Need to Know

January 24, 2023

Twixt the Bear and the Dragon

Mongolia

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In Mongolia, Dulamsuren Demberel worries about her family’s budget. The price of coal has increased by 40 percent in recent months as post-pandemic inflation and the Russian invasion of Ukraine have roiled energy markets. Nomadic herders like her live in tents that use coal stoves for warmth when winter temperatures in the landlocked Central Asian country’s vast plains can dip to minus 24 degrees Fahrenheit, Al Jazeera reported.

As a result, it’s easy to imagine why frustration among herders like Demberel and other Mongolians – one-third of whom live in poverty – boiled over after hearing how corrupt Mongolian officials allegedly stole almost 400,000 tons of coal that they then sold in China for $120 million. The scandal involves three state-owned coal companies that are now under investigation, added the Associated Press.

Last month, protesters stormed government buildings in the Mongolian capital of Ulaanbaatar, Reuters wrote, giving vent to their frustration over the twin banes of unsustainable price increases and greedy political cronies profiting off their hardships. The protests evinced problems in Mongolia but also showed how its voters actively participate in their democracy, argued Modern Diplomacy.

“A lot of government members are richer and live (more) luxurious lives than the citizens, and how could they just be so calm when the citizens are buying bread by (the) slice, not by the loaf?” said one protester. “That’s the reason why I’m protesting today, for the good of the people.”

It’s no surprise that energy is stoking civil unrest in Mongolia. A former Soviet satellite that, like much of Eastern Europe, was communist until the early 1990s, the country still imports all of its gas from its neighbor, Russia. Mongolian officials are now seeking to reduce that dependence, noted Sky News, but progress has been slow because it has few other options.

Mongolia also produces oil. But because it has no refineries, it must export its black gold to its other gigantic neighbor, China. The country similarly depends on coal exports to China, wrote the Global Times, a Chinese Communist Party-owned newspaper.

That relationship goes back centuries. Chinese emperors ruled the country for 300 years until Mongolia gained independence in the early 1920s. Pursuing a self-described “third-neighbor” foreign policy, Mongolian leaders recently sealed a deal with India to finance a proposed oil refinery, for example, added the Diplomat.

Mongolian officials can’t do much more, it seems, given their historic and geographic position. Demberel will have to wait longer for relief.

This story originally appeared in the January 24, 2023 newsletter, Twixt the Bear and the Dragon.