Crossroads Asia

Mongolia’s Third Neighbor Policy Blooms

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Crossroads Asia

Mongolia’s Third Neighbor Policy Blooms

“2015 marked increasing diplomatic engagement for Mongolia in East Asia, the Persian Gulf, and even the Americas.”

Mongolia’s Third Neighbor Policy Blooms
Credit: Ulaanbaatar image via Julia Baturina /

While Mongolia is located in the northeast region of East Asia, its “third neighbor” foreign policy is poised to allow Ulaanbaatar to boost bilateral and multilateral diplomatic relations with countries around the world. Land-locked between two politically, economically, and militarily powerful nations — Russia and China — Mongolia’s third neighbor policy by no means will exclude these neighbors. Instead, the strategic policy framework intends to use a soft-power approach to international relations as a modus operandi to tackle developing vital sectors such as education, science and technology, mining, and energy infrastructure.

The year 2015 marked increasing diplomatic engagement for Mongolia in East Asia, the Persian Gulf, and even the Americas. Last year, the Mongolian Ministry of Foreign Affairs (MFA) turned the third neighbor policy into bilateral dialogues and agreements with a number of nations, including but not limited to Hungary, Iran, Brazil, the United States, and Japan.

Meanwhile, the Mongolian Cabinet has worked closely with the Ministry of Education and Science in compliance with Cabinet Resolution 71, which granted a number of scholarships and financial assistance opportunities to study abroad in leading professions such as, mining, engineering, and economics. For example, the Mongolian Ministry of Education and Science and Hungarian Ministry of Labor has signed an agreement covering 2,000 students for the Stipendium Hungaricum Scholarship Programme of 2016-2017. Likewise, an “Educational Cooperation Agreement” was signed with the Brazilian Ministry of Foreign Affairs to admit Mongolian students to graduate level programs to further support Mongolia’s educational development. These educational agreements have corroborated the strategic objectives of Mongolia’s third neighbor policy while advancing bilateral agreements not only in the educational sector but also in the mining and energy industries.

Mongolia has also been active closer to home. Geographically, Japan has become the first “third neighbor” of Mongolia. Increasing Chinese influence in the region has forced Japan to seek new levels of partnerships and economic alliances, thus opening the door for Mongolia and Japan to upgrade their ties. In October 2015, Mongolian Prime Minister Ch. Saikhanbileg and Japanese Prime Minister Shinzo Abe signed a Memorandum of Understanding (MOU) for major economic cooperation and development of mining and infrastructure at Tavan Tolgoi, including a railroad. These mega-projects will not only strengthen economic ties between Mongolia and Japan but have a direct effect on employment and support for domestic workers. Furthermore, U.S.-Japan-Mongolia trilateralism is making its way into the policy framework, providing a complement to plans for a Mongolia-Russia-China economic corridor in Northeast Asia.

The most important goal of Mongolia’s foreign and domestic policy is to become a major energy source in the Far East. These agreements show significant progress in Mongolia’s influence in the region, demonstrating the strategic significance of the third neighbor policy. Landlocked Mongolia’s foreign policy now stretches out to many sectors, including oil and energy in the Persian Gulf.

Mongolia imports 90 percent of its oil from Russia, making Russia the strongest energy market in Northeast Asia. With a number of exploration licenses given out by the Mongolian government, however, there have been discoveries of crude oil in the country. Mongolia’s third neighbor policy will play its part in the exploitation of these resources, within the legal framework approved by parliament. Meanwhile, the third neighbor policy is also creating transit transportation arrangements so products can be exported to or imported from third neighbors, changing Mongolia’s energy landscape. In December 2015, for example, Mongolia and Iran  signed an agreement allowing Mongolia to import Iranian oil via Chinese companies.

Therefore, Mongolia continues to strengthen geopolitically advantageous economic and transit ties with Russia and China. In 2011, high level of bilateral transit agreements were signed by the Ministries of Transportation of Mongolia, Russia, and China. The transit agreements will allow Mongolia to export to third countries using Chinese and North Korean shipping ports. Although it will require heavy lobbying and high level meetings, the Chinese-implemented “Belt and Road” economic initiatives will have greater geopolitical influence in Mongolia, Russia, and Japan if these countries come to legally-binding agreements to cement the policy in Northeast Asia. One of the greatest advantages of Mongolia’s ‘third neighbor policy’ is the opportunity for pari passu, allowing Ulaanbaatar more influence in shaping such agreements.

Mongolia’s newly implemented ‘third neighbor policy’ is one of the more innovative foreign affairs approaches in the country’s history. As the global political sphere changes rapidly, Mongolia’s political stability, economic developments, non-traditional national security environment, and far-sighted foreign policy strategies are crucial for continuing its democratic transition and keeping up with new developments in the Asia-Pacific. The challenges ahead are great, but with lessons learned from both developed and developing countries, Mongolian leaders and policymakers do not have room for oversights.

Bolor Lkhaajav formerly worked as a Global Security Analyst with Horizon Intelligence (Hozint).