April
24, 2008
Prime Minister of Mongolia
My esteemed Mr. Prime Minister:
I understand that your government is going
to decide almost in the next few days the so-called mineral
laws which precede the negotiations with the investment
agreement with the Ivanhoe Group and other mining companies.
Needless to say, my interest with the
Mongolian case and, in fact, with any other case, has
always been peaceful and long-term, amicable and fair
agreement. When I was in high school, I learned about
the famous Berlin conference of 1896 when the European
powers, namely Germany and France, decided to dismember
the Turkish empire and create the Balkan countries. The
negotiations were heated and on a particular Sunday, George
Clemenceau, the famous French prime minister, stated to
Chancellor Bismarck, that if the negotiations didn't change
he would pack his bag. Bismarck calmly looked at his watch
and turned to Clemenceau and said, "Your Excellency,
it is only three o'clock. If you hurry you can get the
7 o'clock fast train to Paris."
The Balkans were eventually created and
in 1914 was the assassination of the Hapsburg Crown Prince
Ferdinand and his wife. The first World War broke out
and over ten million people died. A few years later, the
czarist Russia collapsed and in a sealed rein, the Germans
smuggled Lenin to Petrograd to start the revolution. Lenin
replaced eventually Kerensky, the head of the elected
government, who escaped to London. He obtained an appointment
with British prime minister Lloyd George who listened
to Kerensky's complaints. He then stated, "Mr. Kerensky,
today is Sunday. Tomorrow morning Lenin and I have exactly
the same problem, how to feed the population."
And we reached the same point today in
the year 2008, that the population of the Russian and
now Mongolian, and some 30 and 40 nations in trouble,
have to face. You have to feed the population. Every age,
every Prime Minister, has its problems. But sometimes
the problems come back in the worst possible way. Feeding
the population in 1922 was a problem only for a few nations,
partially because most of the nations were totally neglected.
In 2008, Mr. Prime Minister, the word Mongolian food shortage
is not yet in the newspapers but the food shortage today
is more on the front pages, talking about almost the whole
world than ever before. Furthermore, this is not a problem
which is going to disappear. This is not a problem that
you can end with negotiations, with confrontations, but
only properly understanding that the 21st century, while
offering great opportunities including great opportunities
to Mongolia, simply has to face up to everything that
fate and circumstances deliver to our plate.
The food problem, Mr. Prime Minister,
has been on the front pages of the New York Times and
other leading newspapers for less than three or four months.
As an investment expert and securities analyst, I am however
stating to you that what is a partial solution on April
22, which happens to be my birthday as well as the birthday
of Lenin, is next to nothing compared to the problem that
you will be facing on October 22, 2008 and much worse,
you will be facing on December 31, 2009. Furthermore,
this is a problem that can only be solved with full unconditional
and intelligent cooperation of the parties involved.
Mongolia has no money. Mongolia has a
major issue on its plate to develop its mining resources
in the most equitable manner, and make the country rich.
However, in making the country rich, a new problem arose.
While in the last two or three years, the price of gold
has gone from $400 to $1,000, the price of rice increased
tenfold, the price of wheat has gone from $5 to $12, corn
has gone to $6.50, soybeans over $10, and very soon the
issue of an international water shortage will present
itself.
In this atmosphere, the plus for Mongolia
is that the price of gold can very well go to $2,000,
maybe $3,000, that the price of copper in a few years
may reach $10. The transportation can be built which enables
Mongolia and its partners to sell its mineral resources,
and because of the oil shortage, the uranium assets of
Mongolia will get greater and greater value and commercially
should be channeled to the marketplace.
We must, all of us, at any one time, understand
that the more difficult a problem is, the greater reward
would be accorded by history to those who solve it. We
will never forget the famous speech of Winston Churchill
in May, 1940, when he stated the sad fact that, "The
battle of France is over and the battle of Britain is
about to begin."
Mr. Prime Minister, the allocation of
mineral resources and Investment Agreements is on your
plate, on your agenda, but meanwhile the battle of the
food crisis, the water crisis, is about to begin. Churchill
continued, "Upon this -- meaning the battle of England
-- will depend the future of Christian civilization. If
we win, the world will continue on its path, but if we
fail the whole world, including the United States, will
live in the world of a new dark ages made more procrastinated
by perverted science."
Let us therefore brace ourselves and so
carry ourselves that if the British Empire, and I mean
now Mongolia, survives another thousand years, man will
still say this was their finest hour.
Mr. Prime Minister, the next few weeks,
like May, June and July, 1940, the same way April, May,
June, July 2008 is undoubtedly the finest hour of your
premiership as well as your governance. You have to combine
all the problems and put them together in agreement which
not only could make Mongolia rich, but will make the daily
life of every Mongolian better than it could be by unintelligent
decisions and by lack of consideration of all converging
problems that are taking place.
In May, 1940, Churchill was 65 years old.
The problems converged on his bed, where he conducted
his business every morning, were probably vital for the
world and England as it is for you every morning the problems
that affect the Mongolian people. The wise decision is
to coordinate all issues and make sure that an agreeable
and financially feasible method can be applied to the
finance agreement.
We live in a world which is called the
21st century where problems come up in countries, in governments,
in families, in personal lives, that have evaded the world
in all our history. Nobody has ever faced like you today,
sitting in the cabinet room or at your desk, or at home
in the evening if you watch television, to solve simultaneous
the food crisis which is coming and going to grow, and
the monetary crisis and the mining issues, all in one
day.
History registers that the 65-year-old
Winston Churchill prevailed under even worse conditions.
Mr. Prime Minister, you have to rise to
Mongolia's historical opportunities. Churchill found it.
I did not hear obviously but my parents told me that the
first glimmer of hope in 1940 was when the 65-year-old
Winston Churchill went to the microphone and said, "Whatever
happens in France, Great Britain will continue the war.
If necessary from Canada, if necessary alone."
Mr. Prime Minister, you have been maybe
fortunately for your countrymen, fortunately for the world,
fortunately yourself, put in a position where you are
faced with manifold problems and you have to solve all
of them together as soon as possible. There will be a
time when history will remember April, 2008 in Mongolian
history. They must learn in school, they must learn at
university, and they must say, "This was our finest
hour."
It may not amount to much, but I would
like to try. I have asked some of your ministers, your
ambassador, and I ask your daughter when she called me
from Italy, that nothing would make me better and my life
more perfect at the age of seventy, which is actually
five years older than Churchill was, than to come to Mongolia
to advise your government on these weighty issues. I have
stated that I accept no payment for my services except
expenses.
Looking back in history, there was a similar
incident when a single individual was asked to solve the
fate of hundreds of millions of people. In 1921, Lenin
asked who was the most capable practical economist in
the world and they recommended Bernard Baruch. Baruch
contacted Lenin, made it very clear that he would accept
no payment except one dollar for expenses, but they couldn't
agree on the solution to the Russian-Soviet economic problems.
I only advise, Mr. Prime Minister, to
you and your cabinet. I would have no assignment to carry
out the practical changes. However, sometimes there are
unexpected opportunities. I lived in many countries, including
South Africa. A politician is judged by performance. A
financial individual like myself is judged on his perception.
However, if you accept my offer I would make a speech
which basically says Mongolia is not alone. Mongolia has
a future. Mongolia can take advantage, like the British
did in 1940, of the great industrial power of the United
States.
Mr. Prime Minister, there is goodwill
in the world. Let us begin.
Very truly yours,
Andrew Racz
