Mongolia Eyes Russia Ties

With an eye on increasing its energy security, Mongolia looks to boost trade relations with neighbour Russia.

J. Berkshire Miller

Mongolian President Tsakhiagiin Elbegdorj recently finished up a week-long state visit to Russia that included stops in Moscow and St. Petersburg. Elbegdorj was greeted by Russian President Dmitry Medvedev in Moscow on May 30,and the two discussed a broad range of issues ranging from a potential free trade agreement (FTA) to bilateral defence cooperation.

While the visit was somewhat symbolic – marking 90 years of bilateral relations – it also came with a set of clear objectives from each side.

Russia is keen to increase its level of trade with Mongolia as both parties continue to explore the possibility of a Mongolia-Russia FTA. Medvedev noted that bilateral trade between the two had surpassed the $1 billion mark, which represents a 40 percent increase from 2009.

Mongolia, meanwhile, remains transfixed on energy security issues and is determined to improve its relationship with the Kremlin to ensure a smooth flow of energy (petroleum) from its northern neighbour. Elbegdorj emphasized the importance of Russian energy imports by explaining the detrimental effects that interruptions to the supply chain have on Mongolian industries, including the agricultural sector, and even the smooth running of the public transit system in Ulan Bator.

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The national interests of Mongolia and Russia intersect on these two issues. Russia invests heavily in Mongolia’s booming mining sector and continues to be an important player in the country’s ambiguous plans over developing a domestic nuclear industry. The Mongolian government is focused on how to exploit its minerals and energy resources with the help of foreign investors – of which Russia is one of the biggest stakeholders.  

Aside from trade and energy relations, the visit also underscored bilateral defence cooperation, which is of great importance to both countries as both see the region as increasingly unstable. As Richard Weitz recently noted here, Russia is extremely concerned about instability in Central Asia and is looking for credible partners on defence issues. Regional uncertainty is also a concern for Ulan Bator, but its primary focus is on China’s continued military ascendency and all the implications that go along with this. As a tacit response, the Mongolia government has cultivated defence relationships with other regional players such as Japan, South Korea and the United States.

Mongolia has historically been both blessed and cursed by its geostrategic location between two great powers. This recent visit demonstrates that it will continue to work towards achieving a balanced relationship with the two by enhancing its relationship with Russia and diversifying its exports to other markets outside of Beijing.

J. Berkshire Miller
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J. Berkshire Miller

J. Berkshire Miller is an international affairs professional with significant expertise on security, defense and intelligence issues in the Asia-Pacific region.

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