More generally, there has been an erosion of the sense of individual and collective responsibility. Rising corruption is especially corrosive because it is happening against a backdrop of ongoing poverty and inequality. To be sure, Mongolian inequality is not extreme by the standards of, say, sub-Sahara Africa. But it has grown since the 1990s, along with the numbers of very poor. Some 60 percent of Ulaanbaatar residents live without clean water, sewage and electricity. And one-quarter of the working-age population is not employed in the formal economy.
The magnitude of untapped mineral wealth in stunning. Consider, for example, Oyu Tolgoi, a copper and gold project in the Gobi desert. Even before production begins in 2013, the sum invested in that one mine will equal two-thirds of current GDP. And almost everybody expects that most of Mongolia's minerals have yet to be found.
Windfall wealth creates temptations to corruption. Arguably worse, it undermines the discipline and institution-building needed to raise productivity and to create jobs in other sectors. Mongolia is not Venezuela or Equatorial Guinea, though -- it possesses the social capital to fight back. In the end, the country's fate will turn on whether the culture that preserved civility and unity through the long, dark days of Soviet colonialism can mute the centrifugal forces of capitalism and globalism.
SUBJECTS:
