Mongolia Looks to Middle East

Mongolia has been courting resource rich Middle Eastern countries. Will its aggressive PR campaign work?

J. Berkshire Miller

Mongolian President Tsakhia Elbegdorj has just finished off an important visit to the Middle East looking to forge new partnerships with wealthy Gulf States flush with petro dollars. The trip, which included stops in Kuwait and Qatar, was aimed at attracting investment dollars into Mongolia’s burgeoning economy.

While in the Kuwaiti capital, Elbegdorj met with the emir, Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah and discussed how the countries can expand their relations. As Mongolia continues to grow as an international player, it has been rapidly expanding its diplomatic press with potential wealthy investors. In 2009, for example, Mongolia opened up an embassy in Kuwait City that was reciprocated by the opening of a Kuwaiti embassy in Ulan Bator the following year.

Elbegdorj aimed high during his visit by targeting the state-owned Kuwait Investment Authority (KIA), one of the world’s biggest sovereign wealth funds with equity of over $200 billion. The director of the fund explained Kuwait’s interest in Mongolia by noting that both countries are continually “exploring the possibilities of cooperation in infrastructure, agriculture and minerals sectors.” The KIA essentially acts as steward and investor of Kuwait’s massive petroleum income by searching the globe for lucrative long term investments. The KIA director acknowledged that Mongolia and Kuwait “are located far apart from each other,” but stressed the common linkages and emphasized Kuwait’s desire to “explore all possible investments and implement them in practice.”

Mongolia has been pressing Kuwait and the other Gulf States for years now with an aggressive public relations campaign illuminating the benefits of doing business with the growing Central Asian economy. However, the charm offensive has thus far not resulted in a large influx of investment from the region. The KIA and other powerful sovereign wealth funds in the region have expressed concerns about a lack of information and research needed before making a comprehensive investment. There are also real questions about the obstacles to private sector investment in Mongolia’s hallmark sectors such as mining and agriculture.  

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Politics has also been playing a role in Mongolia’s outreach efforts. Earlier this year, Elbegdorj railed against authoritarian regimes in the Middle East and expressed solidarity with Arab Spring movement. This position wasn’t altruistic, however, as Mongolia has an interest in promoting democracy in its own region, which is dominated by kleptocratic holdovers from the Soviet Union. Elbegdorj has been heralding his nation’s brand as a democratic strategic ally in Central Asia. Mongolia’s international diplomatic push is based around increasing its economic ties with both emerging and established markets with deep pockets.

This summer, Mongolia took over as chair of the Community of Democracies – an international group of democracies or states that are democratizing. Mongolia is proud to represent these ideals and is shrewd in celebrating its status in order to further its ties to foreign investors. Elbegdorj emphasized this point with his trip to Kuwait and followed through with the democracy caveat while in Qatar to attend a United Nations session on the “Common Values of Democracy and Civilizations: Role of Education of Democracy.” He told the audience in Doha that “Mongolians history of peacemaking through acceptance of all religions was as significant a policy as our idea of democracy today. Freedom is what’s valued most by nomadic people, that’s why the basis of democracy is so strong in Mongolia.” We’ll see if his words are listened to and – more importantly – if Mongolia is able to continue its delicate tap dance around authoritarian states with flush bank accounts. 

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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