Investing in Entrepreneurs

This is exactly the kind of thing we'd like to see a lot more of in Mongolia. I'll let Mercy Corps's press release speak for itself (italics mine):

MANDALGOVI, Mongolia -- Small-time cashmere trader Davaasuren suffered through Gobi Desert droughts and freezes while dreaming of starting a business. He wanted to supply his town with eggs, but he lacked money for chickens. Portland-based Mercy Corps aimed to help Mongolians out of poverty, but the humanitarian organization avoids handouts that foster dependency. So Mercy Corps introduced Davaasuren -- who like many Mongolians, goes by one name -- to XacBank, a commercial bank that the nonprofit launched four years ago.

Now a loan from XacBank, pronounced "hassbank," enables the 29-year-old entrepreneur to sell fresh eggs, replacing those trucked in from the capital under the former socialist system. More XacBank loans allow scores of Gobi Desert herders to survive by launching small shops, factories and gas stations.

The idea of a humanitarian organization establishing a for-profit bank might seem as far-fetched as the presence of a tree in the harshest region of Mongolia. But nonprofit development organizations have funded commercial enterprises in places ranging from Romania and Haiti to Aceh, the tsunami-battered area of Indonesia.

Humanitarians may be new to the profit ethic, but they like the idea of creating incentives and of founding banks and businesses that last far longer than one-time grants. They acknowledge the commercial approach bypasses the poorest of the poor, but they say other conventional programs already address those needs. "The reason you own the for-profit companies is because you want to make something sustainable and last forever," says Ed Epp, Mennonite Economic Development Associates vice president for resource development.

Instead of awarding grants in Nicaragua, for example, MEDA bought a bank and redirected it to make small loans. In Haiti, the group founded a credit union that's become the nation's largest.

Mercy Corps goes a step further. It trains Mongolian herders and others, helping them prepare business plans and apply for loans. Then Mercy Corps guarantees some of the collateral so that XacBank, or a competing bank, can assume less risk and charge lower interest.

In an added twist, Mercy Corps links some of its global beneficiaries -- including Davaasuren, the egg man -- to donors with business experience. Western entrepreneurs who donate $10,000 shares to Mercy Corps' Phoenix Fund can advise on business plans and visit projects financed by the fund....

Mercy Corps' objective is not to move nomads off the range. It aims to diversify incomes, stemming migration to Ulan Bator, the nation's swelling capital. "Herders realize they can't afford to be a single-product kind of business," says Steve Zimmerman, Mercy Corps Mongolia country director. "They can produce dairy goods, make furniture, run gas stations."

This is great, great news. Among other things, it addresses a number of problems in Mongolia. Namely,

1. It seeks to foster financial independence instead of dependency. In other words, it helps foster an ownership society, at least in a small way.
2. It has a long-term view: don't give them a fish--teach them how to fish.
3. It addresses the problem of exorbitant interest charges by lowering risk to local financial institutions. I've heard reports of people in Mongolia borrowing money to start businesses and paying well over 100% in yearly interest on it.
4. It links local entrepreneurs to experienced business people and has what looks to be something like a business mentoring program.
5. It seeks to preserve Mongolian culture intact and stemming the unsustainable tide of job-seeking migrants to UB from the countryside.
   

While large scale business investment in resources, etc. are great (see previous posts), small scale investment in ground-level business people is just as critical. I look forward to seeing where this takes us.

Read more...

A Study in Frustration

I can't describe how galling it is to read this item from Xinhuanet. It would hardly be more ironic if France became the leading center of British studies.

HOHHOT, Aug. 21 (Xinhuanet) -- China is the leading center of Mongolian studies in the world, according to experts convened at the International Symposium on Mongolian Studies, which closed in the capital of north China's Inner Mongolia Autonomous Region Sunday.

More than 330 scholars of the Mongolian studies from 13 countries and regions attended the three-day academic meeting, which collected 240 thesis papers covering linguistics, translation, culture studies of the language as well as the latesttrend of economic, military and archeological development in the Mongolia-speaking regions.

Professor J. A. Janhunen of Helsinki University said China is in a very important position to offer materials for Mongolian Studies.

Janhunen witnessed that Chinese scholars in the sector have hadincreasing contacts with their foreign counterparts in recent years. "Many scholars from China's Inner Mongolia University studyin Germany, Britain, France and also in Finland. I had two doctoral students from the university in my institution in Helsinki."

The Finnish professor, who first visited the Inner Mongolia Region in 1986, said that the international meeting held in Hohhotwas better organized and larger than most previous ones, which showed that the Mongolian studies had received more attention fromthe Chinese government and also the regional government of Inner Mongolia.

One anticipates the day when Mongolia becomes heralded as the academic center of its own heritage. Perhaps I'm giving too much credit to this report, but I don't think it's that far off base. Regardless, I wonder how scholars who are Mongolian would weigh in on this. Baabar, are you reading this?

Read more...

Ties strengthen with the UAE and Turkey

Connections between Mongolia and oil-rich Middle Eastern states are more than apparent in Mongolia. One more connection was recently formed when the United Arab Emirates ambassador to Mongolia presented his credentials.

Turkey is also continuing to show interest in Mongolia, particularly in the textiles and food sectors:

ANKARA - Turkish Labor & Social Security Minister Murat Basesgioglu stated regarding his visit to Mongolia, ''we want to prepare an infrastructure aiming to help Turkish workers who will work in Mongolia as well as Turkish entrepreneurs who will invest in this country.''

''We will also rapidly arrange basis of working life and social security for these initiatives,'' he added....

Basesgioglu stated, ''11 Turkish companies have made investment worth of nearly 1.4 million USD in Mongolia. Annual foreign trade volume between Turkey and Mongolia is nearly 3.1 million USD.''

''Foreign trade volume between the two countries is not at desired level. We aim to provide necessary infrastructure to help Turkish entrepreneurs who will invest especially in mining, construction, textile and food sectors in Mongolia,'' he added.

I've always thought that the food sector (especially livestock) is something that a smart investor in Mongolia could captitalize on. Mongolia really ought to develop this market. It could be a potential source of sustainable growth that fits well with something the Mongol nomads have been good at for thousands of years.

Read more...

Mongolia and Kazakhstan to Strengthen Ties

News from Kazakhstan:

ASTANA. September 13. KAZINFORM./Dulat Moldabayev/ Today Extraordinary and Plenipotentiary Ambassador of Mongolia to Kazakhstan Ravdangiin Khatanbaatar has handed credentials to the President of Kazakhstan Nursultan Nazarbayev. We have intentions to develop trade and economic relations of the states, Mongolian Ambassador said. "We will purchase petroleum derivates and grain in Kazakhstan”.

“There are many Kazakhs residing in Mongolia and lots of Kazakhs from Mongolia are living in Kazakhstan. This fact will contribute also to the development of mutual benefit collaboration,” the diplomat added.

Here's to more cooperation between the Kazakhs and Mongolians, Mongol brethren.

Read more...

Mongolian in Vietnam War

I just discovered here that a Mongolian, Cpl. Enver Bajin, was killed in the Vietnam War:

Cpl. Enver BAJIN116426657/6055 USMC was from College Point, New York. He was born on Dec. 27, 1948. He arrived in Viet nam on July 23, 1970. He was 21 years old at the time of his death on Nov. 18, 1970. He died as a result of a Helicopter crash on land, in Quang Nam Province, due to Hostile fire. His body was recovered. He was single. His race was Mongolian.

His name can be found at The Vietnam Veterans Memorial (official page here; unofficial page here) in Washington, D.C. on panel 06W, line 67.

Semper Fi.

Read more...

Still Busy

Things are still boiling. When they simmer down, I'll turn up the gas on blogging again. Thanks for the patience.

Read more...

Why I Love America: Follow Up

United News of Mongol apparently reproduced all of Mongol's post, "Why I love America." The reprinting elicited a number of interesting comments over at their blog. Check it out.

Read more...