Mongolia
Updated October 4, 2023
Mongolia
Overview
majority held by different parties. That changed in 2021,
Mongolia is a landlocked country that shares borders with
when the MPP won the presidency after having secured a
two powerful neighbors, Russia and China. With a
supermajority in parliament in 2020. Mongolia’s June 2021
population of about 3.3 million and a land area slightly
presidential election delivered a decisive victory for MPP
smaller than Alaska, Mongolia is the most sparsely
candidate Ukhnaagiin Khurelsukh. Constitutional changes
inhabited country in the world. About half of the country’s
introduced in 2023 are to expand the size of parliament
population lives in the capital, Ulaanbaatar. While
from 76 directly-elected seats to 126 members, 78 directly-
Mongolians were traditionally nomadic pastoralists, the
elected and 48 proportionally elected from nation-wide
country’s economy is now highly dependent on its
party lists. The next parliamentary elections are due in the
extensive mineral resources, with extractive industries
first half of 2024.
accounting for the vast majority of Mongolian exports.
Mongolia is the only formerly communist country in Asia
For almost 70 years after it declared independence from
classified as “free” by the U.S. non-governmental
China in 1921, Mongolia was a satellite state of the Soviet
organization Freedom House. According to Freedom
Union, under the one-party rule of the communist
House, political rights and civil liberties in Mongolia “have
Mongolian People’s Revolutionary Party (MPRP).
been firmly institutionalized.” The State Department calls
Following a peaceful revolution in 1990, Mongolia
Mongolia’s achievements in terms of democratization and
embarked on a successful democratic transition. Mongolia’s
market reforms “considerable,” but describes institutional
foreign relations are driven by a desire to balance Chinese
weakness and widespread corruption as enduring
and Russian influence by engaging with a range of partners,
challenges. According to the State Department and other
including the United States and other countries such as
observers, corruption remains widespread at all levels of
South Korea and Japan. Some Members of Congress have
government, and the politicization of anticorruption efforts
expressed support for expanding U.S. engagement with
hampers their effectiveness. Following large anti-corruption
Mongolia.
protests in 2022, in 2023 Mongolia’s government
announced a new anti-corruption strategy intended to
Figure 1. Mongolia at a Glance
increase transparency and bolster cooperation with civil
society and international organizations.
Economy
Mongolia’s economy is highly dependent on extractive
industries, and the country sends most of its exports to
China, rendering it vulnerable to fluctuations in commodity
prices and developments in the Chinese economy.
Mongolia has extensive deposits of minerals including
copper, gold, coal, molybdenum, uranium, tin, and
Sources: Central Intel igence Agency, The World Factbook, 2023. Map
tungsten. While Mongolia’s economy traditionally was
created by CRS.
based on herding and agriculture, the mining sector now
accounts for over 25% of the country’s gross domestic
Political Background
product (GDP). China accounted for 84% of Mongolian
Mongolia’s political system is “semi-presidential,” with a
exports and 35% of Mongolian imports as of 2022. Russia
parliament and prime minister as well as a popularly elected
is Mongolia’s second-largest source of imports, accounting
president. The Mongolian prime minister is the head of
for 30% of the total as of 2022, and provides over 90% of
government with primary responsibility for executive
Mongolia’s energy imports.
ministries, while the president plays a primary role in
foreign policy, chairs the National Security Council, and
The World Bank calculates that Mongolia’s GDP
serves as the commander in chief of the armed forces.
contracted by 4.4% in 2020 as a consequence of the
COVID-19 pandemic, with a weak recovery of 1.4%
Although Mongolia has a multiparty system, since the
growth in 2021. The World Bank estimates that Mongolia’s
country’s democratization in 1990 political power has
GDP grew by 4.7% in 2022, with inflation exceeding 15%
alternated between the two major parties, the Mongolian
due to border closures resulting from China’s zero-COVID
People’s Party (MPP, the successor to the MPRP) and the
policy and the impact of the war in Ukraine resulting in
Democratic Party (DP). The DP and the MPP have
higher prices of imported food, fuel, and fertilizers. The
established a track record of peaceful transitions of power.
World Bank forecasts that economic growth will accelerate
For most of its democratic history, Mongolia had a divided
to 5.2% in 2023 and exceed 6% in 2024-2025.
government, with the presidency and the parliamentary
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Mongolia
As Mongolia has developed economically, Ulaanbaatar has
U.S. Assistance
become one of the world’s cities with the highest levels of
U.S. assistance to Mongolia supports a range of programs
air pollution, fueled by coal-heated dwellings (gers or
whose aims include strengthening democratic systems and
yurts), coal-fired power plants, and automotive exhaust.
promoting good governance, advancing renewable energy,
The growing number of cashmere goats, coupled with
promoting economic diversification, building the capacity
persistent drought, has contributed to overgrazing and the
of law enforcement agencies, supporting Mongolia’s border
degradation or reduction of Mongolia’s grasslands.
security capabilities, and furthering military
professionalization. According to the State Department,
Mongolia’s International Relations
approximately 120 Mongolians travel to the United States
Mongolia has long sought to maintain good relations with
every year on U.S. government-funded educational,
Russia and China, while pursuing a “third neighbor” policy
professional, and cultural exchange programs. The State
that emphasizes developing relationships outside of its
Department regards Mongolia as a “priority” recipient in
immediate neighborhood. Mongolia describes the United
East Asia for Foreign Military Financing and International
States as its most important “third neighbor.” The United
Military Education Training programs. The Biden
States and Mongolia upgraded their bilateral relationship to
Administration’s budget request for FY2024 includes $14.5
a Strategic Partnership in 2019. The House of
million in total assistance to Mongolia, compared to an
Representatives and the Senate passed resolutions
estimated $15.5 million allocated in FY2023 and $13.2
reaffirming the strategic partnership between the United
million allocated in FY2022.
States and Mongolia in the 116th (H.Res. 1100) and 117th
(S.Res. 36) Congresses. The United States was the fifth
Between 2008 and 2013, the Millennium Challenge
country with which Mongolia established a strategic
Corporation implemented a five-year, $285 million
partnership, following Russia (2006), Japan (2010), China
compact with Mongolia targeting property rights,
(2014), and India (2015). The U.S. State Department
transportation, energy, education, and health. A second,
describes Mongolia as “a steadfast U.S. partner,” citing
five-year $350 million compact to build critical water
Mongolia’s military deployments with the United States to
infrastructure in Ulaanbaatar entered into force in 2021.
Afghanistan and Iraq, and terms Mongolia “an important
partner in upholding a free, open, and inclusive Indo-
Mongolia is one of 21 countries whose legislatures
Pacific.”
participate in the House Democracy Partnership, a
bipartisan commission of the U.S. House of Representatives
Mongolia’s foreign military relations complement the
that seeks to support the development of effective,
country’s “third neighbor” policy, and participation in
independent, and responsive legislative institutions.
global peacekeeping operations is part of the country’s
multilateral diplomacy. Mongolia actively cooperates with
U.S.-Mongolia Trade
NATO on issues including counterterrorism, non-
U.S. trade in goods with Mongolia totaled $175.1 million in
proliferation, and cybersecurity through an Individual
2022, including $26.4 million in Mongolian exports to the
Partnership and Cooperation Programme. Mongolia is also
United States. Mongolia is a beneficiary of the U.S.
an observer in the Russia- and China-led Shanghai
Generalized System of Preferences (GSP) program, which
Cooperation Organization. Since 2003, Mongolia has
expired on December 31, 2020 and is currently pending
hosted the annual Khaan Quest multinational military
reauthorization. Major Mongolia exports that are eligible
exercise, co-sponsored by U.S. Indo-Pacific Command and
for GSP benefits include tungsten, one of Mongolia’s top
designed to promote regional peace and security in
export items to the United States; certain handmade or
Northeast Asia. After a two-year hiatus due to the COVID-
handicraft textile products; and some non-apparel items that
19 pandemic, Khaan Quest resumed in June 2022, with 15
use cashmere or furs.
countries participating; 26 countries participated in the most
recent iteration of the exercise, held in June 2023.
The U.S. government seeks to assist Mongolia in
diversifying its economy in order to decrease dependence
According to the State Department, the growing military
on China. The Mongolia Third Neighbor Trade Act, first
cooperation between the United States and Mongolia
introduced in the 115th Congress in 2018 and reintroduced
“centers on further developing Mongolia’s already
in the 116th and 117th Congresses in 2019 and 2021,
impressive capacity to contribute to U.N. peacekeeping
respectively, would facilitate the export of cashmere from
operations.” Since 2002, Mongolia has sent more than
Mongolia to the United States, enabling Mongolia to
18,000 troops to U.N. peacekeeping operations around the
diversify its exports. While Mongolia is the world’s second-
world, a contribution the United Nations terms
largest cashmere producer after China, most of its cashmere
“significant.” As of 2021, Mongolia was the 23rd largest
is exported in raw form and processed in, and then re-
contributor of troops to U.N. peacekeeping operations.
exported from, China. Mongolia’s Ministry of Foreign
Affairs states that, if passed, the bill would “support the
Analysts see Russia’s ongoing war against Ukraine as
Mongolian economy by creating jobs, diversifying export,
placing Mongolia in a difficult diplomatic position.
and contribute to expanding trade and economic
Mongolia’s government has been largely silent on the
cooperation between Mongolia and the United States.”
conflict, and has continued to pursue multilateralism. Public
opinion appears divided, with many Mongolians appearing
Maria A. Blackwood, Analyst in Asian Policy
to favor neutrality, while some express pro-Russian or pro-
Ukrainian sentiments.
IF10926
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Mongolia
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