Updated December 19, 2019
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 the People’s Republic of China (PRC).
known as Khaan Quest. Khaan Quest 2019, the 17th such
It has been viewed as a democratic success story both
event, focused on peacekeeping and stability operations and
among former Soviet satellite states and in Asia. In 1989,
involved 900 MAF personnel, 220 U.S. military personnel,
democratic activists staged protests against communist rule
and participants from 29 other countries including China.
and formed the Mongolian Democratic Union. The
Mongolian People’s Revolutionary Party (MPRP), which
In July 2019, Mongolian President Battulga met with
had ruled the country since 1921, allowed multiparty
President Trump in Washington, DC. The two governments
elections in 1990 and relinquished power in 1996, when a
agreed to establish a Strategic Partnership and pledged to
Democratic Party (DP)-led coalition of opposition forces
cooperate on promoting democratic values and human
won nationwide elections.
rights, maintaining security and stability in the Indo-Pacific
region, addressing transnational threats, increasing bilateral
Mongolia’s foreign relations are driven by a desire to
trade and investment, and other common objectives. In
preserve its autonomy by balancing relations between major
August 2019, Mark Esper, in his first foreign trip since
partners, including the United States, China, and Russia,
being confirmed as Secretary of Defense, traveled to the
and also Japan and South Korea. Its economy is supported
Mongolian capital of Ulaanbaatar and met with senior
by extensive mineral resources, but growth remains uneven,
government leaders.
driven by fluctuations in mineral and petroleum prices.
In April 2019, the Mongolia Third Neighbor Trade Act was
U.S.-Mongolia Relations
introduced in the House (H.R. 2219) and Senate (S. 1188).
The United States established diplomatic relations with
The act would authorize certain textile and apparel items
Mongolia in 1987, and Mongolian leaders describe the
made of cashmere from Mongolia to be imported duty-free.
United States as Mongolia’s most important “third
Supporters of the bill argue that it would help reduce
neighbor”—countries that do not border Mongolia but have
Mongolia’s economic dependence upon China and help
close relations with it. Polling indicates Mongolian
Mongolia to develop its own garment industry.
perceptions of the United States are largely positive.
Mongolia’s relations with its former patron Russia remain
Figure 1. Mongolia at a Glance
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,
by the Dalai Lama, the exiled Tibetan spiritual leader whom
the PRC government asserts aims to split Tibet from China.
The Declaration on the Strategic Partnership between the
United States and Mongolia, released in November 2019,
states that relations between the two countries “have grown
stronger and closer based on common strategic interests,
shared democratic values, good governance, principles of

sovereignty, and respect for human rights.” The Department
Sources: Central Intel igence Agency, The World Factbook, 2018. Map
of State’s Congressional Budget Justification for Foreign
created by CRS, 2018.
Operations, FY2019, states, “The primary goals of U.S.
Mongolians participate in programs of the Open World
assistance to Mongolia are to ensure the United States
Leadership Center, a U.S. congressional agency whose
remains a preferred partner over geographical neighbors
mission is to introduce rising leaders of 17 Eurasian
Russia and China and to give Mongolia greater latitude to
countries to U.S. governing and free market systems.
chart an independent foreign and security policy.”
Mongolia’s legislature is one of 21 parliaments worldwide
that have partnered with the U.S. House Democracy
Mongolia participates in United Nations global
Partnership, a bipartisan commission of the U.S. House of
peacekeeping operations and has over 1,000 peacekeepers
Representatives that works to “strengthen democratic
deployed in Africa. Mongolia sent troops to Iraq from 2003
institutions by assisting legislatures in emerging
to 2008 and currently has over 200 troops in Afghanistan
democracies.”
supporting Coalition operations. U.S. Indo-Pacific
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Mongolia
The United States and Mongolia both are members of the
Constitutional Amendments
Association of Southeast Asian Nations Regional Forum
In November 2019, President Battulga approved
(ARF). Mongolia is one of nine NATO “partner” nations,
constitutional amendments that had been passed by the
along with Japan and South Korea in East Asia. Mongolia
legislature. The amendments strengthen the power of the
also is a member of the Governing Council of the
Prime Minister with the aim of making the government
Community of Democracies, established in 2000 to support
more effective and change the term of the presidency from
democratic transitions worldwide.
up to two four-year terms to one six-year term.
U.S. Foreign Assistance
Economics
In recent years, U.S. foreign assistance to Mongolia has
The economy is recovering from a slump that began in
consisted largely of security assistance. Under the
2013 due to falling commodities prices, government
Department of State’s Congressional Budget Justification
mismanagement and unsustainable expansionary policies,
for Foreign Operations, FY2020, Mongolia would receive
and a drop in foreign investment. In 2017, Mongolia and
assistance for strengthening its democracy, promoting
the International Monetary Fund (IMF) reached agreement
enterprise-driven economic growth, and diversifying its
on a program of fiscal reforms and a $5.5 billion bail-out
economic base. U.S. security assistance includes support for
package that includes support from the IMF, the Asian
MAF peacekeeping activities, building Mongolian military
Development Bank, Japan, Korea, China, and other donors.
capacity, familiarizing MAF personnel with U.S. military
doctrine and values, and developing military-to-military
Exports, which are primarily commodities, account for 40%
relationships. In FY2019, Mongolia received nearly $10.0
of Mongolia’s GDP. China buys over 85% of Mongolian
million in U.S. bilateral assistance.
exports, while Russia supplies Mongolia with 90% of its
energy (refined oil). Mongolia’s trade with China, with
The Peace Corps is active in Mongolia with 99 volunteers
which it has a trade surplus, totaled $6.3 billion in 2017.
involved in English language and health education. A
Leading Mongolian exports to China include coal, copper
USAID-supported Leaders Advancing Democracy (LEAD)
and other ores, crude oil, and unprocessed cashmere.
Mongolia program brings young Mongolians to the United
Mongolia produces over a third of the world’s raw
States to learn about how to engage in civic action.
cashmere, most of which is exported to China and turned
into garments by Chinese manufacturers.
The U.S.-funded Millennium Challenge Corporation
(MCC) carried out an initial five-year (2008-2013), $285
As Mongolia has developed economically, Ulaanbaatar has
million compact or aid package in Mongolia, focused on
become one of the world’s cities with the highest levels of
property rights, vocational education, health, road
air pollution, fueled by coal-heated dwellings (gers or
infrastructure, and energy and the environment. In July
yurts), coal-fired power plants, and automotive exhaust.
2018, the MCC launched a second, $350 million compact in
The growing number of cashmere goats, coupled with
Mongolia, which focuses on providing a sustainable water
persistent drought, has contributed to overgrazing and the
supply to Ulaanbaatar.
degradation or reduction of Mongolia’s grasslands.
Politics
U.S. trade with Mongolia shrank during Mongolia’s
Mongolia’s political system is “semi-presidential,” with a
economic downturn, from $707 million in 2012 to $66.5
parliament and Prime Minister as well as a popularly
million in 2016; it rebounded to $131 million in 2018. This
elected President. The Mongolian Prime Minister is the
decrease in large part reflected a dramatic drop in
head of government with primary responsibility for
Mongolian imports of U.S. vehicles, machinery, and
executive ministries, while the President plays a primary
aircraft. Mongolia’s exports to the United States, of which
role in foreign policy, chairs the National Security Council,
the largest items are minerals, knit apparel, and art and
and serves as the Commander in Chief of the armed forces.
antiques, were valued at $10.1 million in 2018. Mongolia is
a beneficiary of the U.S. Generalized System of Preferences
Since 1990, Mongolia has alternated between coalitions led
(GSP) program. Eligible products include tungsten, one of
by the MPRP (now MPP) and Democratic Union (now
Mongolia’s top export items to the United States; certain
dominated by the Democratic Party). In 2016, the MPP won
handmade or handicraft textile products; and some non-
a large majority of seats in the 76-member unicameral
apparel items that use cashmere or furs.
legislature, the State Great Khural, gaining 39 seats in the
election while the ruling Democratic Party lost 25 seats, in
The Mongolian government has entered into agreements
part because many voters blamed the DP for an economic
with China and Russia to jointly develop roads, railways,
slump that began in 2013 under its rule. The MPP now
and power grids that link the three countries. Plans include
holds 64 seats while the DP has seven.
a Mongolia-China-Russia economic corridor and free trade
zones on both borders. Mongolia and China envision
Prime Minister Ukhnaagiin Khürelsükh of the MPP was
integrating Mongolia’s road and development plans with
elected by the Great Khural in October 2017. The President,
China’s Belt and Road Initiative.
Khaltmaagiin Battulga, who is affiliated with the
Democratic Party, was elected in July 2017 by a 55%-45%
Thomas Lum, Specialist in Asian Affairs
margin. The next parliamentary elections are scheduled to
Ben Dolven, Specialist in Asian Affairs
be held in 2020.
IF10926
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Mongolia


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https://crsreports.congress.gov | IF10926 · VERSION 6 · UPDATED

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