July 10, 2018
Mongolia
Overview
Command and the Mongolian Armed Forces (MAF) hold
Mongolia is a landlocked nation of 3 million people
an annual multinational peacekeeping exercise in Mongolia
between Russia and China. It is often viewed as a
known as Khaan Quest. Khaan Quest 2018, the 15th such
democratic success story both among former Soviet satellite
event, focused on peacekeeping and stability operations and
states and in Asia. In 1989, democratic activists staged
involved 1,134 MAF personnel, 200 U.S. military
protests against communist rule and formed the Mongolian
personnel, and participants from other countries including
Democratic Union. The Mongolian People’s Revolutionary
China and Russia.
Party (MPRP), which had ruled the country since 1921,
allowed multiparty elections in 1990 and relinquished
In January 2018, the United States and Mongolia held
power in 1996, when a Democratic Party (DP)-led coalition
bilateral consultations in Ulaanbaatar, in which the two
of opposition forces won nationwide elections. Since then,
sides discussed cooperating on the international response to
the Mongolian legislature and presidency have peacefully
North Korea’s nuclear and missile programs, bilateral trade
exchanged power several times.
and investment, and the finalization of a second Millennium
Challenge Compact for Mongolia. Mongolia also was
Mongolia’s foreign relations are driven by a desire to
recently added to the list of countries eligible for the H-
preserve the nation’s autonomy by balancing relations
2A/B visa program, which allows foreign non-agricultural
between major partners, including the United States, the
workers to enter the United States on a temporary basis. In
People’s Republic of China (PRC), and Russia, and also
April 2018, the United States, Japan, and Mongolia held
Japan and South Korea. Its economy is supported by
trilateral discussions focusing on regional cooperation.
extensive mineral resources, but growth remains uneven,
driven by fluctuations in mineral and petroleum prices.
Figure 1.Mongolia at a Glance
U.S.-Mongolia Relations
The United States established diplomatic relations with
Mongolia in 1987, and Mongolian leaders describe the
United States as Mongolia’s most important “third
neighbor”—countries that do not border Mongolia but have
close relations with it. Polling indicates Mongolian
perceptions of the United States are largely positive.
Mongolia’s relations with its former patron Russia remain
close, and many Mongolians regard Russia with some
affection. At the same time, they remain wary of China,
their largest economic partner. Mongolia’s official relations
with China largely have been amicable, with the exception
of periods of tension and pressure from Beijing following
visits to Mongolia, a traditionally Tibetan Buddhist country,
Sources: Central Intelligence Agency, The World Factbook, 2018. Map
by the Dalai Lama, the exiled Tibetan spiritual leader whom
created by CRS, 2018.
the PRC government asserts aims to split Tibet from China.
Mongolians participate in programs of the Open World
Leadership Center, a U.S. congressional agency whose
The U.S. government views Mongolia as an “emerging
mission is to introduce rising leaders of 17 Eurasian
partner” and as a country with which it may cooperate to
countries to U.S. governing and free market systems.
achieve a “shared vision of rules-based order in the Indo-
Mongolia’s legislature is one of 21 parliaments worldwide
Pacific.” The State Department’s Congressional Budget
that have partnered with the U.S. House Democracy
Justification for Foreign Operations, FY2019, states, “The
Partnership, a bipartisan commission of the U.S. House of
primary goals of U.S. assistance to Mongolia are to ensure
Representatives that has worked to “promote responsive,
the United States remains a preferred partner over
effective government and strengthen democratic institutions
geographical neighbors Russia and China and to give
by assisting legislatures in emerging democracies.”
Mongolia greater latitude to chart an independent foreign
and security policy.”
The United States and Mongolia both are members of the
Association of Southeast Asian Nations Regional Forum
Mongolia participates in United Nations global
(ARF). Mongolia is one of nine NATO “partner” nations,
peacekeeping operations and has over 1,000 peacekeepers
along with Japan and South Korea in East Asia. Mongolia
deployed in Africa. Mongolia sent troops to Iraq from 2003
also is a member of the Governing Council of the
to 2008 and currently has over 200 troops in Afghanistan
Community of Democracies, established in 2000 to support
supporting Coalition operations. U.S. Indo-Pacific
democratic transitions worldwide.
https://crsreports.congress.gov
Mongolia
U.S. Foreign Assistance
corruption and incompetence. The President, Khaltmaagiin
In recent years, U.S. foreign assistance to Mongolia largely
Battulga, who is affiliated with the Democratic Party, was
has consisted of security assistance. U.S. funding for
elected in July 2017 by a 55%-45% margin.
Development Assistance programs related to governance
and inclusive economic growth was phased out beginning
Mongolian politics have grown more fluid since the 2016
in 2015. In FY2017, Mongolia received $5.2 million in U.S.
parliamentary elections. The MPP and the DP each have
foreign assistance, which included the following:
had corruption scandals, political power has become more
personality-based, and campaigns have lacked substantive
Foreign Military Financing (FMF): $2.6 million to
policy discussion. The next elections are due in 2020
bolster peacekeeping and other capabilities of the MAF.
(parliamentary) and 2021 (presidential).
International Narcotics Control and Law
Economics
Enforcement (INCLE): $0.5 million to help build
The economy is recovering from a slump that began in
capacity within the Mongolian criminal justice system.
2013 due to falling commodities prices, government
mismanagement and unsustainable expansionary policies,
Nonproliferation, Antiterrorism, Demining, and
and a drop in foreign investment. In 2017, Mongolia and
Related Programs (NADR): $0.25 million to address
the International Monetary Fund (IMF) reached agreement
weapons proliferation threats along Mongolia’s borders.
on a program of fiscal reforms and a $5.5 billion bail-out
package that includes support from the IMF, the Asian
International Military Education and Training
Development Bank, Japan, Korea, China, and other donors.
(IMET): $1.84 million to familiarize MAF personnel
with U.S. military doctrine and values, build capacity,
Exports, which are primarily commodities, account for 40%
and develop military-to-military relationships.
of Mongolia’s GDP. China buys over 85% of Mongolian
exports, while Russia supplies Mongolia with 90% of its
A two-year, USAID-supported Leaders Advancing
energy (refined oil). Mongolia’s trade with China, with
Democracy (LEAD) Mongolia program brings young
which it has a trade surplus, totaled $6.3 billion in 2017.
Mongolians to the United States to learn about how to
Leading Mongolian exports to China include coal, copper
engage in civic action. The Peace Corps also is active in
and other ores, crude oil, and unprocessed cashmere.
Mongolia with 108 volunteers involved in English language
Mongolia produces over a third of the world’s raw
and health education.
cashmere, most of which is exported to China and turned
into garments by Chinese manufacturers. As Mongolia has
The Millennium Challenge Corporation (MCC) carried out
developed economically, Ulaanbaatar has become one of
an initial five-year (2008-2013), $285 million compact or
the world’s cities with the highest levels of air pollution,
aid package in Mongolia, focused on property rights,
fueled by coal-heated dwellings (gers or yurts), coal-fired
vocational education, health, road infrastructure, and energy
power plants, and automotive exhaust.
and the environment. In December 2014, the MCC
approved Mongolia for a second compact worth about $345
U.S. trade with Mongolia, with which the United States has
million. The MCC and Mongolian government are
a trade surplus, shrank during Mongolia’s economic
developing a compact focused on improving the supply of
downturn, from $707 million in 2012 to $66.5 million in
water to the capital city of Ulaanbaatar.
2016; it rose to $91 million in 2017. This decrease in large
part reflected a dramatic drop in Mongolian imports of U.S.
Politics
vehicles, machinery, and aircraft. Mongolia’s exports to the
Mongolia’s political system is “semi-presidential,” with a
United States, of which the largest items are minerals, knit
parliament and Prime Minister as well as a popularly-
apparel, and art and antiques, were valued at $9.5 million in
elected President. The Mongolian Prime Minister is the
2017. Mongolia is a beneficiary of the U.S. Generalized
head of government with primary responsibility for
System of Preferences (GSP) program. Eligible products
executive ministries, while the President plays a primary
include tungsten, one of Mongolia’s top export items to the
role in foreign policy, chairs the National Security Council,
United States; certain handmade or handicraft textile
and serves as the Commander in Chief of the armed forces.
products; and some non-apparel items that use cashmere or
furs. Cashmere sweaters are excluded.
Since 1990, Mongolia has alternated between coalitions led
by the MPRP (now MPP) and Democratic Union (now
The Mongolian government has entered into agreements
dominated by the Democratic Party). In 2016, the MPP won
with China and Russia to jointly develop roads, railways,
a large majority of seats in the 76-member unicameral
and power grids that link the three countries. Plans include
legislature, the State Great Khural, gaining 39 seats in the
a Mongolia-China-Russia economic corridor and free trade
election while the ruling Democratic Party lost 25 seats, in
zones on both borders. Mongolia and China envision
large part because many voters blamed the DP for an
integrating Mongolia’s road and development plans with
economic slump that began in 2013 under its rule. The MPP
China’s Belt and Road Initiative.
now holds 65 seats while the DP has nine. Prime Minister
Ukhnaagiin Khürelsükh of the MPP was elected by the
Thomas Lum, Specialist in Asian Affairs
Great Khural in October 2017 after it ousted Jargaltulgyn
Ben Dolven, Specialist in Asian Affairs
Erdenebat, who had served for only three months as MPP
Prime Minister (July-Oct 2017), due to allegations of
IF10926
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Mongolia
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