Mongolia is world’s second largest landlocked country after Kazakhstan. The country contains very little arable land and most of its area is covered by grassy steppes. Mongolia is ranked as a lower middle-income economy by World Bank. Ulaanbaatar, the capital city is home to 40 to 45% of the country’s population. Besides agriculture which contributes to 16% of its GDP, mining accounts for 22% of its GDP. Because of a boom in the mining sector, Mongolia had high growth rate in 2007 (9.9%) and 2008 (8.9%). In 2009, due to a global financial crisis the local economy dropped to 40% off against US Dollar.
Mongolia is a semi presidential representative Democratic Republic. The two main political parties of Mongolia namely, Mongolian people party and Democratic party occupy a substantial amount of strength in Parliament. Recently Mongolia appointed its new president Khaltmaa Battulga, of the Democratic party who will succeed Tsakhiagiin Elbegdorj, who has been elected twice as both Prime Minister and President previously.
This event of Mongolia electing its new President is also of great significance to India. Battulga, a Russophile, is always seen as a leader who advocates Mongolian partnership with other countries apart from China. The East Asian country which is highly dependent on China clearly seen in the perspective of bilateral trade, wants to reduce this reliance which may lead the country to a debt trap. China accounts for 68.5% of Mongolian foreign trade between January and May this year which has increased by 1.5% from 1989. China’s share of Mongolian export during this period is 95%. China is believed to be eyeing Mongolia’s mineral deposits which accounts for more than 80% of Mongolia export. It is evident from the fact that several mining licenses have been issued to Chinese, Russian and Canadian firms.
Facets of invitation
Soon after the results of presidential election announced, India extended an invitation to Mongolia’s new president through its envoy there. The then President Pranab Mukherjee sent a message that said “India and Mongolia shared a common belief in democracy”. In fact, T Suresh Babu, Indian envoy to Mongolia was among the first Ambassador to convey his wishes to the newly elected president . According to the people who were aware of this meeting, Battulga urged Babu to convey his message to Indian PM of his proposal of the opening of an IIT Campus in Ulaanbaatar. It is proposed that an India-Mongolia joint School of Information Technology will also be set up in the country. Prime Minister Narendra Modi who visited Ulaanbaatar in 2015 also extended a line of credit of 1 billion USD to Mongolia. India is also contributing to the training of Mongolian military officers.
What led to this situation?
Mongolia security and cultural relations with India are witnessing a steady growth after China imposed an economic blockade on it ever since it hosted Dalai Lama’s visit last year. However after that, Mongolian government bowed down with a promise to not allow any further visits from any spiritual leader of Tibetan people, which has always irked China. Among other reasons for this change, the bailout package of IMF worth 5.5 million USD stands prominent, which according to some were due to the mismanagement of the abundant resources in the country.
Since Khaltmaa Battulga, the current President is a vocal China critic and has always argued against the Mongolian economic dependency on China, India stands a good chance to give a boost to its already growing relationship with Mongolia. The proof of this is a civil nuclear deal with India that was concluded in 2009. This exhibits a stern message to China that India will not hesitate or constraint its interaction with the neighboring countries when it comes to our national interest.
Reference – Economic times