July 7, 2008

HARRISONBURG — In a feature commentary for Sunday’s edition of the Bangkok Post, Dr. J. Peter Pham, Director of the Nelson Institute for International and Public Affairs at James Madison University, accesses the significance of the June 29 national elections in Mongolia.

While hailing the overall success of the poll, the fifth since the landlocked Asian country began its transition to democracy in 1990, Dr. Pham notes that the eruption of violence and rioting in the aftermath of the election in which incumbent Prime Minister’s Sanjaagiin Bayar’s ruling ex-communist Mongolian People’s Revolutionary Party (MPRP) strengthened its position also indicates that there are “worrisome questions about Mongolia’s future,” a fact that “given Mongolia’s strategic geographic position—nestled between rising China and resurgent Russian—and given its vast deposits of minerals” holds “enormous consequences for political and commercial stakeholders” throughout Asia and beyond. The article observes:

hile the election was fair and legitimate, there is little doubt that Mongolia is now approaching a precipice. Mongolia’s prospects looked bright throughout the 1990s and early 2000s at it looked to emulate the success stories of other Asian nations, including Japan, Korea, Singapore and Thailand. These were all countries that embraced market reforms, adhered to the rule of law and welcomed foreign investment. With these reforms came economic growth and dynamism as well as integration into the broader global economy.   But in just the last few years, Mongolia has been flirting with a return to an earlier, failed model of political and economic development. The dynamic economies of the Pacific—in both Asia and North America—have much at stake if Mongolia is permitted to descend down the road toward resource nationalism and autarky, thus destabilizing the broader region. Prime Minister Bayar has a choice to make, between Russian-style statism and international pariah status, or toward openness and globally accepted norms.

s an example of the disquieting trends, the piece cites the MPRP’s attempt to rewrite investment laws after foreign firms “sunk enormous amounts of capital to build a local presence and develop previously untapped resources” as well as the regime’s threat of windfall profits taxes and its pressuring firms to hand over equity stakes in their operations—actions which together have led to a downgrading of Mongolia’s rating by international agencies.   Dr. Pham concludes that, in this context, “it is not too late for interested nations in Asia and elsewhere to help their friends in Mongolia. Sending a strong signal that backsliding on the rule of law and sanctity of contract won’t be treated lightly would go a long way toward reminding Mongolian policymakers which way the future lies.”

Founded in 1946 by Alexander MacDonald, a former OSS officer, and his Thai associate Prasit Lulitanond, the Bangkok Post, which has a daily circulation of 75,000, is one of East Asia’s most influential English-language newspapers.

The full text of Dr. Pham’s commentary, “Reverberations in Mongolia,” can be accessed by clicking here.