Page last updated at 05:40 GMT, Wednesday, 10 September 2008 06:40 UK

Why Mongolia wants more neighbours

By Philippa Fogarty
BBC News

A mix of old and new buildings on the outskirts of Ulan Batur
The Mongolian government says economic development is a priority

At a training centre west of Ulan Bator, troops from Mongolia, the US and a host of other nations are taking part in the Khaan Quest 2008 military exercises.

Over a three-week period, almost 500 soldiers and military representatives from around the world will participate in drills aimed at improving multinational peacekeeping operations.

Two hundred and twenty of the troops are Mongolian and another 100 are from the US. Representatives from Thailand, Nepal, France and India are also taking part.

As exercises go, these ones are relatively small - but they are symbolic.

They represent part of Mongolia's ongoing efforts to build ties that extend beyond its two super-power neighbours.

'Third neighbours'

Mongolia is sandwiched between China and Russia, both of which have controlled it in the past.

The Qing dynasty ruled Mongolia for more than 200 years. It absorbed swathes of the once-great Mongolian empire, including what is now China's Inner Mongolian Autonomous Region.

When the Qing fell in 1911, China and Russia tussled over Mongolia before a Soviet-backed communist government took power there in the early 1920s.

Mongolia functioned as a Soviet satellite state and served as a buffer with China. Soviet troops were stationed in the country and policy, for the most part, mirrored Moscow.


When the Soviet Union collapsed, Mongolia shifted to a free market economy and a parliamentary democracy - one which has been, in general, stable.

Today, Mongolia knows it must maintain close bonds with its giant neighbours, both of which are vital to the land-locked nation.

China is Mongolia's largest trading partner, followed by Russia. Russia supplies almost all of Mongolia's oil, China controls its access to ports. Both are major investors and both have their eyes firmly fixed on Mongolia's mineral wealth.

But the young democracy - mindful of past subordination to Moscow and China's voracious appetite for natural resources - also sees diversifying its international ties as the best guarantee of its political and economic independence.

So it has been seeking to build new relationships, both with the West and with other Asian nations, in a variety of different arenas. Mongolia calls it a "third neighbour" policy.

"No-one denies that Russia and China are the heavyweights in the region, but Mongolia has resolved since the mid-1990s to embrace 'third neighbour' countries," said William Infante, Mongolia country director for the Asia Foundation, an NGO that promotes democracy and development.

"It recognises that diverse foreign and trade relations are an element of broader stability. So although much of their trade does come from China and Russia, they are cultivating relations with a diverse field of actors."

Mining concessions

To that end, Mongolia has been expanding its engagement in international missions and organisations.

Five years ago it sent a small deployment of troops to Iraq as part of the "coalition of the willing". This deployment has been renewed annually ever since.

Mongolia also has soldiers in Afghanistan and has contributed peacekeepers to UN missions in countries including DR Congo and Sierra Leone.

It is a member of the Asean Regional Forum (ARF) and is seeking membership of the Asia-Pacific Economic Co-operation (Apec).

Perhaps tellingly, though, it has never sought full membership of the Shanghai Cooperation Organisation, a security grouping comprising Russia, China and the Central Asian nations, and remains an observer to the group.

Mongolia is also actively seeking partners from across the globe to help it exploit vast copper, gold, uranium and coal deposits. There is no shortage of willing volunteers - countries are rushing to build ties.

US President Bush on his visit to Mongolia in 2005
Several top leaders have visited Mongolia in recent years

Three years ago President George W Bush became the first US leader to visit Mongolia. The prime minister of Japan, Mongolia's largest aid donor, followed a year later, then the Australian foreign minister. Canada is soon to open an embassy there.

Trade delegates from EU nations are frequent visitors, while multinationals are already on the ground. Australia's Rio Tinto and Canada's Ivanhoe Mines are awaiting final approval on a $3bn deal to develop copper deposits in the South Gobi region.

There are problems - the country is still in the process of establishing institutions to manage its resources and ensure they benefit its 2.7 million people.

Corruption is a concern, and political battles have prevented deals from moving forward. Investors are worried about a new windfall tax and the issue of state participation in key projects.

But in terms of policy, Mr Infante says, the door is open to all.

"It is unlikely that the balance would shift away from a policy of diverse foreign investment," he said. "I don't see any country has a monopoly or disproportionate role at the expense of others."

'Bottom line'

Earlier this month Russian President Dmitry Medvedev said his country would seek to maintain privileged interests in countries that it considered within its sphere of influence.

So could Mongolia's "third neighbour" policy put it on a collision course with former masters?

No, says Dr Kerry Brown of UK think-tank Chatham House. Mongolia may want to expand its ties but it knows where to stop.

"The Mongolians are being realistic with their diplomacy and building good, positive links throughout the world," he said.

"But they know the bottom line - they can get as friendly as they like with the EU and the West, but if any kind of conflict or tension came they would be on their own."

And maintaining the status quo is in the interests of all sides; he does not anticipate any serious conflicts arising.

Mr Infante agrees. The circumstances are different, he says, both in terms of regional issues and foreign policy.

"I don't think that Mongolia has any fear that Russia would impede in its own expression of national security," he said.

So the drills taking place at the Five Hills Training Centre near Ulan Bator are not going to trigger an international incident. In fact, Russia and China both have observers there.

But they do represent the will of Mongolia to become a useful partner - and in doing so to set its modern-day identity in stone.

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11 Jan 07 |  Asia-Pacific
Country profile: Mongolia
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