Mongolia: Landlocked But Not Hemmed In

In the ten years since the collapse of the Soviet empire, the former socialist republic of Mongolia has transformed itself into a stable democracy. As his country prepared to host the 5th Conference of New or Restored Democracies from 10 to 12 September 2003, the Ambassador of Mongolia to France, H.E. Tsend Batbuyan, gave us an overview of the challenges facing his country and the resources that can spur its development through stronger regional and multilateral cooperation.


The Diplomatic Letter: Mr. Ambassador, after long years of theocratic rule succeeded by a communist regime intricately linked to the USSR, Mongolia has been firmly committed to building a solid democratic system since 1992. How has your country weathered this latest phase in its history? Could you describe the key issues and stakes of the legislative elections scheduled for 2004?

H.E. Tsend Batbuyan: It is true that my country has been firmly committed to building a solid democratic system since the early 1990s. Looking back over the long history of the Mongolian people, it becomes clear that this has indeed been an exceptional phase. In just a few short years Mongolia has transformed itself into a democracy that shares the universal values revered by the international community. It has opened up to the rest of the world, while simultaneously restoring its cultural and historical traditions. Our citizens’ fundamental rights and freedoms are protected by the new 1992 Constitution. The legislative and presidential elections held during this period  enabled our citizens to exercise their free will, allowing the Mongolian people to make their own choice. This transitional phase has been marked by an unleashing of energy, as everyone chimed in to launch a wide array of new initiatives, not only in the political and economic arenas, but also by encouraging  creation. In short, our country, which had a totalitarian regime and a centralized  planned economy, has made radical changes in every walk of life. Yes, these reforms have been difficult, and a great deal remains to be done, most notably in the economic and social arenas.
But the Mongolian people have already made their choice, opting for democracy and liberty as the masters of their own fate. They will be able to voice their desires once again in the upcoming elections, scheduled for 2004.

T.D.L.: Mongolia is currently facing the backlash from this economic transition, which created a particularly rocky economic situation. Could you describe how the shift towards a market economy has affected your country? Have you made significant headway with structural reforms, most notably as concerns taxes, price decontrol, bank restructuring, and the privatization process? What are the Mongolian government’s top priorities as it tackles the grave social problems weighing on your country?

H.E.T.B.: The past decade has been a very difficult transitional period. Building a market economy from scratch was a highly complicated undertaking for a country like Mongolia, which lost decades in socialist experiments. What’s more, Mongolia had an isolated economy that was intricately linked to the Soviet Union. The USSR eventually disintegrated, abruptly ending the Soviet aid that accounted for one-third of Mongolian GNP. On a wider level, the sudden break with CAEM countries paralyzed the Mongolian economy in the first part of the 1990s. Business shutdowns, a shortage of energy and raw materials, and insufficient investments pushed Mongolia up against the wall. Both GDP and foreign trade dropped sharply. Inflation, on the other hand, climbed to 325% in 1993. The transition left the Mongolian people impoverished and destabilized. Over one-third of the population lived below the poverty line. We were confronted with the new reality of unemployment. Finally, Mongolia’s landlocked position was – and still is – a roadblock to the country’s development.
In these difficult circumstances, a succession of democratically elected  governments simultaneously carried out political and economic reforms in Mongolia. Donor countries as well as international financial institutions came to Mongolia’s aid, helping it overcome the difficulties caused by the transition and move towards a market-based economy. Liberal-minded measures were launched, with the aim of shoring up Mongolia: price liberalization, the adoption of a floating exchange rate, and the privatization of the herding industry (some 27 million head of livestock) as well as SMEs. In 2001, Mongolia’s parliamentary body approved a program to privatize large state-owned enterprises from 2001-2004, and enacted the Law on Private Land the following year.  We have made strides in reforming the banking, financial and tax systems, and have adopted new legislative codes in these areas. Large banks like the Trade and Development Bank and Khan Bank were recently privatized, and a dozen private banks have been created. We have been working on restructuring and privatizing the social sector since 2002. Between 1996 and 2003, the private sector’s share in GDP grew from 45% to nearly 80%. And while it has yet to be classified as such, the Mongolian economy now has all the characteristics of a market economy.  GDP rose 3.9% in 2002, despite the fact that we lost 10 million head of livestock to natural disasters (extremely harsh winters and drought from 2000-2002). Inflation fell to 1.6% last year, the lowest level since 1990. The budget deficit has been cut from 11.6% of GDP in 1998 to 5% of GDP in 2001. Over the past decade Mongolia has also carried out a full-scale revolution in the information and communications sector. These are all positive changes, and yet Mongolia’s macroeconomic progress is still rather shaky. This is why the government’s main objectives for the middle term remain unchanged: reinforcing macroeconomic stability, attracting foreign direct investments, promoting private investments and exports, making Mongolian enterprises more competitive, expanding economic and social infrastructures, ensuring stable economic growth, and reducing poverty.
The government has put forward a series of political measures with the aim of speeding up the country’s development and ensuring equal conditions, so that all citizens can benefit from our new market-oriented economic ties. These include a plan to promote regional development in Mongolia as well as the “Millennium Road” project, which entails the creation of five big economic regions linked by East-West and North-South routes, which are already under construction. We have launched several large-scale projects, with the aim of building a unified energy system throughout the country. Land privatization is also moving forward. In the social arena, the government is setting up a program to improve the living standard of Mongolian families, with help from international financial institutions. It also plans to introduce an equipment leasing system for stock breeders, farmers and small businesses. The goal is to increase their revenues, bolster the private sector, and reduce unemployment. It will also grant long-term loans to individual Mongolians for home construction or improvement. The government is encouraging stock breeders and farmers to set up cooperatives. In view of the new circumstances both inside and outside the country, the Mongolian government is laying out a new national development program that will run until 2021, in compliance with the decree issued by the President of Mongolia.

T.D.L.: Prime Minister Enkhbayar’s government is determined to open up the country’s economy, laying special focus on encouraging greater foreign investment. Have special measures been taken to attract more foreign capital to Mongolia? Is your country taking steps towards tapping its rich natural resources? In the long term, does Mongolia have any other option but to allow the debt to continue piling up, which may well be necessary, but has yet to prove effective?

H.E.T.B.: The Mongolian government lays great weight on encouraging foreign investment, a decisive factor for achieving rapid economic growth, introducing new technologies, and building export-oriented industries. Mongolia began working to open up its economy at the start of the 1990s. It encouraged greater foreign investment by enacting the 1991 Law on Foreign Investments, which was revised in 1993, 1996, and 2002 with the aim of further improving the foreign investment climate. To this same end, the Mongolian government signs “stability agreements” with foreign investors, who receive significant tax exemptions. We have enacted laws concerning the creation of free zones and industrial parks. The country’s first free zone is under construction in Altanbulag, in northern Mongolia, and will be followed by many others. The Mongolian government baptized 2002 the “Year of Investments.” In September 2002, 17 international organizations and some 500 investors from 44 countries came together around this theme.
Mongolia has signed bilateral agreements designed to encourage and protect investments with over thirty countries, and has exemption on double-taxation agreements with some thirty countries. It has been a member of the World Trade Organization since 1997, and joined the Washington Convention on the Settlement of Investment Disputes in 1996, and the Seoul Convention on Investment Insurance in 1999. Mongolia also joined the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. It should be noted that our country is also a full member of the World Bank’s Multilateral Investment Guarantee Agency.
Thanks to our efforts to open up the country and improve its judicial framework, we have seen a jump in foreign investments. Over 2,330 service companies and businesses have been created over the past decade, with some 70 countries investing over $800 million in Mongolia. Over 70% of these funds have been invested in joint venture companies, with the rest going to enterprises that are 100% foreign-owned. To give  you some concrete figures by sector: 27% of foreign direct investment targeted mining and oil concerns, 11% went to the textile industry, 6% to agriculture, 6% to the building trade, 6% to commerce and the restaurant industry, and 4% to the banking and financial sector. The remaining 30% targeted other sectors, including the tourism industry. Companies created with foreign investments now produce 70% of Mongolia’s total exports.
The Mongolian government wants to make good use of our country’s rich and virtually untapped natural resources and speed up the country’s development. It is thus welcoming foreign investors, by granting them an array of tax exemptions in the following priority sectors: mineral and petroleum extraction, agriculture and the food industry, infrastructures, tourism, and information and communications technologies.  We see this as an alternative to the country’s current debt-incurrment strategy, which is nonetheless wholly justifiable in the ongoing transitional period.

T.D.L.: A landlocked country snuggled between Russia and China, Mongolia opened talks with its two great neighbors in 2000, looking to strike an agreement giving it access to the sea. Has there been any headway in this area? With a significant portion of Mongolian territory lying in the Gobi, what is your country doing to curb the desertification process? On a broader level, how can Mongolia achieve sustainable development?

 

H.E.T.B.: As I mentioned earlier, Mongolia’s landlocked position has been a thorn in our side as concerns the country's  economic development. We share over 8,000 kilometers of common borders with Russia and China. Mongolia spends 7% of GDP on transportation and transit costs. To ease this burden and widen external economic cooperation, we are naturally working with neighboring countries to find a solution that gives us access to the sea. Talks on this issue are moving forward. We have already agreed on over 70% of the terms of a future three-party accord. Mongolia belongs to the Convention on the Law of the Sea, and is carrying out coordinated actions with other landlocked developing countries within the framework of the U.N. The first global conference on issues confronting landlocked and transit developing countries was held in Almaty, Kazakhstan on 28-29 August 2003, in compliance with a U.N. decree issued in 2001. The Almaty Program of Action and the Almaty Declaration were both approved, giving this group of landlocked and transit developing countries a concrete platform for launching future actions. The international community has in fact already acknowledged their specific problems and unique needs. Participants also underscored the urgent need to draw the WTO’s attention to the demands of landlocked countries, and to the high-stakes problems they are facing.  
As concerns the desertification process, this is a highly disturbing problem. The effects of planetary climate changes and global warming are clearly visible in Mongolia. The arid regions of the Gobi now cover 42.5% of Mongolia. Rainfall continues to steadily drop in these areas, while the number of days of sandstorms has increased fourfold, compared to the 1960s. In sixty years’ time, the average temperature has risen 1.56 degrees Celsius. According to experts, drought hits 25% of the country every 2 or 3 years, and 50% of the country every 4 or 5 years. Over the past forty years the desert zone has grown 6.7% larger. The temperature increase is destroying nature and turning more land into desert. This damage is compounded by men, because of overexploitation by herders since the sharp increase in livestock in the 1990s, the opening of new mines, forest fires, and an overall climate of thoughtless exploitation.
Protecting the environment is a pressing goal for Mongolian authorities. Mongolia’s parliamentary body has enacted twenty different environmental protection laws. Our country has joined international environmental conventions, including the U.N. Convention to Combat Desertification. It is in favor of working hand in hand with its neighbors, most notably with China, to expand regional cooperation on these problems. Protecting the environment is obviously a key ingredient in the country's sustainable development. In 1998 the Mongolian government approved the “Sustainable Development Program for the 21st Century,” putting economic growth, social equality, sustainable development and rational use of natural resources at the heart of the country’s development strategy. The Mongolian government and the National Council for Sustainable Development are working to protect the environment and restructure the economy and new technologies in a more effective manner. They are also encouraging stronger intellectual competition. We will have to come up with highly concrete approaches to meet the biggest challenges: improving health care and education, increasing water and energy supplies, expanding farming activities and infrastructures, and reducing poverty. They will have to take into account the unique conditions in our country, which has a small population spread out across a vast territory. Mongolia supports the initiatives put forward by France at the World Summit on Sustainable Development in Johannesburg. Right after the summit, our respective presidents exchanged letters in which they confirmed their desire to cooperate on sustainable development. I will come right out and say it: we are in great need of foreign assistance and development aid at this time. In 1991 Mongolia received $2.1 billion in aid, divided between grants (43%) and preferential loans (57%). This was 66% of the funds promised us by international organizations and donor countries,  which include France.

T.D.L.: During a recent state visit by Chinese President Hu Jintao, Mongolia and China reconfirmed a shared desire to build a “partnership of good-neighborliness and mutual trust.” What are your main objectives in strengthening these ties? Is Mongolia no longer worried about economic pressure from China?

H.E.T.B.: Developing friendly relations and multifold cooperation with China is one of Mongolia’s top foreign policy goals. Last June’s state visit to Mongolia by the President of the People’s Republic of China, Hu Jintao, highlighted our shared desire to build stable bilateral ties. As you said, both parties reconfirmed their desire to build a “partnership of good-neighborliness and mutual trust,” in the spirit of the 1994 Treaty on Friendly Relations and Cooperation. Our leaders agreed to encourage greater trade and investments, and to work together more closely in mining and producing minerals, in tapping our natural resources, and in expanding infrastructures. This is a direct reflection of the objectives laid out with the aim of strengthening Sino-Mongolian ties. Both Mongolia and China are members of the WTO, which further favors bilateral cooperation. China has become the leading investor in Mongolia, ahead of Japan, the Republic of Korea, the United States, and the Russian Federation. I am convinced that building excellent ties with our neighbors is a must, if we are to successfully open up our country and diversify its economic ties with the rest of the world.

T.D.L.: Given Russia’s gradual withdrawal from your country since the collapse of the Soviet regime, do you think Russia and Mongolia will tighten their ties in coming years? In March 2002, the two countries ratified an agreement concerning their common borders. Will they now move forward to find a mutually satisfying solution to the problem of Mongolia’s debt to Russia?

H.E.T.B.: Economic and trade ties between Mongolia and Russia have indeed fallen off substantially.  We could even say they took a nose dive, especially at the start of our country’s transitional period. That said, our neighbor to the north remains a key partner in every single aspect of Mongolian foreign relations. In these brand-new circumstances – molded by the decision by both Mongolia and Russia to move towards democracy and a market economy – our two countries have had to reforge their ties, adapting them to modern realities and freeing them from past abuses. Let me just mention the Treaty on Friendly Relations and Cooperation, signed in 1993 between the two countries. The Treaty lays out new guiding principals and new directions for bilateral relations. The renewal of Mongolian-Russian relations has been underscored by Russian President Vladimir Putin’s state visit to Mongolia in 2000 (the first time a Russian leader had visited our country since Leonid Brezchnev’s 1974 trip), Russian Prime Minister Mikhail Kassyanov’s state visit in 2002, and Mongolian Prime Minister Nambaryn Enkhbayar’s recent trip to Russia.
Our countries’ long-standing partnership provides a solid foundation for deepening and expanding our ties even further. Large joint-ventures like “Erdenet,” a factory that enriches copper and molybdenum, "Mongolorostsvetmet", "Ulaanbaatar Railways,” among many others, are playing an important role in the Mongolian economy. We have every interest in attracting Russian investments in the Mongolian mining industry and the infrastructure sector.
According to 2001 figures, Russia is one of Mongolia’s top trade partners, its leading supplier, and its third client. We are in favor of easing restrictions on bilateral trade, in conjunction with efforts to prepare Russia for joining the WTO. Mongolian and Russian authorities lay special emphasis on cooperation in border zones and regional areas, which falls within the domain of a subcommittee of the Russia-Mongolia Intergovernmental Commission. Trade between bordering regions accounts for 70% of bilateral trade. We are also working to reinforce our ties in the scientific, technical, cultural, and education arenas. 150 Mongolian students are already attending Russian universities every year, with their ranks expected to swell to 200 next year.
Finally, let me say that there is no relation whatsoever between the ratification of the agreement on common borders and the problem of Mongolia’s debt to Russia. During the aforementioned visits to Mongolia by  President Putin and Russian Prime Minister Mikhail Kassyanov, both parties agreed to resolve this problem without strangling the Mongolian economy, taking into account international practices and the specific circumstances in which the debt was incurred. Significant strides have been made in the talks since that time. The Mongolian Prime Minister’s trip to Russia this past June brought us even closer to a solution. I, for one, hope to see the problem resolved in the very near future.

T.D.L.: North Korea’s relaunching of its nuclear program has sparked tension throughout Northeast Asia. Could you share your thoughts on the situation on the Korean Peninsula with our readers? As a self-proclaimed denuclearized zone, would Mongolia like to see all of Central Asia adopt this same status?

H.E.T.B.: As a country in Northeast Asia, Mongolia is concerned about the current tension on the Korean Peninsula. It supports all efforts and initiatives aimed at transforming this region, opening the way for peace, mutual trust, and international cooperation. Mongolia is consequently pleased with the opening of 6-way talks on the nuclear problem in North Korea. It believes that a nonproliferation regime and the creation of denuclearized zones are essential ingredients for creating international security. In 1992, Mongolia dubbed its territory a nuclear-weapon-free zone. The international community gave this initiative its full support. Then in 1998, the U.N. General Assembly adopted a resolution concerning “Mongolia’s International Security and Nuclear-Weapon-Free Status.” In 2000, five nuclear powers issued a joint declaration guaranteeing the safety of Mongolia, in view of this status. At the national level, Mongolia’s parliamentary body has enacted a law enshrining the country’s nuclear-weapon-free status. Our country believes that nuclear-weapon-free zones, which now cover over half of the earth’s surface and encompass over 100 states, have an important role to play in limiting the spread of nuclear weapons. Mongolia thus supports the creation of other nuclear-weapons-free zones, particularly in Central Asia. This idea won favor with the participants at the first summit of the Conference on Interaction and Confidence Building Measures in Asia, which was convened in Almaty last year.

T.D.L.: A candidate to join the Shanghai Cooperation Organization, Mongolia has displayed a growing interest in participating more actively in the entente between nations. What role would your country like to play within the SCO? How is Mongolia coordinating its antiterrorism efforts with those of its regional partners? Along with the oil and gas pipelines already in the works, what other kinds of cooperation projects could be launched at the regional level?

H.E.T.B.: In our increasingly globalized world, achieving our objectives for the country’s development is simply unthinkable without actively participating  in the regional and sub-regional integration process and the expanding political dialogue. This is why Mongolia has made it a policy to play an active role in this process. Mongolia has declared its intention to join both APEC and ASEM. It joined the WTO in 1997, and has played an active role in the APF since 1998. Our country is a member of the Conference on Interaction and Confidence-Building Measures in Asia, which adopted the “Almaty Act” and the “Declaration on Eliminating Terrorism and Promoting Dialogue among Civilizations” at its first summit, held last year. I firmly believe that this regional mechanism can help to enhance cooperation between the countries in this region, and unite their efforts in the fight against terrorism. With regard to the Shanghai Cooperation Organization, we are keeping a close watch on how it is developing and the direction it is heading. Our country is in favor of expanding regional cooperation in Northeast Asia. We are taking part in the Tumen River Program. Within this framework, we have set up a service center for regional investors, to make it easier for Mongolia to stake out its place in the regional economy and deepen its ties with countries in this region. The projects to build oil and gas pipelines and high-voltage power lines hold great promise for encouraging and expanding regional integration. If they do cross through Mongolia, they will be a key factor in speeding up the country’s development. However, that decision is up to the main countries involved in carrying out these projects, and not to us.

T.D.L.: At the 13th Conference of Heads of State and Government of the Non-Aligned Movement, held in Malaysia on 23 February 2003, Mongolia expressed a desire to reinvigorate NAM’s role and activities. Ten years after the end of the Cold War, are NAM’s efforts just as relevant as ever? What prompted the Mongolian government’s decision to host the 5th International Conference of New or Restored Democracies in September 2003? Will your country contribute troops to future United Nations peacekeeping operations?

H.E.T.B.: Mongolia became a full member of the Non-Aligned Movement at the close of the Cold War, in 1991. It is true that today’s international climate is completely different from the climate that reigned back in the days when the movement was created. But the goals pursued by NAM are economic in scope, as well as political. The economic and development challenges currently facing the non-aligned nations – all of which are developing countries – are essentially the same as those they  faced  forty years ago. Namely: underdevelopment, the growing gap between the rich and the poor, and ever increasing debt. These problems have been compounded by environmental problems, AIDS, and other hurdles. There are a wide variety of areas wherein developing countries could work together on the international stage, within the framework of the Non-Aligned Movement and the Group of 77.
As for the second half of your question, NAM members were the ones who put forward the idea of creating the International Conference of New or Restored Democracies (ICNRD), which won the support of the United Nations. In the years since the first Conference brought together thirteen countries in Manilla, in 1988, the ICNRD has turned into a global event that unites some one hundred developed and developing countries. This year the 5th International Conference is being held 10-12 September in Ulaanbaatar, and will be attended by over 120 countries and international organizations. The Conference will focus on the themes of "Democracy, Good Governance and Civil Society.” Our motives for hosting the Conference are quite simple. Mongolia is a young democracy, just barely over ten years old. This is a rare opportunity, not only for Mongolia but also for other countries. It is a chance to exchange the experiences we have piled up in this great enterprise, and to identify ways to strengthen and enhance democracy at both the national and international levels.
With regard to the last part of the question, in 2002 Mongolia’s parliamentary body enacted a law on the participation of Mongolian troops in U.N. peacekeeping operations and other international actions. The past three or four years have seen the launching of measures designed to prepare Mongolian military observers and soldiers to serve in U.N. peacekeeping forces. They are undergoing training and are participating in military exercises with peacekeeping forces. Mongolia has already sent military observers to the Democratic Republic of Congo and to the Western Sahara, as part of of U.N. peacekeeping operations. Some 200 Mongolian soldiers, doctors and engineers have been sent to Iraq to help rebuild this country. While on this subject, let me add that Mongolia believes the U.N. should play a key role in rebuilding Iraq, transforming it into a sovereign, independent, democratic and prosperous country worthy of the Iraqi people.

T.D.L.: Finding new trading partners is another important goal for the current Mongolian administration. Could the European Union play a significant role in Mongolia’s development? How would you describe your country’s current ties with Eastern countries, once key economic partners for Mongolia within the confines of COMECON?

H.E.T.B.: Enhancing and expanding diversified cooperation with the European Union and its members is one of Mongolia’s top foreign policy goals. The E.U. strongly supported Mongolia’s transition towards a democratic system and a market economy, and continues to do so. Working within the framework of the ALA and Tacis programs, the European Union has implemented or is carrying out some 90 different projects, investing over 50 million euros in sectors essential to the country’s development. These include, among others: higher education, health care, agriculture, herding, the promotion of SMEs, tourism, the environment, and information technologies. This cooperation is currently focused on three main areas: rural development, bolstering the private sector, and helping spur economic development. This assistance is designed to help us surmount the negative impact of the transition.
In order to deepen our ties with the E.U., which  accounts for under 10% of trade and foreign direct investment in our country, Mongolia would like to sign a Partnership and Cooperation Agreement that would widen the scope of the 1992 Trade and Cooperation Agreement. What’s more, the European Parliament has already voiced its support for a PCA, in its 1994 resolution on “the political situation in Mongolia.” This was a strong gesture of support for my country on behalf of the E.U., at the height of a difficult transition. There have been numerous positive changes in Mongolia since that time. At present, we believe that the European Parliament could issue a new resolution that puts the accent on expanding E.U.-Mongolia cooperation in the economic, commercial and financial arenas, as well as in other areas. I think that easing restrictions on trade and signing a free-trade agreement with the E.U. would spur even greater cooperation. We continue to explore ways to improve Mongolia’s status with the European Bank for Reconstruction and Development, with the aim of qualifying for EBRD loans. To sum up, let me underscore that strengthening our ties with the E.U. and its members, in any shape or form, is in the best interest of both Mongolia and the E.U.
In light of the enlargement of the European Union, our relations with Eastern European countries must obviously be adapted to comply with the realities of a 25-member Union. We will nonetheless work to safeguard the positive accomplishments of the past, which have been revitalized during the 10-year transitional period. These countries now account for 7.7% of foreign investment in Mongolia. With the enlargement, the E.U.’s borders are “edging closer” to Mongolia. I would hope that Mongolia’s long-standing ties with the countries of Eastern Europe will work in favor of expanded cooperation between our country and the enlarged Union.  

T.D.L.: Franco-Mongolian ties have been greatly boosted by the opening of a permanent French embassy in Ulaanbaatar in 2002. Are prospects good for strengthening these ties even further, especially in the trade arena? During an official trip to Mongolia, French Secretary of State for Foreign Affairs Renaud Muselier visited the excavations sites opened by French archeologists at Gol Mod, in western Mongolia. Are these discoveries of great importance for Mongolian history? In what other areas could bilateral cooperation be enhanced?

H.E.T.B.: I would like to underscore, first and foremost, that France and Mongolia’s ties date back several centuries. 850 years ago, Louis IX sent renowned Frenchman Guillaume de Rubrouck to visit the Mongolian Empire. After this voyage, the two powers kept up their diplomatic ties. We still have a letter sent in 1289 by Arghun Khan to the king of France Philippe IV, as well as a letter from Ulziit Khan to the same ruler. It can be rightly said that French interest in Mongolia has never died out. As early as the 17th century, French scholars were the first to study the history of the Xiongnu people, (to whom we refer as ”Khunnus,”  forebears of the Mongols).  A Franco-Mongolian archeological mission researching this period has been working inside Mongolia for the past ten years, operating under the joint patronage of the presidents of Mongolia and France. The mission has made rare discoveries that are extremely important for the study of Xiongnu history and civilization. We must now wait for the archeologists’ findings and conclusions. It must be said that France’s Mongol scholars have always been revered by their foreign colleagues. The Mongolian language has been taught in France for 125 years. The first Mongolian students came to France in the last century, in the late 1920s.
But let me move on from this historical overview to current French-Mongolian relations. France has supported Mongolia’s transition towards democracy and a market economy from the very start, by offering assistance in the political, economic, and financial arenas. The reopening of the French Embassy in 1996, its subsequent expansion, and the appointment of a permanent ambassador during last June’s official visit by French Secretary of State for Foreign Affairs Renaud Muselier, have been very positive steps forward for Franco-Mongolian relations. And while France still plays a modest role in Mongolia’s economy and trade, with under 1% of the Mongolian market, there are great opportunities for expanding bilateral cooperation between our countries in a wide variety of areas. The concrete aspects of our ties and the prospects for deepening them were discussed during the visit to Mongolia by the French Secretary of State for Foreign Affairs. The talks continued during visits to France by the Mongolian Minister of Infrastructure and the Minister of Food and Agriculture, in March and May of this year. Agriculture, livestock breeding, and tourism are the key sectors for bilateral cooperation. It should also be said that several French businesses and companies, including Alcatel and Pechiney, have managed to carve out a strong hold in the telecommunications and mining sectors. Let me also note that we have already signed the main agreements that constitute a solid judicial base for expanding bilateral cooperation: the Intergovernmental Agreement on Friendly Relations and Cooperation; the Encouraging and Mutual Protection of Investment Agreement; and the Exemption on Double Taxation Agreement. We are putting the final touches on an air services agreement, and negotiating an agreement for cooperation in the tourism sector. We are also reworking the 1968 Cultural Cooperation Agreement, bringing it in line with modern realities. We must now focus our attention on finding the best way to satisfy our mutual interests. French economic agents and French investors are more than welcome in Mongolia. Our country’s landlocked position and limited domestic market are not a problem, because of the enormous potential outlets on the markets of our two great neighbors.
I want to emphasize that decentralized cooperation can play a key role in our future relations, at every level. French and Mongolian communities have stepped up their contacts in recent years, often working through goodwill associations and non-governmental organizations. NGOs are working with local authorities to organize a variety of cultural events. The most recent example is “Mongol Days,” organized as part of the 26th Clermond-Cournon Fair, held from 6-16 September 2003. Thanks to these efforts, the French people are gaining a better understanding of Mongolia, and its culture and traditions. The number of French tourists visiting our country is also rising steadily. NGOs are carrying out humanitarian operations, both in rural zones and in Ulaanbaatar, coming to the aid of the local population in areas such as health care, food supply, and veterinary medicine.
Our countries have been cooperating in the cultural, scientific and technical arenas for many years. This work has been a resounding success. The French Cultural Center opened its doors in Ulaanbaatar in 1997, and has since become a major pole for promoting French culture and language in Mongolia. A significant number of Mongolians are studying French in our schools and institutes of higher education. A good number also go to France to complete further training. Over twenty French students study Mongol at INALCO every year. They are the future “leaders” of our cooperation efforts. We are very keen on having young Mongolians train in France’s universities and “grandes ecoles.” If we are to encourage and expand Franco-Mongolian ties in a variety of sectors, then we must lay more focus on training specialists. Finally, Mongolia supports France’s approach to cultural diversity. We share the same interests as concerns sustainable development, as I mentioned earlier. In conclusion, on the eve of the 40th anniversary of the opening of diplomatic ties between Mongolia and France, which we will commemorate in 2005, there is great promise for further enhancing Franco-Mongolian cooperation, in view of the age-old traditions and universal values that our two countries continue to share.