Expanding Horizons

FORUM Staff

When 200 or so Mongolian pro-democracy activists converged in Sükhbaatar Square on United Nations Human Rights Day in December 1989, there was little to portend the transformation set to unfold. From the square in the capital Ulaanbaatar, peaceful protests would sweep across the country of steppes and deserts. Within three months, Mongolia’s communist regime relinquished power after nearly 70 years.

Barely three decades after shedding one-party rule and alignment with the Soviet Union, the nation landlocked between the People’s Republic of China (PRC) and Russia has evolved into a beacon of democracy amid the dark void of authoritarianism. Mongolia is embracing that role, guided by its “third neighbor” policy of engaging with nations beyond the two with which it shares a border. The inaugural meeting of Mongolia, South Korea and the United States in mid-2023, for example, heralded the launch of trilateral collaboration in areas such as denuclearization of the Korean Peninsula and bolstering global supply chains for critical minerals. It also reinforced Mongolia’s growing strategic importance to regional peace and stability in an increasingly complex security environment, from hosting the multinational Khaan Quest peacekeeping exercise and the annual Ulaanbaatar Dialogue on Northeast Asian Security to encouraging foreign investment in the nation’s rich reserves of rare-earth elements vital to the green energy transition.

“Mongolia’s third neighbor foreign policy expands the country’s diplomatic, political, economic, security and social relations with developed and developing countries in the hopes that this would expand Mongolia’s engagement with the rest of the world,” Bolor Lkhaajav, an international relations researcher and writer specializing in Northeast Asian and Indo-Pacific geopolitics, told FORUM. “So far, this approach has been very successful and farsighted.”

ALWAYS MOVING FORWARD

Mongolia’s expansive vision has enabled its bilateral and multilateral partnerships to flourish from Europe to North America, Oceania and Southeast Asia, including joint projects across economic, environmental and cultural sectors. “The past 30 years, our democratic journey hasn’t been easy,” Mongolian Prime Minister Oyun-Erdene Luvsannamsrai said during his August 2023 visit to Washington, D.C., for talks with U.S. leaders. “But Mongolia has been and will always be moving forward.”

In May 2023, Emmanuel Macron became the first French president to visit Mongolia. Five months later Mongolian President Khurelsukh Ukhnaa reciprocated. His state visit to France included the signing of a $1.7 billion investment agreement for French nuclear fuel company Orano to develop and operate a uranium mine in Mongolia’s southeastern province of Dornogovi. During the trip, Mongolia also signed a deal with the French-Italian manufacturer Thales Alenia Space to build a satellite to enhance high-speed internet access throughout Mongolia, the world’s most sparsely populated country, with 3.3 million people, including nomadic communities, spread over 1.5 million square kilometers. The agreement calls for naming the satellite in honor of national hero Chinggis Khan, also known as Genghis Khan, whose early 13th century empire is considered one of the largest in history. “This project is an important next step towards Mongolia’s digital transformation and development of a digital economy,” Minister of Digital Development and Communications Uchral Nyam-Osor said in a statement. “It will transform the way people living across our vast country access the internet and support access to the vital services they need.”

The Mongolian and South Korean defense chiefs agreed during talks in Seoul in October 2023 to bolster security and defense industry cooperation amid North Korea’s escalating missile and nuclear threats, the Yonhap News Agency reported. Mongolian Defense Minister Saikhanbayar Gursed, who attended the Seoul International Aerospace and Defense Exhibition during his trip, reiterated Ulaanbaatar’s support of Seoul’s efforts for North Korean denuclearization.

Then-United Kingdom Armed Forces Minister James Heappey visited Mongolia in September 2023 to discuss bilateral cooperation on peacekeeping missions as the nations celebrated 60 years of diplomatic relations. “The U.K. and Mongolia have an especially close relationship: our soldiers have served together in Afghanistan and as peacekeepers in South Sudan,” the U.K. Defence Ministry said in a statement.

A month later, Vietnamese Defense Minister Gen. Phan Van Giang met with Saikhanbayar in Ulaanbaatar, where they agreed to boost defense industry cooperation and collaboration in training and military medicine, according to national broadcaster Voice of Vietnam. They also emphasized “the importance of maintaining a peaceful and stable environment for cooperation and development in the East Sea [known internationally as the South China Sea], not only for coastal but also landlocked countries.” Hanoi has denounced Beijing for violating its sovereignty in those waters through such activities as incursions by Chinese vessels and making excessive illegal maritime claims.

As its outreach blossoms, Ulaanbaatar also must tend to potentially thorny ties with its looming neighbors. The PRC alone accounts for about 83% of Mongolia’s exports, while the PRC and Russia combined provide 65% of its imports, according to the World Bank. Those two nations also sit between Mongolia and seaports where 42% of global maritime freight is loaded and 64% unloaded. “We have our geopolitical tensions … but I’m confident that our two neighbors will continue respecting our choices and the partnerships that we are developing,” Oyun-Erdene told the digital publication Politico during his U.S. trip.

Mongolia does not want to be wedged between two powers at odds, as during the Cold War, according to Earl Carr and Nathaniel Schochet, analysts with New York-based CJPA Global Advisors. “Consequently, its pursuit of a ‘third way’ and its proactive initiatives reflect a deliberate shift toward broadening its global engagements in an attempt to transcend historical limitations imposed by its geographical proximity to regional powers,” they wrote for The Diplomat magazine in December 2023. “By leveraging economic collaborations in critical minerals, forging cultural ties, and deepening relations with countries across Europe and Asia, Mongolia is establishing itself as an emerging player in the geopolitical landscape of the Indo-Pacific.” 

A CRITICAL ROLE

In 1899, a 25-year-old from the American West, newly hired as chief engineer of a Chinese mining company, traversed the interior Asian continent by caravan in pursuit of rumored gold mines — “always a case of chasing rainbows” — as well as evidence of coal, copper, iron and lead deposits. “One of these horseback journeys reached as far as Urga [now known as Ulaanbaatar], the Mongol capital in the Gobi Desert. The Mongol camps and the ceremonies of hospitality are accurately described by Marco Polo,” Herbert Hoover, who would become the 31st U.S. president three decades after those travels, wrote in his memoirs. 

Today, minerals account for about 90% of Mongolia’s exports and more than 25% of government revenue. “Mongolia’s rich endowment of copper, uranium, fluorspar, rare earth elements, and other critical minerals position it well in the global geopolitics of energy transition,” noted an October 2023 article in The Interpreter, a publication of the Lowy Institute, a Sydney, Australia-based think tank.

The accelerating trend toward clean energy — coupled with supply chain disruptions during the COVID-19 pandemic — has spiked concerns over the PRC’s dominant role in the extraction and processing of rare-earth elements. That includes the threat of Beijing cutting off access to those minerals, which are critical to technologies from electric vehicle (EV) batteries and wind turbines to satellites and fighter aircraft. Like France, other Indo-Pacific partners are collaborating with Mongolia to advance its role in the energy transition and diversify supply chains. In June 2023, government officials and industry representatives from Mongolia, South Korea and the U.S. met in Ulaanbaatar for the first Critical Minerals Dialogue, where they “highlighted the importance and potential role Mongolia could play in meeting the world’s critical mineral needs,” the U.S. State Department said.

Soon after, Seoul announced a $6.9 million investment through 2027 to provide Mongolia with technology support for rare-metals processing. Australia, meanwhile, has invested about $20 million in the past decade for “the sustainable development of Mongolia’s mining sector,” including vocational education and training for young Mongolians, according to the Australian Department of Foreign Affairs and Trade. In a joint venture with Ulaanbaatar, the Australian-U.K. company Rio Tinto in early 2023 announced underground mining had begun at Oyu Tolgoi in Mongolia’s South Gobi region. By 2030, the site is projected to be the world’s fourth-largest copper mine, producing the amount of metal required for 1,580 wind turbines or 16,400 EV batteries daily. Oyu Tolgoi, about 80 kilometers from the Chinese border, also has some of the world’s largest gold deposits, according to the industry publication Mining Technology.

“Mongolia’s vast natural resources have always been of strategic importance to Mongolia,” Bolor, the U.S.-based researcher, told FORUM. “It is an economic incentive. It is a foreign policy incentive to strengthen bilateral economic ties. It is a positive move for regional and global actors to participate in Mongolia’s green energy transition via investment, dialogues, government-owned enterprises as well as private sectors.”

QUEST FOR PEACE

In August 2003, U.S. Marines deployed to Mongolia for the first time in Marine Corps history for a new bilateral exercise focused on noncommissioned officer development and peacekeeping operations. A year before, Mongolia had joined its first U.N. peacekeeping mission, deploying two military observers to Western Sahara. By the time Khaan Quest marked its 20th year in mid-2023, the exercise co-sponsored by U.S. Army Pacific had grown to include personnel from more than two dozen nations stretching from Canada to first-time participant Laos. The two weeks of drills at the Five Hills Training Facility outside Ulaanbaatar enhanced interoperability and readiness for peacekeeping and stability operations. “From a foreign policy perspective, it shows Mongolia’s peaceful presence and initiative to be engaged in, and engage other countries in, international cooperative activities,” Bolor said. “Khaan Quest provides an opportunity to expand Mongolia’s regional and global influence, which are closely tied to the country’s peacekeeping endeavors.”

Over the same two decades, more than 14,000 Mongolian peacekeepers have served U.N. missions worldwide; with nearly 900 personnel deployed as of late 2023, Mongolia ranked 21st among 121 contributing nations. About 12% of Mongolian troops deployed on peacekeeping missions are women, well above the overall U.N. target of 9%, according to the agency.

U.S. Defense Secretary Lloyd Austin commended those contributions when Oyun-Erdene became the first Mongolian prime minister to visit the Pentagon in August 2023, noting that the U.S. would be providing Ulaanbaatar with 20 Joint Light Tactical Vehicles for peacekeeping missions. That month, Mongolia hosted forces from Australia, Nepal, Thailand and the U.S. for Pacific Angel, a humanitarian assistance and disaster relief exercise led by U.S. Pacific Air Forces. Defense cooperation also includes monthslong rotations by U.S. Army advisors into the Mongolian Land Forces Command for training and cultural exchanges. “We benefit immensely from the country experience and continuity of relationships … this persistent partnership provides,” U.S. Army Maj. Steve Morse, commander of 5th Security Force Assistance Brigade operations in Mongolia, said in an April 2023 news release.

Mongolia’s commitment to multilateral cooperation also is reflected in the Ulaanbaatar Dialogue. The annual international conference to foster mutual trust and understanding was first held in 2014 and, according to Ulaanbaatar’s U.N. Mission, can be summed up by the Mongolian saying, “A duck is calm when the lake is calm.”

However, Moscow’s unprovoked invasion of Ukraine, Pyongyang’s missile launches in violation of U.N. Security Council resolutions and Beijing’s destabilizing military maneuvers in the South China Sea and Taiwan Strait have roiled regional tensions. “On a global level, the international security landscape is becoming increasingly complex, contentious, fragmented and challenging,” Izumi Nakamitsu, the U.N. disarmament chief, said at the June 2023 conference. “Heightened geopolitical tensions, the progressive modernization of weapons systems and the lack of transparency, trust and dialogue have brought the world to a critical juncture.”

Forums such as the Ulaanbaatar Dialogue are vital in promoting confidence-building measures (CBM), which “aim at correcting faulty perceptions of motive, reducing misunderstanding about military activity, and building security cooperation and even interdependency,” Nakamitsu said. “As the confidence-building measures take effect over time, they can stabilize bilateral and regional relationships, and help clarify shared security interests, further opening the space for trust and cooperation. Ultimately, CBMs can serve as a baseline for the pursuit of legally binding measures and agreements on arms control and disarmament.”

A GUIDING LIGHT

In September 2023, the U.S. Agency for International Development (USAID) and the Ulaanbaatar-based nongovernmental organization Development Solutions hosted a forum on bolstering Mongolia’s food security against challenges including a shrinking agricultural sector, urbanization, supply disruptions, market turmoil and climate-related impacts. Temperatures are warming in Mongolia at one of the fastest rates worldwide “and other shifts in climate dynamics are already strongly impacting on lives and livelihoods,” according to the World Bank.

A natural phenomenon known locally as a dzud — heavy winter snowfall followed by severe summer drought — can devastate grazing land and has killed millions of livestock in a year. In January 2024, U.S. Ambassador to Mongolia Richard Buangan issued a declaration of humanitarian need and USAID provided funding for animal feed, cash assistance and other relief after a dzud killed about 175,000 livestock and put the livelihoods of more than 210,000 people at risk.

Since the early 1990s, USAID has provided more than $377 million for initiatives in Mongolia to promote civic engagement on issues such as transparency and anti-corruption; strengthen democratic governance; diversify the economy; and build low-carbon urban infrastructure. During Oyun-Erdene’s visit to Washington, the nations signed a five-year, $25 million agreement to broaden Mongolians’ access to clean energy and engage private sector partners in expanding opportunities for small and medium enterprises, the White House announced. USAID is providing an additional $600,000 for disaster preparedness programs to increase communities’ resilience against dzuds. 

The nations, which are marking the fifth anniversary of their strategic partnership in 2024, also signed an Open Skies Agreement for direct flights to increase trade and tourism. Under the deal, the U.S. will provide Mongolia with civil aviation technical assistance. “Ties between our two countries are at their strongest point yet and have developed on the basis of shared principles, respect for good governance, sovereignty, the rule of law, and human rights, as well as Mongolia’s third neighbor policy,” the White House said. 

Oyun-Erdene hailed the partnership’s growth and the U.S.’s enduring commitment. “And we are very proud Americans regard us an oasis of democracy,” he said. “So, for us, the United States is not only our strategic third neighbor but also the guiding North Star on our democratic journey.”