The car park of Mongolia’s national stadium was gleaming with Mercedes saloons and black 4x4s as the country celebrated Nadaam, its summer festival of horse-riding, archery and wrestling.

Across Ulan Bator, a capital city that has almost doubled in size in the past ten years, the sound of the lama’s conch competed with Russian pop music. Teenagers danced with glow-sticks, and herders on horseback took to the pavements to avoid traffic and talk on their mobile phones.

Every flash of wealth – Ferraris, Hummers, cranes picking at the half-built skeletons of new hotels – revealed the beginnings of an economic boom that is expected to overwhelm Mongolia in the next decade.

Thirty-five per cent of the country’s surface, an area larger than Spain, has been licensed for mining exploration and more than 80 minerals have been discovered. With two of the world’s largest mines – one for coal, the other for gold and copper – due to open in three years, the country’s £3 billion gross domestic product is forecast to start rising by 25 per cent in 2010 and then keep growing, year on year, at the same rate.

Yet the promise of general prosperity – a chance to transform the lives of three million people, more than a third of whom live under the poverty line – is treated warily. “So many revenues, such a chance for Mongolia,” said Chuluunbataar Enkhzaya, a 33-year-old economist. “But on the other side, it might also be a big, big curse.”

The hillside of dust in Bayanhongor, 550 kilometres (340 miles) west of Ulan Bator, is called Altan Us, or “Golden Waters”. It is eaten through with so many holes that it may subside at any moment. Here and there, labouring under the sun, go hundreds of ninja miners, one symbol of Mongolia’s possible future. Named after the Teenage Mutant Ninja Turtles because of the green plastic pans they carry on their backs, about 100,000 Mongolians have taken to mining the land by hand in the past five years.

Many lost their jobs during the country’s transition from Communism and initially became traditional herders. But two devastating winters, known as dzuds, wiped out a third of Mongolia’s livestock in 2001 and 2002, and thousands of families joined the gold rush, scouring sites rejected by large mining companies for quartz or crumbs of gold.

Ninjas earn between $5 (£2.50) and $10 a day, often more than teachers, doctors and government officials. Unlike many herders, they deal in cash. This has made them unlikely heroes of the rural economy in Mongolia and a source of much-needed growth.

Robin Grayson, a British geologist who carried out the first meaningful study of the ninja phenomenon in 2003, calls them “homesteaders, little Americans, Wild West pioneers”, adding: “They emerged at a time when this country was in shock. They gave up on the Government and got on with it. They’re self-made men and women.” But there was little satisfaction in Altan Us. “Mining is not the future,” said Olonbayar, a 48-year-old woman who wore a mask as she hauled equipment up a 13-metre shaft. “I never want my children to be like me. My children will be educated.”

Further up the hill, a former vet called Batnasan, who is missing his front teeth, said: “Every night when I am in bed, I think this should stop. Every morning I go down 15 metres into a hole and think today or tomorrow I could die.”

Neither thought a mining boom would benefit Mongolia as a whole.

The spread of mining – its thirst for Mongolia’s slender water resources and hunger for land – has environmental consequences for nomadic herding, the mainstay of the country’s traditional life and economy.

In the same district as Altan Us, Lhagvasuren, a 76-year-old with a herd of more than 1,500 animals, has had to move more than 30 times this year, rather than an average two or three, to find grazing. “There is no more grass. There are too many holes,” he said. With the Gobi Desert creeping further north into Mongolia, Lhagvasuren said he planned to reduce his herd to focus on high quality goats. Other herders are giving up nomadism altogether and setting up settled farms and cooperatives.

The result, according to Peter Morrow, a banker from Arizona, who is the CEO of Khan Bank, the former state agricultural bank, could be the end of traditional herding in Mongolia. “This is the last horse-based nomadic culture in the world,” he said. “But given development, given globali-sation, given cellphones and MTV, maybe it just doesn’t survive.”

So who is steering Mongolia at this critical moment? The answer is a bickering but strongly knitted generation of politicians that has been in power largely since the fall of Communism in 1990. “The parties ruling Mongolia are not really political parties at all,” said Ms Enkhzaya, the economist. “They are two groups of people interested in money and power. They are like twin brothers.”

Politicians are perceived as the chiefs of a flimsy and endemically corrupt public sector in which even doctors and teachers expect small bribes for routine services. A poll by the Mongolian branch of Transparency International, the corruption watchdog, showed that one in four Mongolians bribed a public official in the first three months of this year.

MPs from the two parties are linked to nine of the 14 Mongolian companies involved in the Tavan Tolgoi coal-mine, which, with 7.5 billion tons of deposits, is expected to be the largest in the world when it opens in 2010.

A recent no-confidence motion split the ruling Mongolian People’s Revolutionary Party (MPRP) – the former Communist Party – and weakened the Government of President Namba-ryn Enkhbayar. But a car crash on the eve of Nadaam, in which Tsakhiagiin Elbegdorj, the popular former Prime Minister and current leader of the Democratic Party was critically injured, was a blow to reformers.

It is into this arena that a new crowd of Mongolian environmental and civic activists is moving, pressurising the Hural – the national parliament – with protests in Ulan Bator’s main square. A new political movement, called the Mongolian Civic Union, which will run in next year’s elections, was also formed. It is led by Dangaas-uren Enkhbat, a former software engineer and TV host. He says that the domination by Mongolia’s two largest parties cannot last.

Changing values

— Mongolia’s economy is growing by about 7.5 per cent a year

— G-Mobile plans to equip 180 rural settlements there with mobile phones by the end of the year

— Zeest, a Mongolian company, began importing whisky from Scotland this year. Genghis Khan Scottish Whisky comes in two strengths: three-year-old Silver Label and twelve-year Gold Label

— Hilton Hotels announced plans last year for the Hilton Ulan Bator, scheduled to open in May. It will have 240 rooms, a ballroom and four restaurants and bars

— The Mongolian State University of Science and Technology has entered into a partnership with the Swiss International Development Agency to process Mongolian mare’s milk into beauty products

— A new £10 million Tiger Beer brewery, the first foreign brewery to be built in Mongolia, will produce 60,000 bottles a day and provide 150 jobs

Source: mongolia-web.com

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