Source:  Pearly Jacob                          Date: 06 July, 2010

Back in the 90’s when the doors to a market economy first opened and privatization began, tourism was the new gold rush in Mongolia. From the single State owned Juulchin Corporation, 495 registered private tour companies now stake out their portion of travelers to the vast nomadic landscape of Mongolia. ‘Untouched wilderness’, ‘pristine landscape’, ‘the last frontier’, ‘last great expanse’, are choice words and by no means false testimonies with which millions have been wooed into this country contributing to 10% of GDP.

But mining generates more than 30% of GDP, and has always been the dominant industry here. The multi-billion dollar Oyu Tolgoi has set the precinct for the government to eye more of what lies beneath as the only way to lunge the country’s economy ahead, leaving questions on the survival of those reliant on selling Mongolian soil as the last bastion of nomadic heritage.

“Mining is definitely going to impact the tourism and the ecology of the country”, says Nara Delgersuren, Marketing Director of Juulchin World Tours, one of Mongolia's largest tour operators. “It will help in some ways by bringing in more people, expats who’d want to travel and also by improving the infrastructure”.

Better roads and rail network, improved flight connections, more hotels in strategic locations and ultimately a workforce who will definitely want to enjoy their holidays, are the infrastructural developments Nara hopes for. But she is also quick to note the downside - “Of course there is the negative aspect that it will mean digging up a lot of the land”.

While mining will not yet have a direct impact on the activities of Juulchin Word Tours, 80% of their 8,000 yearly clients preferring to spend a few days in Terelj National Park, the worry is on the long term effects it has on the country that recognizes tourism as the priority sector of development.

According to Sylvain Recouras who started Horseback Mongolia in 2005, distribution of mining revenue is the most important point. “There are several examples in Central Africa where the mining industry led to a pauperization of the mass and made only the elite rich. Mongolia will have to avoid that and keep in mind other sources of income, like tourism”, he says while adding that given the vast landscape, mining and tourism can co-exist, but profits must go into preserving the fragile nomadic cultural specificity of the country or else herders will be pushed to turn to mining work.

Reaching over 150 workers during the summer, Horseback Mongolia is one of the most successful mid-range travel operators making a turnover of 1 million USD in two consecutive years from mainly French speaking clients. But Sylvain recognizes the volatility of the industry and is considering other service sector ventures targeting the growing workforce that the mining boom is estimated to bring. Most tourist companies here need alternative sources of income to maintain profits.

While skeptical about the long term positive impacts of mining on the Mongolian ecology, Peter Weinig, Director of Active Mongolia and owner of Seven Summits Outdoor Equipment Store, is candid about the business interests it could hold for his store. “Mining can provide another angle for my business. Miners will need technical equipment and good winter gear so it’s possible I can have a whole new set of clients” , says Peter while also agreeing that improved road network will mean opening more options for his adventure tours.

But not everyone is keen to rationalize the possible positive impacts of mining on the tourist sector. “Mining has been stealing the workforce away from the tourism sector simply because they can pay better and it is a more permanent job”, says Tseren Enebish of Tseren Tours, a husband-wife joint operation that started in 1994. According to her, many of the young capable foreign language speaking workers start in the tourist industry where they develop leadership skills before abandoning ship for the more lucrative mining industry as was the case with several of her employees.

“If the mining industry takes away the best Mongolian youngsters, where’s the hope for Mongolians to build tourism in the country”? she adds. Point indeed for 80% of private tour agencies are jointly owned or started by foreigners including Tseren Tours which was started with her Dutch husband Rik Idema.

Tseren also maintains a pessimistic viewpoint on hopes for infrastructural development. “Transportation networks will improve only to those areas mining developers are interested in as will concentration of hotels and other service sectors and ultimately mining means destruction of the land”, is her firm verdict.

But governmental indifference and preferred focus on the mining industry that has so far had a low record for maintaining environmental standards is considered by most operators to be the main threat. “The very fact that Tourism is clubbed with the Ministry of Nature and Environment and before with the Ministry of Infrastructure Development is a sign that Tourism isn’t a very big focus of the government”, points out Nara from Juulchin World Tours, while also admitting that lack of funds is the main reason why an independent Ministry of Tourism is not possible at the moment.

The loosening of State Control and push to privatize the industry were reasons for the explosion of private tourist firms and according to many of the better established companies, the result has been more of a decline in quality of services as many small companies compete by offering lower prices at the cost of quality. “We need better policies and strict regulations to protect the industry. There has to be a proper quality check and monitoring before handing over operator license”, says Nara.

Tseren points out examples like the ‘Incredible India’ campaign by India’s Ministry of Tourism that has had tremendous success world wide while comparing it to the Mongolian government’s comparative lackluster approach to international promotion. “We rely on our own budget to help promote Mongolia and not just Tseren Tours on our overseas marketing campaigns. Considering the promotional tours we’re doing for the country, we should be given tax benefits but that’s just a dream”, she says a trite wryly.

Tourism in Mongolia has vast potential but most of it is limited by the vastness of the land and lack of roads and transportation. As exciting as it may sound, unending days of rattling along in jeeps can be harrowing. “Many of my clients like the idea of adventure but not the adventure itself”, says Ariunbileg Myagmarjav, who runs Evasion Mongolie is a small agency aimed exclusively at French clients. As the most expensive destination in Asia coupled with lack of comfort, Mongolia does have its odds stacked up as a premier tourist destination.

Lack of investments in the sector is also understandable considering investors have only three short summer months to recoup their expenditure, points out Peter from Seven Summits. The market is currently saturated with companies offering the same itineraries and there’s no space for growth unless you offer something really unique, is the opinion of Julian Lespine, manager of Maral, the eco-tourism branch of Wind of Mongolia, pioneers of winter mushing in Mongolia.

A guide when clients approach him for specific outdoor trips be it pull-carting on the frozen Khuvsgul lake in winter or a mountaineering expedition in Summer, Julian spends the rest of his free time moon lighting as a guitarist for local bands in Ulaanbaatar’s bars. He hopes Maral can function independently one day with all the core values of an ethical eco-tourism outfit, but the threats of the mining boom and general lack of government response in tackling rural poverty and environmental issues do bother him. “When all the animals have been hunted and the lakes are full of mercury, what can you do with eco-tourism”, he points out bluntly.

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Archived Comments
2010-07-09 14:36:38
Yes,i see.
2010-07-09 20:34:27
Mongolian government needs to guarantee better wages to Mongolian workers and not demand so much for themselves