Mongolia: The Next Asian Tiger?
J. Berkshire Miller
September 15, 2014
A new Free Trade Agreement with Japan is a good sign. But more action will be needed to jump-start Mongolia's economy.
The news of July’s agreement in principle of the Mongolia-Japan Free Trade Agreement (FTA) was merely another addition to Tokyo’s stable of trade agreements in Asia. But for Mongolia, the trade pact with Japan is of far more significance—and not merely because it was with the world’s third largest economy. The conclusion of negotiations represents Mongolia’s official entry into East Asia’s proliferation of trade agreements, as this is the country’s first FTA. Meanwhile, Ulaanbaatar is also studying proposed agreements with South Korea and China.
Ties with Russia also remain vital to Mongolia’s prosperity and Elbegdorj has looked to enhance the relationship with Moscow, despite strong international pressure against Russia due to its actions in the Ukraine. At the recent Shanghai Cooperation Organization (SCO) summit in Tajikistan, Elbegdorj took part in a trilateral summit meeting with Xi and Russian president Vladimir Putin. During the meeting, Xi proposed the three countries create a trilateral “economic corridor” that would serve as a modern-day Silk Road.