Friday, March 26, 2010

Border Trade with Russia

Each provinces of Mongolia, that share border with Russia, has border passage checkpoints, making locals to do trading and traveling more easily under a special program.

One of those checkpoints is Borshoo, located on Uvs province’s northern border with Tuva Republic of the Russian Federation.

A small village on Tuvan side is called Khandgait where Tuva people do trading with Mongolian retailers mostly buying Chinese goods not only to fill domestic needs but also for further re-selling to neighboring Russian regions. In the Khandgait village, there are two major food and every day goods marketplaces as well as three or four cafes where usually Russian customs officers have meal.

Most interestingly, those people who are running retail trading business in those major marketplaces are mainly Mongolians came from neighboring Uvs aimag. They go to China through a border checkpoint at the Bulgan soum of Khovd aimag to do bulk trading and re-export to Tuva, selling goods in one of those two major marketplaces of Khandgait. Goods at the Khandgait markets reach Kyzyl, capital city of Tuva Republic, at almost over priced rate.

This road of cross-border trading, if we, Mongolians, can manage well, could lead to a huge potential of economic growth in the three western aimags by using their geographic advantages.

Population of Tuva is around 330,000, equal to Mongolia Bayan-Olgii, Uvs, Khovd and Zavkhan provinces. It is 1,170km to get to Ulaanbaatar from Ulaangom, a provincial center of Uvs, by air while it takes only 460km to get to the Kyzyl by paved road. Mongolia imports wheat, flour, gasoline, and energy from Russia, but it faces many difficulties to make export to Russia, especially in export of meat.

According to Tuvinsky Express newspaper (March 15, 2010), Russian veterinary authorities banned its import of more than 2,000 breeding animals from Mongolia on the grounds of 70 percent of the breeding animals were found to have “contaminated”. But an official at Tuva authorities has said that it plans to import 65,000 live animals from Mongolia. Anyway, boneless beef is 240 ruble (Russian currency) or US$8 at a central market of Kyzyl city. Same meat is US$3 in Ulaanbaatar while it is US$0.80 in Ulaangom, which shows us business opportunities of potential market there. On one side, meat trading looks profitable, even it has strict requirements to trade, on the other side cross-border thief of animal from Tuva side has no intention to stop.

If Mongolia cooperates with Russian side in veterinary health sector, by building meat plant with European veterinary hygiene standards, there is huge opportunities to do border trading.

In the south, there is huge capacity to produce any consumer goods, while in the north there is big market ready to buy. “Re-export” – supplying Siberian region of Russian Federation with China-made goods, is real moneymaking business we can go into today. Thus, five remote western provinces of Mongolia can join into a regional economic integration.

As a rule of global cross-border trading, supplier side builds major trading marketplaces to attract cross-border traders from other side. In this sense, Davst soum of Uvs province can act as Mongolia’s Erlian.
Development of Mongolia’s re-export of Chinese goods to Tuva can save time and cost for Tuva people because it has no railway, it is more costly for transportation to do further trading with Russians in their west rather than doing business with Mongolians. This is the advantageous side of Mongolia’s remote western provinces.

Clear example of this is Uvs province has organized trade fairs a number times in the past, for which more than 4,000 vehicles lined up from Tuvan side waiting to cross the Mongolian border. Local government of Uvs province has extended periods of the trade fair from two to four days, but Mongolian side has lack of business premises to accommodate those opportunities.

It is urgent to create favorable environment to bolster cross-border trading by building modern facilitated marketplaces, hotels, food and service industries around on the border with Tuva, if we look into its market potentials and further deep into Russian domestic markets. In Tuva, unemployment rate is 28 percent, and economic condition is what we had in the 1990s but there is still huge amount of cash at the hand of Tuva people.

Prior to the establishment of cross-border trading center on the border with Tuva, there is a strict demand to build commercial establishments in Ulaangom in firsthand. A central market in Ulaangom has even yet asphalted, unfortunately, and food is sold at open-air market, where it has rows of cargo containers.

Key to competitiveness is to have high local demand, and high consumer rights requirements. It becomes easier to reach foreign market if domestic demand is fully supplied. Food and service industries need to be improved in Uvs province to accommodate all passenger volumes.
It is time to make a smart move to promote business initiatives of the local people in Uvs province.


Friday, March 12, 2010


Every time I go to Japan, I’m really impressed by their work-ethic. I respect the ever hardworking and industrious quality of its people.

Every foreigner is curious to find out and understand what really drives the Japanese people forward from within themselves. This country has been progressing and perfecting its living environment, not only in the years of its rapid economic growth, but also in the last decades of economic decline. Like we said in socialism times, “Capitalism is decaying, but its odor is so nice”. 
The tangible things they have created and designed with awesome intelligence and cleverness, including their infrastructure, their air, water and land road networks, their water supply system, circulation system, and unpolluted air in the biggest city in the world – Tokyo, in its parks, micro-surroundings, and buildings. If you pour over all these things, you really cannot find any mistake or defect in them at all– all things have been “Japanized” to perfection.

Japan is the brightest example of that the achievements of any nation, the quality of material and intellectual products consumed by its population and their social living conditions are all determined by the spirit of their individuals.

No matter which social class you are a member of, all Japanese strongly believe that they have a compulsory duty to finish any work they started to perfection. In any place you visit, you won’t see any single person who is not totally concentrating on his work, or anyone who is trying to put other things above the job he is currently working on. 

The essential spirit and root soul that forms the social life of this nation is called “bushi-do”. This is the code of conduct observed by the Samurai, which ruled Japan for over eight centuries until 1868. The philosophy and spirit of Bushido lives on, and has not disappeared like the Samurai’s themselves. Instead, it has been enriched further in terms of its concept and content, and as time goes by, by becoming the source of national energy and power of the Japanese people, and it is in all of their blood, as if it will never disappear and perish so long as the Japanese people still exist. This philosophy serves as a foundation for the present day philosophy and belief of the Japanese people, and as the principle of human relationships, which further directs and navigates all spheres of their lives, including families’ everyday life, dressing, working standards, esthetic sense, and the ability to live on only a minimal demand, even in their leisure and holiday practices. 
The Japanese understand from ancient times that tangible and intellectual worlds are closely interconnected, and if they are separated apart, or become imbalanced, then they will not comply with, or compliment each other. They believe that they must develop their intellectual minds while collecting more experience, in order to make a living. Bushi means “a warrior”, and means a way, a philosophy, collectively, that the warrior lives his life by.

A foreign man who lived in Japan for a long period of time once said to me that a major principle and doctrine of each Japanese man who managed to achieve big success in his business, is the Bushido. The seniority principle of Japanese management administration is that each boss is personally responsible for every one of his actions, treats people in an open, sincere, equal and loyal way, respects his authority and reputation, and mobilizes his strength without any limits.

Previously in Samurai times, the Japanese would serve for their lords under bushido philosophy, but today’s bushido is different now, in that now they serve for their clients and customers. Recently, Toyota president A.Toyoda has demonstrated the bushido mantra of the Japanese people, when he testified before the American congress regarding recent safety recalls.
The ethic or code of conduct that is widely accepted and observed by all in Japan, originated from the Samurai’s principle to behave in a modest way, and not to draw others’ attention on themselves, and not to boast about his skills, nor to relish his achievements gained, and always to respect others’ achievements. A popular beer ad said “A real man is always silent. Sapporo”.
If we can understand, feel and respect this philosophy of the Japanese people, we can boost and maintain our own cooperation with Japan in a complete way. If we, the more courageous and celebrated Mongolians, can write down our own form of Mongolian “bushido” – the expression of our own spirit - in a simple and understandable way, to which we must obey, in every aspect of our lives, and settle it inside, then it can significantly assist our progress and further achievements, hopefully.

Friday, March 5, 2010

Bad combination

What is the main reason and factor that makes tribes and groups of people from the same developing nation fight each other, and divide themselves into other tribes living in hostility?

This is the journey of the devil’s circle which began in ancient times. The journey, which we are doomed to live with forever and ever, takes root from a bad combination, or mixture, that occurred in that country sometime earlier. This is the combination of weak governance and big potential income.

The crisis that hit hospitals for children of all ages, in Ulaanbaatar City last week has exposed and proven again how really the Mongolian governance is weak.  Maternity houses no longer can meet minimum requirements and conditions of public hospitals, and have needed to rent facilities, leading to three children sleeping in a single bed in that rented facility.

Principal governance duty and responsibility of a democratic state is to protect life, health, property and the freedom of its people.  This  duty and responsibility means the establishment of every single standard and norm of necessary conditions and ensuring the observation of these standards and norms in a proper and strict manner. Once a law or order is established, it must serve every single person in an equal way, but sometimes it is called the government showing its power and strength.

Unfortunately, our government fails to fulfill its principal duties and heretofore had not solved many problems existing for many years. Consequently, certain social branches are in crisis and ordinary people lose lives. 

The early wave and signs of such a crisis also is happening in the education system, which is demonstrated by the fact that citizens seek to run away and escape abroad from their homeland in search of a quality education, en masse. They also seek the possibility to stay there in that foreign land, and search for a better paying job. A man never dies due to a crisis in education, but he seeks to escape from it.

However, the crisis in the health care system is more urgent, as it can potentially cause the loss of lives of many people, most importantly, infants and children. Maternity houses and children’s hospitals have lost management and it has been many years that there has been no planning or policy-making, or fulfillment in these areas. In addition, there is no hierarchical control or supervision over them, and no structure in place to impose responsibility and accountability at all levels. All these negligences have turned maternity and children’s hospitals into places where people are not healed but are infected and their lives needlessly stolen away. 

Ideally, these are supposed to be the places to which people go for healing, not for dying. Ministers and officials who are appointed by political parties and who are responsible for all of these, do not do their jobs and always change directions before doing something for the good of people. The only thing they’ve managed to do is to create an abnormal system in which they, when sick, go abroad for treatment at the expense of the taxpayers, while leaving the general citizenry to deal with the problematically afflicted hospitals here. All this proves again just how deep the crisis in the health care system is.

The next wave of the crisis is ready to hit the system of dwelling apartments and public utilities.  All hot and cold water piping systems of dwelling blocks in the capital city are totally deteriorated and are ready to erupt and cause seriouse damage to thousands of dwellers. Water and sewage pipes that must be replaced after twenty years utilization, are deliberately “forgotten” to be changed in a planned way by city authorities, and so-called apartment owners’ associations, which were privatized by the city authorities, in conspiracy.
A bad governance waits until the crisis develops and the people die, instead of planning their work and preventing the crisis. The only thing they care about is getting additional money or budget revenue for themselves while they’re in office. In addition to the current system of weak governance and unaccountability at all central and local administrative levels, it is also the time to make huge profits from mineral resources.

Authorities from a country with weak governance spend income from mineral resources for their own personal wealth, while ordinary people get poorer and poorer. As a result, the people in turn, stand up and fight against the government, dissolve the government, and in the end, the next faction takes the power. While it is not possible to determine and judge the capacity of a governance within a short period of time, the social and economic situation gets even worse while we try to judge and evaluate the capacity of that faction. Consequently, the people again remove them from power and a subsequent, equally corrupt and inefficient faction comes into power. That is how the devil’s circle begins.

In this process, those with rich wealth and capital place their wealth and capital abroad and eventually migrate (escape) out of their homeland. Those who are highly-qualified leave the country and only those who have no other choice are left to stay in the country and spend the next century fighting each other. This has already happened before many times in history. Some press even call it “The Damnation of Natural Resources”.

We, the Mongolians, should strengthen the management and governing capacity of the government in all levels and ensure institutional capacity of public organizations in order to avoid this vicious circle.

This important task must be carried out by the ruling political parties by means of punishing their members who are responsible for the above crisis, and thereby fulfilling their public, and civic duties of social leadership.