Given Mongolia currently has about 2.8 million people with an average annual income under $3,000US, one can appreciate why they are facing a cashflow squeeze.

Quite apart from the graft, the lying, the cheating, the rampant alcoholism, the primative populist politics, the mob violence and still unattended epidemic poverty for a meaningful proportion of their population, perhaps the biggest challenge facing Mongolia today is the sin of false pride.

There is so much strutting, theatrics, this constant referencing of the glorious past (which is an ambiguous moral history to some of us looking at it as foreigners).  The reality as we all know is that Mongolia has virtually no ability to "go it alone" either in capital, technology, or even skilled labour required to unlock the magnificent treasure chest of natural resources in their country.  The Russians and Chinese hold out options, but Mongolia (wisely in my view) wants to pursue a third neighbour poilicy to improve their independence from the two giants and principal trading partners that face them on either side.

And pride, national and personal pride, is why I would caution anybody who thinks just allowing the IA to be broken and having recourse to International Arbitration or the International Court in the Hague would be satisfactory.  The loss of face for Mongolia would be tremendous.  It would poison relations and the Mongolians have proven time and again they are willing to suffer quite severely in the name of stubborn pride.  It is no long stretch to see a national character in part formed by the barren and harsh open grasslands, capable of stoic stubborn survival in the face of adversity.

This most recent transparent charade by the MPRP is a case in point.  They could not stomach being a part of the government while the final stamp of truth was put on the corruption of their party and their leader.  But everybody in Mongolia knows how things are run and done there.  Nobody was being fooled.  It was quite simply done because they personally couldn't stand by without some emotional demonstration to distance themselves from the event.  Pure theatrics based on some weird notion of honour or obligation among themselves and to seemingly avoid public humiliation.  The Cosa Nostra have nothing on these guys.

But if they are handled gently, with patience and good humour, and with iron resolve, I believe they come around to practical, pragmatic reality, and so long as they can maintain their face, in fact great friendships and loyalty can develop.  It is just a matter of time.  I am confident RioT has lengthy experience dealing with people of varying character around the world, and that they will do all in their power to prevent any confrontation that will injure the success of the partnership at OT.

The truth of the matter is the Mongolian people find themselves as a poor people financially, negotiating with wealthy people, and they are highly sensitive to being slighted or embarassed in any way.

In a few years the tables will be turned when massive sovereign wealth funds from Mongolia are trotting around the world buying up assets and lending great bocks of foreign reserves to other countries.  It is almost inevitable they will follow the path of countries like Kuwait and some of the Emirate States.  But they need to play ball now to get in the game.

cg