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Foreign Executives Trapped in Mongolia

Some foreign executives are banned from leaving the country
The outskirts of Ulaanbaatar
The outskirts of UlaanbaatarPhotograph by Gilles Sabrie

Mongolia is known for its desert vastness and its ample mineral wealth. But 50 or so foreigners know Mongolia as something else: the world’s largest jail. In a backlash against outside investors, the country has clashed with at least three multinationals. Police have questioned Western and Chinese business executives and banned them from leaving until the complaints against their employers are resolved. Although the employees have not been formally charged with a crime or imprisoned, at least three have been stranded for almost two years.

Mongolia was the world’s fastest-growing economy in 2011, expanding 17.5 percent as its coal, copper, and gold fueled China’s boom. Foreign mining companies and their employees flocked to Ulaanbaatar, the capital, to make money and experience an exotic culture. Then China’s growth slowed, commodity prices fell, and the appeal of Mongolia to foreign investors started to fade. A serious rift developed between the government and Mongolia’s biggest investor, Australia’s Rio Tinto, over the cost of developing the giant Oyu Tolgoi mine. South Africa’s Standard Bank got enmeshed in drawn-out negotiations with the government. (The bank is seeking $130 million from the government for what it says were mishandled debt repayments by state-controlled and private companies.)