The Genghis Khan Equestrian Statue tells plenty. The 131-foot stainless steel behemoth towers over the wind-swept Mongolian steppe 30 miles east of the capital city of Ulan Bator.

Built and paid for by a private tour company, the statue honors the founder of a great transcontinental empire. It also exemplifies the newfound pride Mongolians feel about recent democratic and capitalist reforms that have transformed their country.

The sparsely populated nation of 3.2 million discovered in recent years it had a cornucopia of iron, coal, copper and silver, even ultra-rare ore like uranium and fluorite. The estimated value of it all runs into the trillions of dollars.

Instead of jubilation, Mongolia’s recent windfall from mineral resources caused a lot of hand wringing among its political class and fierce debate in recent elections. After the so-called “resource curse” laid low energy-producing nations in the 1990s, Mongolians worry resource wealth could actually hinder economic growth, as well as exacerbate corruption and atrophy in other economic sectors.

“Of course we understand the risks,” said Mongolian Ambassador to Korea Baasanjav Ganbold in an interview on July 1 at his office in Hannam-dong, Seoul.

“Mongolia is working hard on the country’s legal framework for investment in its strategic sectors including mining. (The legal framework) should be very finely tuned so that regulations do not to scare off foreign investors but, at the same time, also establish clear limits.”

From jagged 14,000-foot mountain peaks in the west and north, slopping south and east into rolling steppe, the country is estimated to have about 130 billion tons of coal.

Mongolia is getting rich quick. It averaged annual economic growth of 4.5 percent since independence and democratic reforms in 1991 but, since 2004, that number surged to 9.4 percent.

Mongolia had the fastest-growing economy in the world in 2011 with a 17.5 percent growth rate. Though it tempered somewhat, the economy still grew 12.3 percent last year, the world’s fourth-fastest rate. Good times have compelled some to dub Mongolia a “Wolf Economy,” inspired by the Asian Tiger moniker of the 1980s.

The country had per capita income of more than $3,000 in 2012, a huge increase from just $450 in 2000.

Fast money means the country faces tough challenges in the form of corruption ― as part of the “curse” ― and the benefits of the boom economy not being shared evenly. Some 30 percent of the population still lives below the poverty level of $1.25 a day.

Transparency International ranked Mongolia 94th out of 176 countries surveyed in its 2012 Corruption Perception Index. Among the 28 nations in TI’s Asia-Pacific grouping, Mongolia was 14th.

On June 26, Mongolian President Tsakhiagiin Elbegdorj eked out reelection with 50.23 percent of the vote, just barely preventing a runoff against rival candidate B. Bat-Erdene who garnered 41.97 percent.

The election was essentially a referendum on Elbegdorj’s pro-foreign investment strategy to develop the country’s mining sector and his campaign against corruption. Ganbold said Mongolia could avoid the resource curse.

“Mongolia’s advantage is that the general public is very aware and conscious of what is happening in the economy. Mongolia’s press is free and the legislature is careful,” Ganbold said. “So, together these three factors ― public awareness, an aggressive press, and an active legislature ― will guarantee that the economy will go in the right direction.”

Mongolia is a landlocked nation closed in by China and Russia. Since the 1990s, it has tried to counterbalance the influence of its two big neighbors against so-called “third neighbor” countries.

“Mongolia has always emphasized developing relations with those countries that lie beyond our immediate geographical borders, countries such as Japan, the U.S. and European and Southeast Asian nations,” he said.

As director-general of the Asia-Pacific Affairs Division of his country’s foreign ministry, Ganbold helped guide Mongolia’s “third neighbor” policy from 2008 to 2013.

Ganbold is a Moscow-trained Korea expert with experience working as a diplomat in North Korea from 1989-1993. He arrived here at his current posting in February, and described South Korea as one of Mongolia’s most important “third neighbor” countries.

Two-way trade between Mongolia and South Korea totaled $500 million in 2012, making Korea Mongolia’s fourth-biggest trading partner after China, Russia and Japan. Korea is also Mongolia’s seventh-largest investor with cumulative investments of $300 million.

Korea is involved in major projects including Samsung E&C’s plan to build a new international airport in Ulan Bator scheduled to be completed in 2016. POSCO is now putting the finishing touches on a deal to build Ulan Bator’s fifth coal-fired power plant.

Korean companies will also get a piece of a sprawling $10 billion development project in Sainshand that will include coking coal plants, a copper smelter, factories producing iron pellets and cement and facilities to process food and make clothes.

Located in the eastern Gobi steppe, 300 miles southeast of Ulan Bator and halfway to Beijing, China, the thinly populated Sainshand looks to be transformed into a mammoth industrial park that will also include a power distribution network and a wastewater facility.

Ganbold said bilateral relations got a boost when former President Lee Myung-bak visited in August 2011. Lee upgraded ties to a “comprehensive partnership.”

People-to-people exchanges are at a moderate level with about 100,000 people traveling between South Korea and Mongolia in 2012. Some 26,000 Mongolians live and work in South Korea and an additional 5,000 study here at universities around the country. About 3,000 Koreans live in Mongolia.

By Philip Iglauer (ephilip2011@heraldcorp.com)