Mongolia forced to choose sides as 'friends' fight

Following the pandemic's interruption of in-person diplomacy, Mongolia has re-activated its engagements with both immediate and so-called “third” neighbors like the US and Japan.

Since China is the country's most important trading partner, Mongolia has been trying to stay away from the current US-China dispute. The US is building an alliance (through the Quad and other avenues) aimed explicitly at curbing China’s ambitions. For Washington, Mongolia is a natural member of the pro-US camp; hence Deputy Secretary of State Sherman’s trip to Ulaanbaatar this weekend to strengthen the Indo-Pacific partnership.

Mongolia did its best in 2020 to keep opportunities open in all directions by donating 30,000 sheep to China, meat to Russia, and PPE to the US. But Ulaanbaatar realizes that there is no sweet spot where it can keep Beijing, Moscow and Washington all happy at the same time.

Credit: Edgar Maldonaldo via Twitter
Credit: Edgar Maldonaldo via Twitter

Foreign Minister Battsetseg wowed Russian officials during her maiden visit in June by speaking confident and fluent Russian. The trans-Mongolian gas pipeline project (representing potentially $1 billion in transit fees annually) was a key point for discussion for the Mongolians. But Russia seems to not be fully committed to the idea. For example, Russia’s second-largest natural gas producer Novatek thinks it’s more realistic to liquefy gas from the Yamal fields.

Also, for Moscow, it’s essential that a new gas transit route goes through a country whose leader is reliable and loyal to the Kremlin.

President Khurelsukh, who took all credit for progress on the pipeline project, is working to demonstrate that loyalty to Putin as the celebration of centennial relations between two counties approaches in November.

Fresh from her Russian tour, Foreign Minister Battsetseg is visiting Beijing next week. Mongolia has a more urgent issue to iron out with China than the transit pipeline project. Cross-border shipments of raw commodities continue to experience delays and excessive restrictions by Chinese officials due to Covid. Finance Minister Javkhlan has warned that the state budget could go deep into the red unless coal shipments return to normalcy.

Mongolian officials have been careful and mum about sensitive topics like Xingjian, Taiwan and Hong Kong supporting the One China policy.

However, Beijing may soon want Mongolia to make a clear-cut strategic choice between China, Russia and the US. For example, on the selection of the next Dalai Lama, Beijing seems to be pressing Mongolia to accept and recognize a candidate to be picked by the Chinese Communist Party.

Foreign Minister Wang Yi would probably probe Minister Battsetseg to learn about Sherman’s trip to Ulaanbaatar and US plans for Mongolia. Also, Wang is keen to have a glimpse of President Khurelsukh’s foreign policy vision.

Meanwhile, under the pretext of the Olympic games, Prime Minister Oyun-Erdene is visiting Japan this week. He cheered Mongolian athletes at the Olympic ceremony in Tokyo and met the Japanese emperor, Prime Minister Suga and other officials. The Mongolian government’s press statement read that Oyun-Erdene asked for funding for large infrastructure projects, including a hydrogen power plant. But the Japanese press covered only the part where Suga noted cooperation with Mongolia on the issue of N.Korea’s abduction of Japanese nationals.

Japan is a leading member of the US alliance and almost 40 percent of Mongolians think of Japan (almost twice more than China) as a key partner in the future. Therefore, Japan may play a key role in Mongolia choosing to side with the US camp.

Mongolian policymakers want to keep options open when it comes to picking sides between the US and China. However, according to the Edelman survey, the Mongolian public is not interested in global affairs and they probably care less about these geopolitical tensions.

Yet, faced with a financial crunch, Mongolian decision-makers may choose to go along with their top trading partner as the struggle for supremacy between Washington and Beijing intensifies.


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