Afterword: Mongolian-made capitalism

ABSTRACT

Oligarchy (oligarhi) has become a well-worn Mongolian term for describing the social order. Real power and wealth is now said to be monopolized by a small number of super-elite families. The roots of this oligarchic capitalism lie in the process by which ownership was acquired and concentrated so as to take control of companies, rather than simply making profitable investments. The emergent form resembles Thomas Piketty's notion of ‘patrimonial capitalism’, a political economy dominated by inherited private capital, rather than the wealth created by entrepreneurship or innovation. Mongolian capitalism can also be seen as patrimonial in another sense. Its roots lie in the opportunistic struggle over a form of national patrimony: the enterprises and resources inherited from the previous political economy. The new proprietorial class already appears faintly dynastic, and presently there seem to be no barriers to the transmission of wealth to the next generation of super-rich.

KEYWORDS:

• Mongolia
• capitalism
• oligarchy
• political economy
• postsocialism

Acknowledgements

The author would like to thank Tuya Shagdar, Rebekah Plueckhahn, Dulam Bumochir and Nick Evans for their helpful advice and comments.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1 Rising prices for copper, gold and coal fuelled growth in the first decade of the twentieth century, before the drop in global commodity prices in 2008 led to recession. Prices rose again in 2010–11, and the headline GDP growth spiked again at 17% before falling back to close to zero in 2016.

2 World Bank (http://www.worldbank.org/en/news/press-release/2017/10/17/2016-poverty-rate-in-mongolia-estimated-at-296-percent).

3 The national poverty line is MNT 146,145 (USD 60) per month (see World Bank figures in the previous note).

4 The official English-language name of the ATG is the Independent Authority against Corruption. Here I have used a more literal translation of the Mongolian.

5 The conglomerate is now one of the major shareholders of the Mongolian Mining Corporation, the largest privately owned coal-mining company in Mongolia, which became the first Mongolian company to offer its shares internationally since it was listed on the Hong Kong Stock Exchange in 2010.

6 Economists Marshall, Nixson, and Walters (2008: 19), for example, argue that faith in the trickle-down effect is misplaced in the Mongolian case.

7 The Mongolian Mining Corporation’s annual report for 2016 (http://www.hkexnews.hk/listedco/listconews/SEHK/2015/0420/LTN20150420367.pdf) details the multiple controlling shareholder positions of the board of directors in a number of companies.

8 World Bank (https://data.worldbank.org/indicator/SI.POV.GINI?locations=MN).

9 For a press report see Sonin News Agency 2014 (http://www.sonin.mn/news/easy-page/33903).