Zuds and Mines
In February I wrote a column for Ethical Corporation on Mongolia, and specifically on the opening minerals market there and the possibilities of the country either being hit with, or escaping, the ‘resources curse’ –
A couple of follow ups on that.
Certainly for the Mongolian people the Zud is the major worry at the moment – bone-dry summers followed by winters of unusually high winds, low temperatures and heavy snows.
Zud’s appear to be becoming more frequent (climate change?) – the last struck three years in a row, starting in 2000.
The result this year has been the worst Zud in decades killing yaks, cattle, horses, camels, goats and sheep deprived of adequate grazing.
According to the UN, this year’s zud has aleft 500,000 Mongolian herders (about half the country’s total) with 50% of their livestock dead. UN agencies have allocated US$3.7mn in emergency assistance to help remove animal carcasses, replace herders’ lost income and bring them health services.
Disasters and the need for money is affecting the Ulan Batar government’s need to increase their earnings. Hence, perhaps, plans to raise up to US$1bn though a sovereign bond issuance planned for late 2010 as well as plans to list publicly held mining, energy and infrastructure assets.
Parliamentary approval is required for these moves but they look increasingly likely given the disastrous year so far courtesy of the Zud.
The debate around the ‘resources curse’ and what will happen in Mongolia remains extremely pertinent.