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Isolated, Landlocked Mongolia Opens Up to the World
The Washington Diplomat / July 2007

By Larry Luxner

Vast Mongolia — more than twice the size of Texas — has only 2.6 million inhabitants, less than that of the Washington metro area. But recent genetic research shows that one in 200 men across the globe carry a form of the Y chromosome that originated in Mongolia in medieval times.

A direct legacy of the 13th-century military exploits of Genghis Khan, this is just the kind of statistic that makes Ravdan Bold proud.

Other numbers Mongolia's ambassador to the United States enjoys ticking off: annual, sustained GDP growth of 8%, yearly textile and garment exports of $200 million, per-capita income of $1,000 and roughly 85% of Mongolia's economy now controlled by the private sector.

"Mongolia is the stronghold of democracy in northeast Asia," Bold told the Washington Diplomat during an interview last month. "If you look at Russia and China, you'll find totally different societies. The rest of Central Asia is also different from Mongolia. We have free elections, self-governing local authorities and a growing economy thanks to market-oriented policies. You cannot find a place like Mongolia anywhere in the world where democracy works so well."

A slight exaggeration perhaps, but Mongolia does rank surprisingly high in Freedom House's annual "Freedom in the World" report.

The country, which until February 1992 was officially called the Mongolian People's Republic, scored a 2 in both political rights and civil liberties — with 1 being the best possible score and 7 being the worst.

In June 2004, Mongolians voted in their country's fifth parliamentary elections since the fall of communism, though Bold insists, incredibly, that "Mongolia was never a communist country. We were socialist. There's a big difference between socialist and communist."

Not enough of a difference, apparently, to convince voters that they were really better off under the Mongolian People's Revolutionary Party (MPRP), which had been swept out of power in 1996 after 72 years. The MPRP regained power with victories in the 1997 elections for the largely ceremonial presidency and the more important 2000 parliamentary vote. Today, it governs through a coalition with the main opposition party, the Motherland Democracy Coalition, under the leadership of Prime Minister Tsakhilganiin Elbegdorj.

"The key political issue in post-Communist Mongolia has been the pace and extent of economic reform. Market reforms have helped create a fledgling private sector, but also have contributed to soaring unemployment and other social miseries," according to Freedom House's 2005 report.

"MPRP governments in the early 1990s privatized small businesses and ended collectivized herding, but had difficulty retooling the economy to survive the loss of Soviet subsidies. Many large firms went bankrupt, and thousands of Mongolians were thrown out of work. Despite strong economic growth, poverty is still widespread. Poverty and unemployment remain prime concerns for Mongolians."

That's a far cry from the 13th century, when the vast and prosperous Great Mongol Empire stretched from Korea to Poland, from Siberia to the Persian Gulf.

This period of the Pax mongolica, as historians call it, "was a genuine Golden Age of commercial trade and intellectual exchange between East and West," writes Claire Sermier, author of the guidebook Mongolia: Empire of the Steppes. "The Mongols' contribution to medieval civilization in general, and to Western chivalry in particular, was considerable."

According to a 13th-century Turkish historian who visited the empire, "a young virgin carrying on her head a tray of gold could travel from the Levant to where the sun sets, from the shores of the Pacific to those of the Mediterranean, without suffering the slightest harm."

In the 17th century, Mongolia was divided into eastern and western provinces, and ultimately fell under the complete domination of the Manchu Empire. In 1911, following the collapse of that empire, Mongolia declared its independence.

Four years later — through a treaty with Russia — China recognized the autonomy of Outer Mongolia, which corresponds to present-day Mongolia. Inner Mongolia, meanwhile, remained a Chinese province.

After the 1917 Russian revolution, China attempted but failed to reclaim its lost province. In 1924, with the proclamation of the People's Republic of Mongolia, the monarchy was abolished, and the Great Khural (Assembly) drafted a new constitution that turned the empire into a republic.

Mongolia, the second country in the world to declare itself a Marxist state, remained a Soviet satellite for more than 60 years, during which time its people were subjected to Soviet-style purges, torture and summary executions.

"What had begun as a nationalist movement — which had turned to the Soviets for support against Chinese domination — became a bloody dictatorship, with still untold numbers of victims," writes Sermier. "Marshal Choibalsan was the master of the country from 1937 to 1952, the year of his death. His name is associated with the period of worst bloodshed in the history of Mongolia since the revolution."

Choibalsan, whose main goal was "liquidating the enemies of the people," killed over 30,000 people during his rule; he was also responsible for destroying nearly all of Mongolia's Buddhist temples. Yet Sermier says the verdict on Choibalsan is still a mixed one.

"Although accused of creating a personality cult around himself, he is credited with preserving Mongol independence at a time when Stalin planned to turn Mongolia into a republic of the USSR," she wrote. "Some even feel that the repression of 1937 was the price to pay for maintaining independence."

In 1987, Mongolia established diplomatic relations with the United States, and three years later — with the collapse of the Soviet Union — Mongolia's Interior Ministry was dismantled and Soviet advisers were sent home. The country was declared a democracy and multiparty elections were held for the first time in Mongolian history.

"Mongolia was isolated for many centuries between two big giants. So once Mongolia opened up to the outside, it was natural that foreign relations would be expanded and that many partners would come to Mongolia to do business," said Bold. "But many of these people get the impression that Mongolia is kind of like China and kind of like Russia — and we are completely different from either country. That's why we've survived. We are not part of either Chinese or Russian culture."

Bold, 52, has represented his country's interests in Washington since February 2003. A graduate of the Military Institute in Ulaanbaatar, the Diplomatic School in Moscow and the Naval Postgraduate School in Washington, Bold held various posts within his country's Ministry of Foreign Affairs until his appointment in 1996 as deputy director of the Mongolian Central Intelligence Agency.

He also served, from 1997 until his current appointment, as executive secretary of Mongolia's National Security Council.

Bold said Mongolia has excellent relations with the United States, especially since President Bush's historic visit there in November 2005.

"We have a comprehensive partnership based on very strong common strategic interests and values," he said. "This March, President Bush called my president and invited him to visit Washington as a reciprocal visit, because relations between Mongolia and the U.S. are growing year by year."

Bold, who directs a staff of 15, says the two countries "understand each other" when it comes to the need to contain Islamic extremist groups such as al-Qaeda.

"Mongolia has wholeheartedly rendered its support to the war on terror," he said. "When we joined the Coalition of the Willing, we had two goals in mind: first, to enhance our international reputation and prestige by sending troops there, and secondly, to get some peacekeeping experience."

At present, 150 soldiers are serving in Iraq, and 30 in Afghanistan; some 1,000 have been sent there in total since 2002.

"So far, we don't face any strong opposition to these policies," Bold said, adding that despite objections to the war in Iraq by its two huge neighbors, "we are pursuing an independent policy, and we haven't felt any direct pressure from either China or Russia on this issue."

In fact, he said, "we have excellent relations with both Russia and China. We have no serious issues with either country." This, despite centuries of resentment against Chinese domination of Mongolia.

"It's a very sensitive historical issue which is still under debate," he explained. "If you ask Mongolian historians whether the country was ever part of China, you will see their face change suddenly. They'll ask who dominated whom?"

Bold added: "Mongolia always collected taxes from Russia and China when we were a great empire. Now, we face the challenge of collecting taxes from our own citizens. For us, paying taxes is something new."

In 2004, Mongolia's economy grew by 10.7%, with GDP growth in the ensuing two years speeding along at 8%. Over the next five years, annual GDP is expected to rise by 7% — far eclipsing that of most European and Latin American countries.

"Mining is booming right now," said Bold, noting that Mongolia is among the world's largest exporters of copper. U.S. companies that have poured investments into Mongola so far include Peabody Energy (coal); John Deere (tractors); Fluor (engineering); Phelps-Dodge (mining) and Coca-Cola.

A North American-Mongolia Business Council has recently been formed, with headquarters in Alexandria, Va., and Ulanbataar.

Northern Virginia, incidentally, has one of the highest concentrations of Mongolian immigrants in the United States. Only Denver — whose geography and climate are similar to that of Mongolia — is home to more Mongolians.

The aim of the business council is to tap into this immigrant market and expand bilateral trade, currently estimated at $250 million a year. The bulk of that consists of Mongolian exports of cashmere and ready-to-wear apparel to the United States.

"We have at least 10,000 families who totally depend on the U.S. market for their livelihood, because the U.S. is the main market for Mongolian textiles," said Bold. "Mongolia also imports American goods, especially machinery used in the mining industry."

A partnership has also been established between Mongolia and the State of Alaska, both of which are quite similar in size. The relationship, which grew out of Mongolian soldiers serving in Iraq together with Alaska National Guard troops, has since been expanded, and now Fairbanks and the mining town of Erdenet are sister cities.

In the meantime, Mongolians are becoming Internet-savvy and have taken a great interest in information technology.

"English is now replacing Russian as the first foreign language," he said. "All schools are required to teach English classes. People are also studying Chinese, which might be the future language of business."

Long closed to the outside world, Mongolia is trying to re-invent itself as a prime destination for ecotourism and adventure travel. Last year, the country received about 300,000 tourists, though only 15,000 of them were Americans. U.S. citizens do not need a visa to enter Mongolia, though getting there isn't cheap; a round-trip flight via Seoul or Berlin costs about $1,300.

Despite its achievements, Mongolia faces serious challenges ahead. For one thing, Mongolia is finding it hard to compete against the Chinese labor force, which is among the lowest-paid in the world — even with U.S. trade and quota preferences under the Generalized System of Preferences. The only solution, said Bold, "is to take advantage of the fast-growing Chinese economy" and treat China as an enormous market for Mongolian products.

Another obstacle is official corruption — perhaps a holdover from Mongolia's long years as a communist dictatorship.

In 2004, Mongolia was ranked 85th out of 146 countries in Transparency International's Corruption Perceptions Index. That's represents a decline in Mongolia's standing over the previous five years; in 1999, it was ranked 43rd out of 99 countries.

The U.S. Commerce Department cites "corruption in the bureaucracy" as an impediment to business, yet the ambassador is a little defensive when it comes to this subject.

"I don't know why you raised this corruption issue," he told the Diplomat in response to a question about the TI survey. "Since the late 1990s, we are pursuing good-governance projects. From the beginning, we sometimes have faced challenges from foreign investors who don't understand our culture. It's not easy for foreigners, but from our perspective, we have the best possible legal environment for foreign investment."

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