The Phenomenon of Mongolia
25.05.2017 18:42

Vladimir Graivoronski, PhD in History, senior researcher, head of the Mongolian department of the Institute of Oriental Studies of the Russian Academy of Sciences.

Mongolia is our old neighbor. For more than 400 years Russia and Mongolia have had long-standing political, economic, commercial, cultural military and humanitarian ties dating back to the seventeenth century. We should not also forger that Ancient Rus survived the era of the Mongol invasion and had been a part of the Genghis Khan Mongol Empire for more than 200 years.

Centuries later, in the beginning of the twentieth century, on the basis of its national interests the Russian Empire supported the identity preserving initiative of the Mongols that could help them to avoid colonization and Sinicization. Soviet Russia officially recognized the independence of the Mongolian state. It was in Soviet times when the two countries developed closest allied relations.

The historical paradox is that in 1920s Mongolia was the first Eastern country to step on the socialists path of development with the support and assistance of the USSR. The country reached considerable results in the process of democratization and modernization of all the aspects of nomadic life connected with age-old traditions of the Buddhist society.

In the early 90-ies of the twentieth century Mongolia once again was the first Eastern socialist country to give up the Soviet model of development and chose the path of building a humane, democratic, civil society based on the Western model. Today many leaders, politicians and political scientists in developed countries as well as in the UN and other international bodies see Mongolia as an example of the development of democracy in socialist countries.

Modern Mongolia is one of the few developing countries that recently managed to leave the echelon of the underdeveloped countries with economies in transition and below average rate of income per capita and join the group of countries with an above average levels of income per capita (according to the classification of World Bank).

A multi-party political system (over 20 parties) has been developing in the country during 25 years. The legislation has been updated, notable success has been reached in democratization of all aspects of life of the Mongolian society and market economy development.

With the development of the mining industry over the past 15 years Mongolian GDP became 10 times higher, in 2011, the pace of GDP growth in Mongolia was 17,5%. The sate was put on the list of three fastest growing countries in the world.

However, later on, with the global economy slowing down, the demand and price on basic Mongolian export commoditites falling down (copper and iron concentrate, coal etc.) and as a result of mistakes made in the investment policy the pace of economic growth decreased significantly as to 2015. The World Bank experts predict further decline of up to 0,8% this year.

By the end of 2015, the budget deficit was more than 1trln MNT ($500 mln.). The external debt exceeded more than $20 bln. and has reached 70%. All these factors contributed to the worsening of the living standards of the majority of the Mongolian population.

The leaders of the country and the population of the state lay their hopes of overcoming the economic and social downturn on the economic turnover of several major mineral deposits (copper-gold in Oyuun-Tolgoi, coal in Tavan Tolgoi and etc.). Another option here is the resumption of price growth on copper, iron, ore, coal etc. and development of mining, creation of new Mongolian export brands like Mongolian vodka and cashmere products.

After long and heated debates in December 2015 between the Mongolian Government and one of the largest multinational mining companies Rio Tinto, an agreement was reached on the subject of financing of the construction of underground mines in the copper and gold deposit Oyu Tolgoi ($ 4.4 bln.) located in Southern Mongolia. According to, Jean Sebastien Jacques, the director of the copper and coal group of the Rio Tinto Company this agreement has brought Mongolia back to big business.

Current year was also marked by parliamentary and municipal elections that will be held on June 29th in Mongolia. Now the country is dealing with political struggle between the Democratic party, the Mongolian Peoples Party, the Mongolian Peoples Revolutionary Party, the party of Civil Courage and the Greens.

Mongolia is carrying out an independent, transparent and active, multisupport foreign policy. The country maintains diplomatic relations with over 180 countries around the world. The increased international prestige and position in modern world is proved by the fact that in 2016 Mongolia will host the ninth summit of the ASIA-EUROPE MEETING (ASEM). The leaders of 53 states are expected to take part in the summit. The president of Mongolia, Tsakhiagiin Elbegdorj has recently come up with an initiative of announcing the permanent neutrality of Mongolia.

According to the Foreign Policy Concept of Mongolia the top priority is to maintain friendly balanced relations with its great neighbors Russia and China. China has actually recently become a major trading partner and investor of Mongolia.

As for the Russian-Mongolian relations, they still preserve their multinational friendly character. The Russian-Mongolian Intergovernmental Commission is dealing with trade, economic and scientific issues. In 2008 the presidents of the two countries signed a Declaration on strategic development as well as some intergovernmental documents related to major new projects. Unfortunately the projects have not been carried out and bilateral relations did not receive powerful new incentive for development. According to the Mongolian Customs Service, in 2015 the trade turnover between Mongolia and Russia was $1.1 bln., having declined by more than 30% as to 2014.

In connection with the ambitious plans of the Mongolian Government to build a relatively large number of hydroelectric power stations on the Selenga River, a major tributary of Baikal that brings about 50% of the volume of water. According to Russian environmentalists there is a dangerous threat of shallowing and pollution of the lake. This issue was the subject of negotiations and at intergovernmental and some other levels. In September 2014 Vladimir Putin visited Mongolia on the occasion of the 75th anniversary of victory in the Khalkhin Gol, when Soviet-Mongolian troops defeated the compound of the Japanese Kwantung Army and the puppet state of Manchukuo. As a result 15 documents were signed including the restoration of visa-free regime between the two countries and modernization of the Ulan Bator Railway with free military-technical assistance from Russia. A recently approved law on the settlement of Mongolian debt can be considered one of the indirect results of the visit. In fact 97,8% ($174,2 mln.) of the debt was written off.

In 2014 on the forum of the SCO summit in Dushanbe the first trilateral meeting of the Russian, Chinese and Mongolian leaders took place. During the meeting an agreement on the establishment of a permanent mechanism of trilateral cooperation was reached. This mechanism has already started working.

The second meeting of the Russian, Chinese and Mongolian leaders, which took place in June 2015, within the framework of the SCO summit in Ufa served as a new impulse for the tripartite relationship. It was noted that the strategy of development of the three states corresponds in many spheres and are to be coordinated. Nowadays the process of coupling such major international projects like EAEC (Russia), Economic belt of the Silk Road (China) and Steppe Route (Mongolia). The story itself, the political will of the leaders of the three countries gave them a chance to work together and carry out a meaningful, promising project of cooperation for the common good.