Declassified secret document uncovers Mongolia’s value in the Indo-Pacific
As everyone was focused on the fallout from the insurrection at the US Capitol, outgoing US national security advisor Robert O’Brien released a secret document that was supposed to be kept confidential until 2043.
The document reveals how Washington planned to maintain its power in Asia during Trump’s presidency – and in doing so, uncovers opportunities for advancing Mongolia’s interests in Washington, New Delhi, and elsewhere.
Under the objective of promoting the US values, Washington wants Mongolia to “demonstrate [its] own success and the benefits [it] has accrued” through upholding democratic values.
I’ll focus on two points - first, what it means for Mongolia’s relations with Washington, and second, what it says about the winds of power in Asia (and how Mongolia can harness them).
Mongolia’s strategic weathervane for relations with Washington
Taken together, this document is a strategic weathervane for Mongolia. It points to the winds of power – and opportunity.
First, it shows that the US foreign policy establishment is serious about its partnerships in Asia, no matter who is president. This is good news for Mongolia, particularly because Biden’s team includes nominees for senior positions who have been to Mongolia: Tony Blinken, the newly-confirmed Secretary of State, was in Mongolia in 2011 and spoke highly of Mongolian democracy and its partnership with the US; and Jake Sullivan, Biden’s pick for National Security Advisor, appeared in Mongolia alongside then-Secretary of State Hillary Clinton in 2012.
As this new team takes charge, Mongolia could use the opportunity to expand its partnership with the US in ways that won’t threaten its unique role as a diplomatic ‘bridge’ between regional heavyweights like China, India, and Japan.
Trade, for example, has dropped in terms of both imports and exports since a peak in 2012, and there's also a fairly large imbalance; Mongolia imported $193 million worth of goods from the US in 2019, but exported just $25 million worth of goods (although this fluctuates significantly year to year).
The Third Neighbour Trade Act (if passed) will be a good start to expanding trade relations, but there are other avenues still to explore too. The Generalised System of Preferences (GSP) program removes duties on a long list of products – attracting targeted investment in these areas could promote greater trade with the US. The US House of Representatives recently ‘urged Mongolia’ to take advantage of this program, and also ‘urged’ the US International Development Finance Corporation, a federal body that facilitates and funds private projects abroad, to expand its activities in Mongolia.
Another avenue could be to attract investment in Mongolia’s huge renewable energy resources. There is an incoming wave of support for climate action from the Biden administration, which is re-joining the Paris Agreement and appointing John Kerry (who visited Mongolia too) as the country’s first special climate envoy. So if there are any American companies with expertise in wind and solar energy development thinking of coming to the region, now is the time for Mongolians to knock on their doors - although this would need to be backed up by an inviting business and legislative environment.
Another easy way of staying in Washington’s good books is to show a commitment to values that America finds important. Conveniently, the declassified document specifies exactly what these are: “freedom of navigation and overflight, standards of trade and investment, respect for individual rights and the rule of law.”
Mongolia’s removal from the FATF grey list is a positive step in this direction, as is its forthcoming removal from the EU’s AML/CFT blacklist on February 8. Any efforts to improve the regulatory environment for international business would also be seen as a positive signal in Washington, as would any effort to improve Mongolia’s ranking on the World Press Freedom Index (where it is currently ranked 73rd).
Winds of power from the Indo-Pacific
The document can also be seen as a way of guiding Mongolia’s ‘Third Neighbour’ policy to rebalance decades of partnerships with the US, Japan, EU, India, the Republic of Korea, Turkey, Canada, and Australia.
Mongolia has focused its third neighbor foreign policy more on developed countries. But the country could invest more time and efforts in countries that will soon wield more global influence as a way of sailing with the winds of power, not against them.
The most obvious candidate is clearly India - the largest democracy in the world. The declassified document dedicates a whole page to India - Washington wants New Delhi to ‘expand its economic, defense and diplomatic cooperation with other US partners’, such as Mongolia.
Mongolia already has ancient cultural ties with India through the spread of Buddhism as well as long-standing diplomatic ties. The two countries today share democratic values.
India assisted Mongolia after China imposed tariffs on Mongolian trucks after the Dalai Lama visited a few years ago and is helping build the country’s first oil refinery.
Mongolia is also relying on India to provide a coronavirus vaccine through a recent agreement reached the highest levels of government.
There are a few ways Mongolia could expand relations with India, including greater mineral exports to support India’s infrastructure growth. Indian government ministers are clearly keen for steel companies to reduce their dependence on Australian coking coal and have reached out to both Mongolia and Russia as alternative suppliers. Obviously, Mongolia needs to improve its logistics and transport transiting through Russia (probably more costly) or China to access the open sea and reach India.
Military exercises, like one held in 2016, are another option – although these would have to be carefully thought-out given the on-going armed standoff between Indian and Chinese soldiers in the Himalayas.
Mongolia may also benefit from putting more efforts into bringing in Indian IT and solar engineers who offer more affordable solutions and technology than their worldwide peers.
Finally, India may actually provide a healthy counterbalance to Mongolia’s relations with other great powers - both immediate and remote.
So while it would be a good opportunity for Mongolia to use the document as a weathervane for the winds of power, it’s also important to remember that winds can suddenly change.
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