Mongolia appears to be in a rebalancing mode toward Russia and China

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Mongolia is a landlocked country located in the heart of Eurasia. Occupying a territory of 1.6 million sq. kms., it is bordered by Siberia in the North and Gobi desert in the south thus surrounded completely by two giant physical neighbours- Russia and China. This geographical location has had a vital impact on the entire spectrum of Mongolia’s foreign policy and so relations with Russia and China have been given a very high priority.

But how did such a high priority make its entry into Mongolia’s foreign policy? Soon after Mongolia embarked on democracy in 1990 and adopted its independent foreign policy in 1994 it began to follow a balanced approach towards these two neighbours. It was so because maintaining the equidistance in relations with Russia and China was warranted, principally due to geostrategic and geoeconomic factors. The policy core, therefore, was not to adopt the line of either of these two neighbours but to maintain a balanced relationship. At the same time, Mongolia played smart by incorporating a “third neighbour” policy in what it calls a “multi-pillar” foreign policy. The “third neighbour” policy simply implies that Mongolia will no longer be dependent on only one neighbour but on as many countries and international institutions as possible apart from aligning itself with both the Northeast Asia and Central Asia.

The term “third neighbour” was fashioned in August 1990 by the visiting US Secretary of state James. A Baker while delivering a speech to support Mongolia’s first move towards democracy aftermath the first free general election held in July of that year. Later on, Mongolian foreign policy affirmed that Mongolia will focus its attention on developing friendly relations with state beyond its geographic neighbours. As such Mongolia tried to develop its relations with countries in the East and West, mainly the United States, Japan, European Union, Australia, South Korea, Turkey and India.

But the reality on the ground points to the fact that Mongolia just cannot escape from its two geographic neighbours and, hence, it has no option but to keep them balanced despite facing crucial challenges. What is important to keep in mind is that Mongolia’s economy is almost entirely dependent on China which is not only the largest trading partner but also the largest provider of foreign direct investment (FDI). Chinese businesses also dominate Mongolia’s domestic sector. China’s relations and influence over Mongolia increased mainly because of the Soviet collapse that resulted in the decline of Mongolia’s trade with Russia by 80%.

However, Russia sought to rebuild strong relations with Mongolia, particularly in the late 1990s to enhance its standing as a regional power. In 2000, Russian President Vladimir Putin made a landmark visit to Mongolia which was popularly welcomed in Mongolia as “countering China’s influence”. Russia lowered prices of oil and energy exports to Mongolia and enhanced cross-border trade, apart from writing off 98% of Mongolia’s State Debt. Since then it has become a key strategic partner of Mongolia. Despite all this Mongolia’s economic dependence on China has increased over the years in comparison to Russia. China is almost inside Mongolia through its road and rail projects whereas Russia has remained only on paper. China is getting the mineral resources as well as cheap transport in addition to a market for its business in Mongolia.

Yet, at the domestic level, Mongolia has been facing a severe downturn in its economy since 2012 which makes it more vulnerable. Although Mongolia has all the ingredients to become successful, it often lacks the political will, thus affecting the internal political scenario in terms of decision making. Nevertheless, Mongolia is a democracy and its elected representatives are answerable to the people of Mongolia. This is prominent if one looks at the recently concluded presidential runoff election held on July 7, 2017. Khaltmaagin Battulga, a businessman and a martial art star of the Democratic Party won the election after defeating Miyegombo Enkhbold, the candidate of the ruling Mongolian People’s Party. Battulga’s win over the ruling party candidate is a testimony to the fact that people voted for a change in the country’s domestic agenda as well as the foreign policy.

Considering the trends in recent elections held in parts of the world, whether it is India, the U.S., France and now Mongolia one may find that the issue of nationalism played a major role in attracting the voters. In Battulga’s case also he is considered as a nationalist. Such an image would provide him an extra edge in strengthening democracy and ensuring sovereignty as the country has had a bitter experience in the past. The new president will play an important role in maintaining a balance in the parliament dominated by the majority Mongolian People’s Party which may also help in decision making.
With the drastic change in the political life of Mongolia there may be a sweeping change in Mongolia’s relations with its two neighbours. Since Battulga is a pro-Russian, he would prefer Russia to balance the influence of China. On the other hand, China will have to play a proactive role in its diplomacy to change the “threat” perception Mongolia has against Beijing. But in a complex geostrategic set up, post-president election Mongolia appears to be in a rebalancing mode toward Russia and China, and that would be the best strategy to gain maximum benefits.