades of communist rule, Mongolia has held six parliamentary elections. Voter participation in this sparsely populated land has at times broken 80%. Herders think little of traveling by horseback for days to reach a polling station. “In Mongolia, elections are the best system, because we like to do things our own way,” says 54-year-old Baatar (many Mongolians use only one name), who cast his vote in the June 28 parliamentary elections at a small school surrounded by grasslands. “In America, do you also have elections like we do in Mongolia?” Baatar asks. In 2000, after his first, brief tenure as Mongolia’s youngest Prime Minister was foiled by inexperience and political turbulence, Elbegdorj decided he needed a break. “I had been trained in one superpower,” he says, “but it was the wrong one.” So off went Elbegdorj to the U.S., where he studied English in Colorado and then completed a master’s in public administration at Harvard’s John F. Kennedy School of Government. He then interned at Radio Free Asia, the Washington-based service that broadcasts news in native languages to repressed societies. His job was to provide broadcasts to Inner Mongolia, the Chinese region where tensions have simmered between Mongolian and ethnic–Han Chinese populations. Elbegdorj was probably the only intern in Washington with “Prime Minister” on his CV. His ascendance to the presidency in 2009 came at a tumultuous point. The previous year, postelection riots broke out in the capital, Ulan Bator; a handful of people were killed, shaking the country’s placid image. This year brought another political crisis. In April, Nambaryn Enkhbayar, a former President and Prime Minister whom Elbegdorj narrowly beat in the presidential election, was arrested in an anticorruption campaign. Security forces swarmed his home at dawn and led him away with a bag over his head. Enkhbayar, head of a party that broke away from the socialists who long ruled Mongolia, has high-profile foreign friends. U.S. Senator Dianne Feinstein, who met Enkhbayar during a visit to Mongolia, rushed to his defense. “The allegations against \[Enkhbayar\] have been deemed by one of his attorneys to be ‘insubstantial, stale and petty,'” she said in a statement. The ex-President went on a hunger strike, calling the arrest part of a personal vendetta by his successor. On Aug. 2, Enkhbayar was sentenced to four years in prison on corruption counts. He plans to appeal. Enkhbayar’s political career may be curtailed for now, but he represents a potent new strain in Mongolian politics. In May, just weeks before the elections for the legislature, parliament passed a foreign-investment law that requires majority stakes in certain large-scale projects to receive government approval. Approximately one-quarter of the members of parliament prevailed in the June elections by playing on the nation’s fears of handing over mineral deposits to overseas investors. Resource nationalism is effective politics, and it’s natural for Mongolians to want to control their earthbound treasures. But the reality in Mongolia today is that foreign cash has transformed the economy. Last year $5 billion in foreign investment poured into the country, equal to half the nation’s GDP. The biggest deal to date is Oyu Tolgoi, which will likely contribute one-third of Mongolia’s GDP by 2020\. But there are many other rich deposits to be unearthed, including the world’s largest unexploited coking-coal reserve, at Tavan Tolgoi (Five Hills). Enkhbayar has called for Tavan Tolgoi to be kept a Mongolian venture. He has also urged a renegotiation of the Oyu Tolgoi deal, which currently guarantees a 34% stake for the Mongolian government. “Mining companies are driven by simple profits,” he says. “I want to protect Mongolia’s interests.” Cameron McRae, Oyu Tolgoi’s chief executive, strikes a positive note. “You’re always going to see some element of resource nationalism, but I’m not particularly concerned,” he says. “This is the most important development project \[for Mongolia\] and is likely to be so for the foreseeable future.” True enough. But remember this: in 2005, Robert Friedland, the former CEO of Ivanhoe Mines, one of the signatories to the Oyu Tolgoi agreement, compared the copper and gold deposit to a “cash machine” for foreign investors. Protesters in Ulan Bator responded by burning his image. In ever more open Mongolia, the new capitalism still intersects–and clashes–with the old socialism. Walking a Tightrope Worries about being overwhelmed by foreign powers are natural for any frontier economy. But geography is a particularly hard mistress for Mongolia. Every ounce of coal, gold, copper or uranium will have to exit the country through one of its two neighbors, Russia and China. Every mining deal it signs with one country runs the risk of irking the other. Eager to secure natural resources just north of its border, China has pushed hard into Mongolia. But its little neighbor has at times shoved right back. In April, a Mongolian outcry scuttled the chances of the Aluminum Corp. of China taking over a coal venture in South Gobi province. (The Chinese company is now trying again.) Chinese workers who have poured into Mongolia to build badly needed infrastructure have been attacked by ultra-nationalists. Surveys by Sant Maral, an Ulan Bator–based polling firm, show that 95% of Mongolians distrust the Chinese, even though 90% of the country’s exports head to China. The antipathy extends beyond the economy. The Dalai Lama, the Tibetan spiritual leader who is considered a “wolf in monk’s clothing” by Beijing, is revered by Mongolian Buddhists and has visited eight times. Each time he does, the Chinese government releases petulant statements; on occasion, China has even severed rail links between the two countries as punishment. Mongolia’s response? Extending a firm welcome back to the Dalai Lama. Into this breach has stepped the U.S., the country Mongolians like to call their “third neighbor.” More Mongolian expatriates live in the U.S. than in China or Russia. George W. Bush visited Mongolia in 2005, and Barack Obama hosted Elbegdorj at the Oval Office last year. In return for all that American love, Mongolia has embraced its role as a U.S. ally. Mongolian soldiers have served in peacekeeping missions in Iraq and Afghanistan. When Secretary of State Hillary Clinton visited in July, she heaped praise on her hosts. “Mongolia is an inspiration and a model,” she said. “Against long odds, surrounded by powerful neighbors who had their own ideas about Mongolia’s future, the Mongolian people came together with great courage to transform a one-party communist dictatorship into a pluralistic, democratic political system.” Americans aren’t interested only in lofty ideals. Mongolia makes a useful hedge against Russia and China in the game of geopolitics. Currently, much of the U.S. money funneled to Mongolia is foreign aid destined for what reformers call “democracy building.” (Chinese aid to Mongolia, however, dwarfs American assistance.) But of what practical benefit is democratic solidarity if there is no economic payoff? Mongolia is booming, yet the biggest U.S. investor in the country for now is Caterpillar, the heavy-machinery maker. Indeed, Americans don’t have a big piece of any major resource deal. “The Americans dropped the ball in Mongolia,” says Edward Rochette, the American former senior vice president of Ivanhoe, who lives in Ulan Bator. “We came in naive, pontificating about democracy, anticorruption stuff. Meanwhile, the Chinese and Russians slipped in, and we were left in the dust.” Cue the new American gold rush. In recent months, a slew of high-profile U.S. lobbyists have made pilgrimages to Ulan Bator, from former Secretary of Defense Donald Rumsfeld to ex–House majority leader Richard Gephardt. The Missouri Democrat was in town in July to push the interests of St. Louis–based Peabody Energy, which wants a share of Tavan Tolgoi, whose fate has yet to be decided. One of Peabody’s biggest rivals for the bid? China’s state-owned Shenhua Energy, the People’s Republic’s biggest coal miner. That is, if the project doesn’t get bogged down for years in populist politics. Many are betting it won’t. At one of the hottest nightclubs in Ulan Bator, as a strobe illuminates his reddened face, an inebriated Western banker leans over to me and describes Mongolia as the next Gulf state–except with more accessible ladies of the night. Over the past five years, the Mongolian capital has transformed into an uneasy mashup of Soviet concrete blocks and half-finished glass towers. Shiny Land Cruisers do battle on the potholed roads with Soviet-era Ladas. A Louis Vuitton store shares a square with a statue of Genghis Khan. Yet one-third of Mongolians still live in poverty. The country’s growing wealth gap stretches from mining executives chauffeured in Hummers to destitute herdsmen who have lost their animals. Alcoholism is rife, fueled by consumption of cheap vodka and distilled fermented mare’s milk. Earlier this year, the World Bank warned that the Mongolian economy could overheat as a burst of government spending triggers inflation. Add, too, the specter of corruption, as some of the foreign investment rushing into Mongolia inevitably ends up lining private pockets. The watchdog group Transparency International ranks Mongolia 120th out of 183 countries in terms of perceptions of clean governance. “Have ordinary people benefited from our rapid economic growth?” asks Lundeg Purevsuren, a top foreign policy adviser. “Many would say they have not.” Indeed, Ulan Bator’s suburbs are ringed with tenements of gers, some pitched in abandoned graveyards or derelict factory grounds. Nature vs. Nurture The tent slums quickly give way to Mongolia’s great grasslands. On average, the nation is populated by just two people per sq km. The country feels empty, but Mongolians say they like it that way. “There’s an old Mongolian joke,” says Elbegdorj. “If you see smoke from another person’s fire, you don’t go near it. You travel far enough that you don’t see it anymore. Then you feel like you can pitch your tent.” Wherever I go in Mongolia, people use metaphors drawn from the natural world. Mongolia, I’m told, is a wolf economy. People are described as eagles or camels. Serious political analysts tell me local elections in October will depend on whether the summer is rainy. The Russian bear and Chinese dragon loom large. But many young people in Ulan Bator, it turns out, have never ridden a horse or experienced the fabled freedom a nomad’s life holds. With economic opportunity concentrated in the capital, Ulan Bator’s population has nearly doubled in less than a decade, to 1.2 million. The legendary bond between Mongolians and their land is fraying. No one wishes the harshness of a herder’s life on anyone. But there is a wistfulness in Ulan Bator these days, a yearning for a time when the rhythms of animals and seasons dictated life. “Nature is what makes Mongolia unique,” says Erdenechimeg Dashdorj, an environmental lawyer. “If we lose that, we will be like any other country.” One summer day, Elbegdorj holds a picnic with his family in the woods behind the presidential residence. There is a burbling stream, silvery birch trees and plentiful grilled meat. Sitting on a plastic chair in a mossy hollow, clutching a mug that says virginia is for lovers, the President tells me his dreams for his homeland. “I see Mongolia as a hub for Europe, Asia and North America,” he says. “We want to be an energy hub, a transportation hub, a communications hub, an agricultural hub, a tourist hub.” My mental map of Mongolia is crowded with all these hubs. I can’t help recalling that practically all of Mongolia’s exports are mineral-related. But an American p.r. rep, who has removed her Kate Spade heels for a setting more rustic than the usual presidential banquet, nods encouragingly. (Elbegdorj and Enkhbayar have dueling Western p.r. firms.) “Mr. President, what is it you told me about horses the other day?” she asks. Elbegdorj takes the cue. “Mongolia is a country where people are just getting off their horses and going to the cities for the first time,” he says, his plump figure not necessarily evocative of the lean life of a nomad. “The spirit of freedom, of independence, is in our blood.” Says the p.r. rep, with a smile: “Just like America.” We take bites of grass-fed beef. Before us, Mongolia opens up like the Wild West, laced with risk but also graced with limitless possibility. ```json [{"@context":"https://schema.org","@type":"NewsArticle","@id":"https://time.com/archive/6642272/hesitant-steppes/","mainEntityOfPage":{"@type":"WebPage","@id":"https://time.com/archive/6642272/hesitant-steppes/"},"headline":"Hesitant Steppes","datePublished":"2012-08-20T04:00:00.000Z","dateModified":"2026-02-26T16:24:43.166Z","description":"Mongolia has discovered elections and minerals. 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