My most notable meeting today was with officials of Mongolia’s Ministry of Infrastructure, which is responsible for two tasks that are crucial to the future of the country’s Internet sector: the drafting of comprehensive legislation on information and communication technologies, and the privatization of Mongolia Telecom. The meeting went well, I thought, and we agreed to get the drafts and documents translated into English and to meet regularly over the next week and a half to review them in detail.
But Mongolia’s Telecom privatization is already heading in an ominous direction. When the government of a developing country decides to “privatize” its telecommunications operator, it usually means that the state will allow a foreign investor to buy a controlling stake in the company that has, up until then, enjoyed a legally protected monopoly over fixed-line telephone services. (In other words, Mongolian law prohibits any other company from competing directly with Mongolia Telecom.) All too often, however, the governments in developing countries have engaged in privatization without liberalization, which means selling the telecom company without lifting its monopoly protections. This looks to be the Mongolian government’s current plan. The result would be a privately owned monopoly, which is about a thousand times worse than a publicly owned monopoly. You can understand the government’s motivation: Without monopoly protection, the company would seem creaky and threadbare and stand little chance of fetching a boffo sale price. With monopoly protection, the government can attract investors by touting guaranteed revenue streams.
For Mongolia’s Internet firms, becoming dependent on a privatized telecom monopoly would be a horrible nightmare, like dreaming you’re married to Pol Pot. Without a strong and independent regulatory authority—which Mongolia does not have, and is not likely to have in the near future—Mongolia Telecom will be insulated from government oversight and free to abuse its power to undercut Internet and cell-phone providers by, say, charging extortionate prices for access to its infrastructure. I’ve seen this happen across Africa, and the results are not pretty: huge waiting lists to set up telephone lines, intense telecom pressure for the government to crack down on innovative and cheaper Internet voice services, and massive corruption.
In Ulaanbaatar, one distinctive sight—which could either be evidence of Mongolia Telecom’s incompetence or of its brilliance—is the human phone booth. Hauling around battery-powered bulky white wireless phone contraptions, the human phone booths station themselves in public squares, along busy intersections, around bus stops. Customers can make local or international calls on a cash basis. I tried one this afternoon; the call quality was fine, but it was disconcerting to have a smiling (if uncomprehending) woman listening intently to my conversation.
One thing that struck me about the staff of the Ministry of Infrastructure is how young they are—they all appeared to be around 30. According to my guidebook, 75 percent of the Ulaanbaatar’s 800,000 people are under 35, and it shows. This afternoon, I passed a public square swarming with roaming clusters of energetic teens, organized according to the apparently universal principles of The Breakfast Club: jocks, nerds, punks, losers, in-crowd. I was nearly mowed over by a skateboarder in an “I Will Eat Your Skin” T-shirt as he hot-dogged in front of a gaggle of midriff-baring girls. Though the skateboarder looked like he could have been from any American suburb, he did something that unmistakably betrayed his Mongolianness. Tumbling from the board, he tripped against my foot, and quickly offered me a handshake as a sign of contrition and reconciliation. Mongolians consider foot-touching to be a terribly offensive maneuver; the only way to ease the transgression is to shake the hand of the offended.
If the skateboarder goes to university, masters English or Japanese, and studies engineering or computer science, he will stand a very good chance of joining the Mongolian diaspora. The scale of Mongolia’s brain drain is staggering, especially in the technology sector. A local Internet entrepreneur did some research and estimated that there are roughly 100 Mongolians working as software programmers in Tokyo. That might not sound like a lot, until you consider that there are only about 300 employed software programmers in Ulaanbaatar.
A related but happier phenomenon is what Japanese sportswriters have taken to calling the New Mongol Invasion: the amazing rise to dominance of Mongolian sumo wrestlers. The current rage is Batbayar, known in Japan as Kyokushuzan. Unlike the brute force method used by most foreign sumo wrestlers (if you’ve ever witnessed the 600-pound Hawaiian grand master Konishiki, you know what it means to crush one’s way to victory), Mongolian sumo wrestlers are praised for their grace, agility, and mastery of the traditional sumo styles. According to a recent article in Mongolia Today, Batbayar “won the hearts of Japanese fans with his cheerful personality, his renderings of traditional songs and his sniper golf strikes.” I have no idea what that last bit could possibly mean, but the success of Batbayar in beating the Japanese at their own game does inspire some confidence that Mongolians can build a better future by conquering foreign markets. If only Batbayar could be convinced to unleash a sniper golf strike on Mongolia Telecom’s monopoly.