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Policy Preference Or A Security Priority?

Will Mongolia abandon its strategic Third Neighbour Policy in favour of closer relations with Russia and China?

Sandwiched between Russia and China, Mongolia always has a choice between policies aimed at bringing its larger neighbours closer, and diplomatic initiatives focused on keeping a strategic distance, such as the Third Neighbour Policy. The Third Neighbour Policy has become a well-known initiative since 1990, when former US Secretary of State James Baker first mentioned it during his visit to Ulaanbaatar. Baker used the term to describe the US as a reliable partner that Mongolia could trust like a neighbour.

In Part IV of Asia Society Korea Centre’s 2013 Ambassador Series, Ambassador of Mongolia to the Republic of Korea H E Baasanjav Ganbold had delivered a lecture, titled Mongolia’s Third Neighbour Foreign Policy: The Concept and Evolution. According to Ganbold, while Russia and China are the giant neighbours that Mongolia shares borders with, the idea of a Third Neighbour refers to countries other than Russia and China that Mongolia has built relationships with. During a meeting with Mongolian leaders during his visit to Ulaanbaatar in August 1990, Baker reportedly described the US as a Third Neighbour of Mongolia. The Ambassador stressed: “That was a rhetorical gesture to support Mongolia’s first move toward Democracy.” The concept of Third Neighbour was picked up by Mongolian policymakers and eventually became formalised in its foreign policy and legislation.

Balancing its relations with Russia and China on one hand with relations with other major countries is not an easy task for Mongolia. However, it is a familiar one. “In the mid 1920s, the new Mongolian Government sent dozens of students to study in Germany,” stated Ambassador Ganbold. He added: “That reflected the age old sentiment of Mongolia, to look beyond our two neighbours.” Mongolia’s decision to adopt Buddhism from India over Chinese Confucianism and Russian Slavic religions also reflected its consciousness of looking broadly in Geopolitics.

Ambassador Ganbold described the first stage of Mongolia’s Third Neighbour Policy as a success. In the early 1990s, when Mongolia began political reforms, the support of the US, UN and other Western countries was crucial to its transition to a Liberal Democracy. These Third Neighbours’ expertise in drafting legislation about the Electoral System helped establish the foundation of Mongolia’s Political System. The Third Neighbour Policy has become a success story since the early 1990s when the US and other Western Powers contributed with technical expertise to the democratisation of the Central Asian nation and its transition towards Liberal Democracy.

The Third Neighbour Policy was also an Economic Success. Donor countries helped Mongolia overcome its hardships after the sudden end of Soviet investment and subsidies, guiding the country to transition to a Market Economy. In other words, the Third Neighbour Policy contributed to the revitalisation of the Mongolian Economy severely affected by the fall of erstwhile Soviet Union (Mongolia’s largest economic partner); with the Western States guiding Mongolia toward a Market Economy.

In the last five years, Ulaanbaatar seems to be taking a U-turn in its Foreign Policy strategy, reprioritising its early Two-Neighbour Policy with Beijing and Moscow. In 2016, the three reached an agreement on the development of the China-Mongolia-Russia Economic Corridor (CMREC), an initiative aimed to better connect the three countries through infrastructure projects. This would benefit Mongolia’s quest to diversify its economic relations and reduce its Export Sector’s dependence on the huge Chinese market by developing transport lines to use the Russian port of Vladivostok for worldwide export.

For China, the CMREC would help replace Australian coal with Mongolian imports as a result of the latest dispute between Beijing and Canberra. For Russia, Mongolia’s focus on the Two-Neighbour Policy would favour the Kremlin’s plans to operate the Power of Siberia 2 aimed at transporting Russian gas from the Yamal Peninsula to China via Mongolia, leading to lower transportation costs than the current bypassing route. In a sense, the CMREC would be a game-changer for all the three countries. Hence, Mongolia is planning to abandon the Third Neighbour Policy.

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