Mongolia 2019: Crisis, obstacles & achievements on the domestic, economic and foreign policy fronts

Abstract

This article analyses the main issues and developments on Mongolia’s domestic, foreign economic and foreign policy agenda in 2019, and concludes that the country’s almost complete dependence on Russia and China in terms of trade and energy is here to stay. On a positive note, the article concludes that Mongolia’s democratically-elected institutions are able to address and reverse its president’s anti-democratic power-grabbing and is able to stand its ground in a decisively non-democratic and authoritarian neighbourhood. The resource-rich Mongolia with estimated reserves of copper, coal and other minerals valued at US $1-3 trillion, achieved economic growth close to 7% in 2019. This makes Mongolia one of the world’s fastest growing economies although the country’s economic growth rises and falls with commodity prices. Adding to its economic vulnerability is its near-complete dependence on China. In 2019, China was – as in previous years – by far the biggest purchaser of Mongolian coal and copper and China buys more than 90% of its exports. In March 2019, Mongolia experienced a constitutional controversy, which in November of the same year resulted in constitutional amendments. Mongolia’s hybrid political system remains a recipe for political stalemate and the country’s still rampant corruption contributes to that instability. In the year under review the country continued to diversify its foreign and foreign economic relations through its «Third Neighbour» Policy, i.e. the expansion of political, trade and economic and security relations with fellow democratic countries such as the US, India and Japan.