International economic relations seems to be such a large-scale topic that only concerns politicians, scholars and representatives from large international corporations. Today, each and every person clearly understands that they are engaged in the economic activity of their country to one degree or another, and the life quality of the population depends on the state of the economy. The amount of salaries, prices in stores, qualities of services and health care, education, and the ability to travel–absolutely everything that constitutes the concept of the quality of our life is determined by the economy. In simple words, the level of the economy is equal to the standard of living of every family, every person! This means that any responsible political force is simply obliged to ensure that all activities of the government, including economic and socio-economic, work in the interests of the people as a whole. It is worth considering that cooperation of the state and other countries is of great importance. For that reason, the Shanghai Cooperation Organization (SCO) is a fairly convenient platform for Mongolia for maintaining an international dialogue with its closest neighbors, and updating its relations with Russia, one of the crucial member states of the organization, into a multilateral format of dialogue. 

Economy for the people

One of the most significant global events to take place in November 2020 is the forthcoming meeting of the SCO Council of Heads of State, during which Russia will hand over its chairmanship. Due to COVID-19 pandemic, the forum will be held virtually using video conferencing tools. During the event, leaders of the SCO countries are expected to discuss issues on further strengthening and deepening cooperation within the framework of the Organization, including in the context of global political and socio-economic consequences of the novel coronavirus pandemic. In the emerging international situation, the establishment of the Mongolia-Russia-China economic corridor, which was agreed on the sidelines of the SCO Summit in 2016 and serves as one of the elements of integration processes in Eurasia, is crucial for Mongolia. The founding of the trilateral economic corridor will allow Mongolia to fulfill its existing transit potential since Mongolia’s Steppe Road project is essentially supposed to serve as a connecting link for the Eurasian Economic Union and China’s ‘One Belt–One Road’ initiative. Indeed, the location of Mongolian between two SCO leaders–Russia and China, itself speaks in favor of an active engagement of Mongolia in long-term international cooperation. L.Khangai, who served as an Ambassador Extraordinary and Plenipotentiary of Mongolia to the Russian Federation between 2005 and 2009, explains about Mongolia's participation in the SCO as an observer, and the advantages of cooperation within the organization as follows: “Within the framework of the 2016 SCO Summit held in Tashkent, Mongolia and Russia, together with China approved Program for the establishment of the economic corridor between the three countries. The program envisages modernization of the existing Trans-Mongolian railway, construction of new railways and highways, power transmission lines, and so on connecting the countries," he explained. “It should be noted that Mongolia is located between the richest countries in the world in natural resources and the most populous countries with thriving economies. Therefore, the question that naturally arises is the need to implement large-scale infrastructure projects involving the three nations. The implementation of such infrastructural projects in the future should lay additional foundation for the Eurasian continent as a whole”.– Mr. Khangai notes. 

Overcoming the economic crisis

One of the most important measures aimed at overcoming the crisis in the Mongolian economy can be an international-regional cooperation and the resulting economic ties. At the same time, the Foreign Policy Concept of Mongolia recognizes "participation in the political and economic integration process..." as one of priority directions. Especially, when such cooperation between Mongolia and Russia can be "convenient" in terms of territorial location, and mutually beneficial, as a matter of course. Therefore, implementation of joint transport, logistics and energy projects with the Russian Federation, including within the framework of the Mongolia-Russia-China economic corridor, will lay the foundation for a long-term partnership agreement. Former diplomat, international relations expert D.Bayarkhuu also expressed his opinion on this matter: “In general, ‘transit economy’ is very suitable for our country. Delivery of goods from Russia to China, and vice versa through Mongolia is the most suitable option, in my opinion. An example would be a gas pipeline that will be pass through our territory. Not only a gas pipeline can be laid from Russia, but also an oil pipeline. Electric power transmission lines can also built. There is a possibility of building a highway through Naushki region of Russia. Mongolia has the most convenient geographical location without any obstacles. If you build such high-speed roads in these areas, there are no high mountains, deep lakes," noted Bayarkhuu. 

We share the same position

The year of 2021 will mark the 100th anniversary of the establishment of diplomatic relations between Mongolia and Russia. The history of Mongolian-Russian relations confirms Russia's ability for strategic partnership and ensuring mutually beneficial relations. At a time when the process of ever-increasing interconnectedness of global countries and their peoples began, world economic, political, cultural, religious integration among them did as well. Not only have Mongolia and Russia long been reliable partners, but also good friends, united by a shared history. The friendship between the countries has stood the test of time. And today the development strategies of both countries coincide with each other, and hence can and should be combined. We turned to former Ambassador of Mongolia to Russia L.Khangai for comments. “Our relationship has risen to a higher level. It is fixed and enshrined in the treaty between Mongolia and the Russian Federation on Friendly Relations and Comprehensive Strategic Partnership, signed in September 2019 during the visit of the President of the Russian Federation Vladimir Putin to Ulaanbaatar, Mongolia. In particular, many positive developments have taken place in the humanitarian field," Khangai told us. “In 2014, an agreement on visa-free travel for the people of the two countries was signed, the number of Mongolian students to study in the country under the scholarship quotas of the Russian government has been increased, and the anniversary of the joint victory in the Battle of Khalkhin Gol was solemnly celebrated. Russian companies are taking part in the modernization of Mongolia’s factories, built with the help of the Soviet Union. A number of documents were also signed to act as the foundation for mutually beneficial cooperation for a long period of time stretching into the future.” “I am pleased to highlight that Ulaanbaatar Railways Mongolian-Russian joint venture is successfully operating, even today, under the pandemic conditions, increasing the volume of traffic. During the visit of the Prime Minister of Mongolia U.Khurelsukh to Russia in December 2019, an agreement was reached on the construction of a gas pipeline from Russia to China through the territory of Mongolia. This is a multibillion dollar mega project that concerns not only Mongolia and Russia, but also our common neighbor China," emphasized the Ambassador. According to him, there are undoubtedly certain issues in the bilateral relations and international projects of Russia and Mongolia, which need to be solved through joint efforts. “Desired and possible level of trade between the two countries has not been achieved yet, which resembles a critical issue, especially for our producers wishing to export their products to Russia. The fact that the Russian Federation, as a member of the Eurasian Economic Community, cannot unilaterally resolve the issue of custom duties reduction without the consent of this organization needs to be kept in mind. Mongolia’s Ministry of Foreign Affairs and other relevant bodies are holding negotiations with this organization to conclude a free trade agreement,'' explained Mr. Khangai. The Eurasian Economic Community has concluded a similar agreement with Vietnam. Let's hope for the earliest possible conclusion of such an agreement, he notes. It is worth noting that the expansion of the sales market for traditional Mongolian exports would be quite useful for Mongolia, who is now in the midst of an exacerbating economic downturn and on the verge of repayments of long-term western loans due from next year. Building mutually beneficial economic ties with Russian regions and the Eurasian Economic Union has evidently become one of the significant options to get out of this difficult situation for Mongolia and has potential healing effect on the country’s economy. Simply put, it is economically beneficial for Mongolia to be Russia's ally. Moreover, according to experts, there is undoubtedly a prospect of productive cooperation, since Mongolia and Russia have always adhered to the principles of mutual benefit, mutual trust, equality, consultations, respect for cultural diversity while striving for joint development. In turn, D.Bayarkhuu points out that “In the field of economy, Mongolia maintains cooperation with many countries, and we have some shortcomings. In particular, frequent changes in the government’s structure lead to shifts in government’s works, and the new composition of the new government tries to do it all over again. For example, in 2016 in Tashkent, leaders of the three countries– Mongolia, Russia and China met and signed 32 cooperation documents, which must have been implemented. After all, the question is not who was our President at that time. Ts.Elbegdorj was the President of the country then. But this is not the point, the state’s works must continue Mr. Bayarkhuu said. “This requires discipline and responsibility,” added the expert. 

Long-term relationships - prosperous future

It is quite obvious that the guarantee of a prosperous future in the long run is the key component of sustainable economic growth and improvement of life quality of people. It can be assured through strengthening of effective cooperation in the political, trade, economic, scientific, technical and cultural areas, as well as in the fields of education, energy, transport, tourism.

With this in mind, Mongolian authorities must focus on the development of relations with its regional partners, the most proven of whom is the neighboring Russia that actively promotes cooperation together with the ‘second neighbor of Mongolia’ in the sphere of the SCO, as the most promising regional political and economic structure, in which Mongolia needs to become more involved.

B.Tsetseg