Inequalities

Hi everyone

Let’s speak today about something which will a little bit constitute a thread of this blog for the coming weeks.

I would like to tell you about inequalities and poverty here.

As you might know and recall Mongolia is very rich in raw material. Given its great size and low number of inhabitants, this constitute a tremendous wealth source, which could (just with mining) guaranty Mongolia to have a development level comparable to Southern Europe for the next 50 years.

But as it usually works in this kind of situation, a few are ending up with Ferraris and many fall into deep poverty.

In UlaanBaatar, an important luxury industry has developed. Louis Vuitton, Mont-Blanc, Hugo Boss or Ulysse Nardyn have opened shop in the last 2 years. On the other hand 70% of the population in the capital city are leaving in the Ger-district, without electricity or running water, in what can be call a slum.

So there are many reasons for that. First climate change. Most of the rural exodus is due to people who have lost their crops because of very harsh winters. Left with nothing they have to move to the city, where they can claim a piece of land, as Mongolian law guaranties it. Of course this land will be far from the city, and they will settle their yurt, without being connected to water, electricity, and having to walk sometimes kilometers to find a public transportation (if they can afford it).

So how can they survive? Well not a lot of opportunity. These people are herders, they have no particular training for a specific job, and the concurrency for low-level job is rude.

The government gives around 15$/people every month as an aid (it is not a redistribution it is a pre-"investment" of future mining revenues). This enable to survive (there is no rent to pay, and for a 5 people family 75$ can be enough for food). But of course Marx rules are there and this is part of the 2 digits inflation which has quadrupled prices in 6 years.

Besides burning coal for warming the place during the winter cost around 1.5$/day far more that what would cost central heating and this cause the city to be way over-polluted.

So what is happening to change the situation? Several initiatives are taking place and this will be the subject of a future post.

More important is that as in any developing country, rich people don’t care about poverty, and poor people hate rich people. That is not a good start for solving the problem!