Today, Mongolia is at the threshold of further transformation driven by the exploitation of its vast mineral resources. While GDP is expected to accelerate at a double digit rate over the next four years, the biggest challenge for the country is to find a way to ensure sustainable and inclusive growth, limiting the effects of “Dutch Disease”, reducing poverty and thus offering equal opportunities to all.
-The profoundly positive effect that democracy has had on Mongolia and its international diplomacy
Mongolians are indeed proud of achievements of our democracy and freedom. Before the democratic revolution in 1990, Mongolia had centrally planned economy and had no possess of the private property system but everything belonged to the central government. Since 1990 Mongolia has been the most vibrant and stable democracy in the region which has been conducting reforms at all fronts-political, economic and social-concurrently. As you know, the democratic constitution was confirmed in 1992 and our path to be a democratic nation started. Mongolia aimed to have market economy and since then, we have been having success in both economy and politics so far. The national asset got to divided to private property and many different kinds of individual property appeared. Today Mongolians are the genuine owners of their properties. The private business helped us to develop the economy a lot and freed the political way. Today, more than 80% of GDP is produced by private sectors and we can’t be more proud of it.
Since Mongolia’s transition to democracy and free market, Mongolia hasbeen striving to implement a multi-pillared foreign policy within the principles of internationally accepted norms and practice. We have had many achievements in the past two decades. In 2011, Mongolia adopted its new Foreign Policy Concept, which outlined its “third neighbor” policy. Within the framework of this policy, the country aims at broader multilateral interaction and strengthening its participation in various international fora.
-Nations efforts to ensure sustainable and inclusive growth for the social welfare of its citizens.
Mongolia officially became a “middle-income country” in 2011. In recent years, it is also one of the world’s fastest growing economies. Our economy grew by an unprecedented 17.5 per cent in 2011. The growth moderated to 12.3 percent last year after global economic slowdown weakened demand for Mongolia’s main export commodities. But it is still among the highest in the world.
This all came as a result of consistent economic policies. But it was also driven by the mining boom, as the mining sector has, indeed, attracted the bulk of foreign investment (72.6 per cent). Therefore, there is, certainly, a danger that other countries view Mongolia primarily in light of its natural resources. But we are doing our best to minimize this danger by focusing on infrastructure and industrial development to build a diversified productive base and value chains.
As you know, infrastructure and industrial development require massive funding. To secure the funding, Mongolia successfully sold 1.5 billion USD last November in its first government bond offering. The Parliament’s resolution that authorized the bond offering expressly stipulated that the capital sourced from the bonds shall not be used to cover the budget deficit or for social welfare, but shall be used instead for long-term investment in large-scale projects in mining, transport, energy, communications, construction, industrialization and finance.
Let me give you an example of what we are doing in the area of in infrastructural development. The main focus is currently on the development of transport and transit infrastructure given the fact that Mongolia’s landlocked location is having a very negative impact on the competitiveness of its exports. We are developing 5 transit corridors to Asia and Europe economies and implementing large-scale projects to that end, namely:
a) A new railway network that will transport goods to APEC economies along with the current Trans-Mongolia railway.
b) A new road network connecting Mongolia’s northern border point to the south.
c) Gas pipeline (currently at the conceptual level).
d) Oil pipeline (currently at the conceptual level).
e) Electricity transmission level (currently at the conceptual level).
With these transit corridors, Mongolia can become a bridge connecting Europe and the Asia-Pacific region and the shortest destination to either of them. We are working together with our foreign partners on these large-scale projects.
The main goal of our infrastructure and industrial development efforts is to reduce reliance on the mining sector and transform Mongolia’s “extractive economy” towards an economic model that creates value locally, increases overall productivity and benefits the broader population. When this goal is accomplished, we will have a competitive diversified economy where minerals are not the country’s only attraction for foreign investors.
The other priority is to foster more inclusive economic growth to ensure that all Mongolians share the benefits of high economic growth.
-Mongolia’s strategic role in Asia and in the relations between China and Russia
Development of friendly relations with Russia and China is a priority direction in Mongolia’s foreign policy. In accordance with itsForeign Policy Concept, Mongolia seeks to promote balanced relations with its two neighbors while not adopting the line of either of these two countries. We think that we have been quite successful in adhering to this principle of a balanced relationship in general.
Mongolia is developing strategic partnership relations with both of our neighbors. Strategic partnership is the highest level of cooperation Mongolia so far has reached with a foreign country. Nonetheless, we think, there are huge potentials to further boost our cooperation with both Russia and China.
Mongolia’s geographic location has long been regarded as somewhat of a disadvantage, given by landlocked location. However, today we tend to see our location as an advantage bearing in mind the vast opportunities that Chinese and Russian markets offer us. China’s demand has hugely contributed to the rapid economic growth Mongolia has witnessed over the last years. Russia is also seen as an important market for our market.
One of the priorities of the foreign policy of Mongolia is given to the development of relations and cooperation with countries of the Asia – Pacific region. In terms of the geographical location, as you know, Mongolia is both Northeast Asian and Central Asian country. For Mongolia, which has a great interdependence with the Northeast Asian countries in political and economic terms, it is indispensable to maintain mutually beneficial and closer cooperation with these countries in order to provide its further development. At the 55th UN General Assembly, Mongolia formulated and forwarded the setup of a permanent mechanism of political dialogue with the Northeast Asian region and since then it has been working on promoting this issue. Meantime, Mongolia encourages any initiatives taken by other countries in this direction.
At the initiative of the President of Mongolia Ts.Elbegdorj, the leaders of Mongolia and the Republic of Korea put forward a new mechanism of cooperation, namely, Asian Partnership Initiative for Democracy in 2011. This was an important step taken in the spirit of the aforementioned policy. The initiative taken by Mongolia while chairing the Community of Democracies, was a timely measure which has attracted other countries.
To lend an impetus to the initiative, the first consultative meeting of Foreign Ministers of Asia and the Pacific was initiated and hosted on my part during the VII Ministerial Conference of the Community of Democracies which was held in Ulaanbaatar this April. The foreign ministers of the region came to terms with hosting the meeting once every two years. I think that the meeting laid the foundation for such a mechanism with more institutional character.
Mongolia has a vested interest in taking a constructive part in integration processes in the Asia-Pacific region. Mongolia is currently a member of the Asia-Europe Meeting (ASEM) and ASEAN Regional Forum (ARF). In addition, Mongolia is an observer in the Shanghai Cooperation Organization.
Our regional agenda is also centered on becoming a dialogue partner of ASEAN and joining the East Asia Summit, which has become a crucial part of Asia-Pacific integration. Mongolia has been seeking APEC membership since 1993. Mongolia supports foreign investment in all sectors of the economy. It has one of the lowest tax rates in the Asia-Pacific region.
-Mongolia’s positive “third neighbor” relationships
The world community of democratic nations supported Mongolia’s transition towards democracy from the very beginning. We are thankful for that. The concept of “Third Neighbor“ means the whole community of democratic states in the West and East supporting our democratic transformations which are vital for Mongolia in achieving its basic goals of development. This concept is not oriented against our two neighbors. By the concept of “Third Neighbor” we do not mean a single given country. However, we do mean a group of Western and Eastern democracies and international organizations, Mongolia’s international aid donor and stakeholders in a broader sense which support democratic nation-building and have vested interests in Mongolia.
We think in terms of developing a Third Neighbor policy vis-à-vis industrially developed countries, including the USA, EU countries, Japan, Korea or countries of East and West. These countries belong to Mongolia’s international aid group which has vested interests in Mongolia’s democracy-building, economic progress and prosperity. We wish to develop strategic partnership with all of them.
The comprehensive partnership based on shared values and common strategic interests between Mongolia and the United States of America develops successfully, including political, economic as well as military fields. Mongolia and Japan launched the Strategic Partnership toward 21 Century. Mongolia and Republic of Korea adhere to the comprehensive partnership. With India we agreed to elevate our relations to a new level of “spiritual partnership”, taking into account centuries-old ancient cultural and historical inks that we have. With Canada we reached relations of “expanded partnership”. Partnership agreement between Mongolia and European Union was just signed among the European nations with Germany we have a comprehensive partnership agreement also.
-Mongolia’s responsibility as mediatorand peacekeeper and the government’s strategy to position the country in the new world order.
As a Northeast Asian country with an internationally recognized nuclear-weapon-free-status and pro-active foreign policy, Mongolia firmly stands for a nuclear-weapon-free Korean Peninsula and considers it an important condition for durable peace and security in Northeast Asian. We advocate resolving the Korean Peninsula’s nuclear issue by peaceful means in the framework of the Six-Party Talks. We stand ready to do whatever is in our capacity to support their early resumption. Besides of the humanitarian aid that Mongolia is being offering to North Korea Mongolia has been playing a role of “honest broker” in that sense.
In order to make contributions to promote six-party talks in the light of the policy for ensuring security in Northeast Asia, Mongolia provided a venue for the meeting of working groups for normalizing Japan-North Korea relations in 2007 and 2012. Mongolia will take further efforts in this direction, in particular, we are ready to host meetings of certain working groups within six-party talks.
To strengthen peace and security in Northeast Asia, it is crucial to ensure stability in the Korean Peninsula. Mongolia is greatly convinced that providing peace and stability in the Korean Peninsula meets common interests not only of Asia-Pacific region, but also international community. In this regard, Mongolia strives for making its contribution to the solution of Korean issues by means of effective dialogues and for translating into reality the Ulaanbaatar Dialogue onNortheast Asian Security.
Mongolia plans to open its diplomatic mission in Jakarta which is hub for productive activities of Asia-Pacific and East Asian regions. I have no doubt that this would help strengthen Mongolia’s position in the region.
Besides, Mongolia is convinced that Afghanistan will in the future play a decisive role in building stability and security in Central Asia. Mongolia has been dispatching its contingents to Afghanistan since 2003. In 2010, Mongolia was officially recognized as the 45th country with UN mandate sending its troops for ISAF which is headed by NATO. Today Mongolian peacekeepers are serving in Afghanistan. Mongolia backs an international community’s decision on withdrawal of international troops within 2012 and transferring domestic security responsibilities to Afghanistan. Taking this opportunity, I would like to inform that Mongolia has taken a decision to resume our diplomatic mission in Kabul.
As for the UN peacekeeping activities, this year we are celebrating the 12th anniversary of Mongolia’s participation in the UN Peacekeeping Operations. If we started in 2002 by sending only two military observers, over the past ten years more than 5000 peacekeepers have participated in different PKOs. At present, Mongolia has deployed over 800 troops in South Sudan which constitutes the largest contribution of Mongolia to peacekeeping operations.
The UN Security Council adopted on 21st January 2013 the Resolution 2086 on Multidimensional peacekeeping. Mongolia will support the implementation of this resolution by contributing military and police personnel with the professional skills, training and integrity required to fully implement their mandates and operate in ever challenging environment.
Mongolia is making every effort to facilitate the training of peacekeepers, to enable their rapid deployment to peacekeeping operations around the world. Thus, we established a National Peacekeeping Center “Tavan Tolgoi” near the capital city of Ulaanbaatar. We are working to transform this Center into a regional peacekeeping training site in order to strengthen the capacity of the United Nations to sustain and manage peacekeeping operations.
-The evolution of Mongolia-United States relations in recent years.
The relations between Mongolia and the U.S. have been developing significantly in relatively short span of time given that the diplomatic relations was established in 1987. The U.S. has always been supportive of Mongolia’s transition to democracy from its very beginning. As clearly reflected in the Concept of Mongolian foreign policy, the first and foremost, it is to maintain and develop strategic relations with our two neighbors and secondly to develop third neighbor policy with other countries including the U.S., EU and other Asian developed countries. Therefore, the U.S. is one of our “third neighbors”. Mongolia and the U.S. are aiming to develop comprehensive partnership and cooperation which encompass strengthening of ties in various areas such as politics, security, economy and culture as well as at the multilateral level.
I wish to note that the U.S. Vice President Henry WalIace visited Mongolia in 1944. Therefore, the visit of the U.S. Vice President Joe Biden was the second visit.
Many Heads of State extended their congratulations on the successful organization of the Mongolian Presidential election in 2013 and the U.S. President Barack Obama was one of the firstto congratulate.
-The areas in which you would like to see the Government of Mongolia and the United States working more closely together
If you look at the statistics of 2012, the U.S. is our third biggest trade partner after China and Russia and our 8th largest investor. This is the evidence that the bilateral relations is enhancing not only in political and humanitarian sectors, but also in trade and economic sectors.
During the official visit of the President of Mongolia, H.E. Tsakhia Elbegdorj, to the U.S and the visit of the U.S. Vice president, Joe Biden, to Mongolia in 2011, both parties underscored the importance of actively promoting the bilateral cooperation in economic sector and expressed their interests in collaborating to create an investment and business environment which enhances the cooperation for Mongolian and U.S. enterprises.
In September 2013, me and United States Trade Representative Michael Froman signed an Agreement on Transparency in Matters Related to International Trade and Investment between the United States of America and Mongolia in New York. The U.S.-Mongolia Transparency Agreement applies to matters relating to international trade and investment and includes joint commitments to provide opportunities for public comment on proposed laws and regulations and to publish final laws and regulations. This publication commitment includes the obligation to publish final laws and regulations in English, which should make it easier for U.S. and other foreign enterprises to do business in, and invest in, Mongolia. This agreement represents an important milestone in the U.S.-Mongolia trade relationship.