(A summarized version of Jargalsaikhan .D’s remarks given at Harvard University on 8 march 2018)

Good afternoon everyone. Thank you for coming, in spite of the snow outside. Also, thank you to Harvard Professors Mark C. Elliott, Vice Provost for International Affairs, and Anthony Saich, Director of the Ash Center for Democratic Governance and Innovation, for organizing the lecture today and inviting me to speak.

I believe that peace and prosperity comes from political and economic freedom. And I believe that fighting for that freedom is a duty.

Political freedom is achieved with democracy, and economic freedom is enabled by the free market. Democracy and the free market are a great platform for innovation, and together they bring about peaceful and prosperous livelihoods. This is how countries achieve development.

Mongolia started this journey 28 years ago, which was a stroke of luck for us. But we are increasingly realizing that the journey is not an easy one and has its bumpy turns. I wanted to talk about this with you today. I spent half of my life in a communist society, and the other half in a post-communist society. So there is a lot from which I can draw comparisonsand try to find conclusions.

Communism and Mongolia from 30 years ago

Thirty years ago I was having a walk along the shore of Lake Geneva. It was March 1988. I remember it well because it was the beginning of the Prague Spring, which signaled the disintegration of the communist system. At the time I was based in Prague, representing Mongolia in the International Student Union, which brought together student unions from the Eastern Bloc. Switzerland was the first capitalist country that I ever visited. On the same evening I spent a long time walking, trying to see what I had been taught all my life with my own eyes – how capitalism created beggars, violence, and thieving. But I did not see anything that came close to any of those. The very same capitalist system I was told was collapsing seemed very peaceful and glamorous. I did a lot of thinking that evening and felt that I had been misinformed for my entire life up to then.

Soon afterwards there was a big demonstration held by students in Prague. It was supported by the wider population who wanted political freedom. It didn’t take long for their government to be replaced as the communist party was disbanded. The same thing happened to socialist countries one after another. Eventually it came to Mongolia in 1990. When Mongolians sent Russian soldiers out of the country and cut Russia’s aid, we were looking for a brand new political and economic system to overcome the deep economic shock that took place. In this democratic revolution, I led the students’ demonstrations.

Socialism had to collapse because it denied private ownership and acknowledged public ownership only. In a centrally planned economy, all consumption is regulated and decided by the government, for example, how many shirts you would wear in a year and what color they would be. I remember a police officer coming to our home and confiscating an anvil my father used to make rings and earrings to make ends meet. They considered that my father was breaking the law by running a private business and took his tools away.

All decisions were made by a group of elites under the name of the ‘political bureau’. The decisions that they had already made used to be symbolically approved by the People’s Assembly unilaterally as their 400 members all agreed to whatever decision that was tabled. This is how our political system was back then.

At the beginning of 1990, Mongolia changed its constitution and started the transition to a democracy with a free market. This transition has been very complicated, and we have had our highs and lows on the journey. In the last 28 years we replaced our government 14 times and had an economic crisis in 13 years out of 28.

30 years later

Two weeks ago I walked along the shore of Lake Geneva once again. It had been thirty years since that memorable walk before. I noticed that the same cars I spotted on Switzerland’s streets back then are now driven on Mongolian roads. I thought about what a significant change Ulaanbaatar has gone through in the time period and how it turned into a modern, glassy city. However, we also have things that Switzerland does not, an example of which is traffic jams. Mongolians are now dressing as well as anyone from another country. But, a big difference to Switzerland is that Mongolia has a huge gap between people’s living standards.

Mongolians are not taking full advantage of the political and economic freedom we have obtained. We have yet to learn how to develop our democracy and work the free market economy. Democracy is not a set outcome such as a free election, but a continuously developing process centered on people. The foundation of democracy is not the state or government, but the people, something we have not fully grasped yet.

The principles of the free market ought to have made state ownership smaller, but Mongolia’s state ownership has been growing bigger. The so-called state-owned companies have actually become political-party owned companies. Wealthy people who donated more money to their political party are managing their own companies and choreographing themselves or their associates to be appointed to senior positions in the government. Our country is being led by people who pay, but not the people who have skills and talent.

Prices are the essence of a free market economy. In Mongolia, prices have been set not by the market, but by the government. It has become common for corruption cases to disappear despite the noise they initially make or how many there have been. Powerful people are no longer abiding by the law, and the rule of law has been lost. Our judiciary has now long been dependent on politics. Our legislative, executive, and judiciary branches are not providing oversight on each other, and there is no healthy balance. One quarter of parliament members are acting as cabinet members at the same time. It is referred to as ‘wearing a double deel’ in Mongolia. Our largest two political parties, who have had the ruling power in turn between them, no longer have any difference in ideology and principles.

The press, which is supposed to be the voice of democracy and the free market have already come under the control of politicians and sponsoring banks and corporations. Mongolia currently has over 400 media outlets, but 70 per cent of them are owned or influenced by incumbent senior government officials or former politicians.

As the free market stops functioning and government becomes corrupt, our external and internal debts have been growing while foreign investment has shrunk. As a result, Mongolia has sunk deeper into debt. Our government debts now amount to 70 per cent of our economy. With no other options in sight, Mongolia received help from the International Monetary Fund, which keeps increasing our total debt with cheaper loans.

The government has been trying to implement unrealistic populist programs such as price stabilization and overly cheap housing mortgages. It led to bubbles in the housing market and devalued the national currency. In the last three years poverty has grown from 20 per cent of population to 30 per cent. This is where our 30-year transition to democracy has taken us today.  

Despite this grim reality, majority of Mongolians agree that democracy and the free market are the right path for us. What we need to do now is strengthen our democracy by improving the transparency of government activities, drastically increasing public oversight, having broader discussions on draft laws before they are passed, and fighting corruption. We also need to increase economic freedom, introduce oversight by turning state-owned companies into public companies, free prices, reduce taxes, and increase our economic competitiveness.

We are on a tough journey, but we are pressing forward non-stop.

Boston, Massachusetts, United States

(Full version can be accessed here)

(Full podcast version is available at Harvard Ash Center Soundcloud) 

2018.04.04