Kudos to NPR for this coverage:
NPR, Sept 9: Widespread Alcohol Abuse Clouds Mongolia’s Future
NPR, Sept. 8: Global Financial Crisis Hits Mongolia’s Grasslands
The second article leaves a lot to be desired in terms of reasons for the economic crisis in Mongolia- the article cites a drop in cashmere sales, which is true for nomadic herders. The nomadic way of life isn’t an accurate portrayal of Mongolia, as more than half of the 2.9 million people live in the capital alone, not to mention other urban cities. It’s just a snapshot of what’s really happening.
In short, the article completely missed the real story. Determining ways to save Mongolia from the economic crisis won’t, in fact, save Mongolia- the economic crisis isn’t the real problem.
What the article only hints at is the complete disarray of Mongolia’s banking system. It mentions Mongolia’s “seasonal economy” and the “immediate fix” in the form of mining, but fails to mention the history of the unregulated, two-tiered banking system. The term “immediate fix” is quite fitting- with the current banking system, the revenue from mining (if the legislation works in the peoples’ favor) can be only a short term solution. It would be just a matter of time before liberal lending and a lack of reserves hurt Mongolia again.
