The Asia-Pacific Community and Mongolia's Position: General Prospects

Several years ago the former President of the USA G.Bush father first put forward the idea of an Asia-Pacific Community in his speech at the Waseda University.  Economic and trade relationship among the countries of the region is increasing. Though the looming economic crisis is associated with erroneous financial strategies based on the excessive state participation and regulation of economic affairs in some Asian tiger countries there are some signs that it is a result of deliberate actions taken by western countries and that it will not very much affect the economic pace of the Asian countries. Asia is a vast market with over two billion consumers and one may say that some sort of “Great China’ economic zone comprising continental China, Taiwan and Hong Kong  is being formed. It has been also reported that at the initiative of the People’s Republic of China an economic grouping ASEAN+3 or ASEAN + China, ROK and Japan is planning to set up the Asian World Trade Organization. For the last 10 years the annual economic development rate of China that has a population of over one billion is exceeding 10 per cent. Though the PRC has succeeded in utilizing the development strategies of the four Asian tigers it is implementing its own concept of preventing any drastic fall from the economic growth to uncontrolled decline.

On the other hand, at present not a wind but a storm of democracy has started to blow in the Asia-Pacific region. In the countries with political dictatorship and military regimes the educated and wealthy strata of population is growing and demanding political democracy. In order to grasp the future prospects of this region one should be aware of the positions of such countries as the USA, Russia, China and Japan.

USA .One of key issues is whether the USA will retain its agreements with Japan and South Korea, in case these agreements are retained, what they will defend and from whom. ASEAN countries are very cautious and apprehensive that if the USA withdraws its troops from the Korean Peninsula and other areas a military vacuum and change in balance of power will emerge in the region. It is probable that the role of the American military presence in the region will undergo gradual changes and shift towards safeguarding the region from potential threats. American trade with Asia reached 63 billion US dollars that account for 36 per cent in overall US foreign trade and that constitute a major condition for further expansion of trade and economic relations. Some influential countries in Asia strive to reduce the American influence. The US Congress and American people are less supportive of the US role as the world policeman.

RUSSIA.  Notably, Russia has now gained more recognition as an Asia-Pacific nation. Russia’s economy is more and more dependent on the natural resources of  Siberia and the Far East. After the loss of the Baltic countries and the Black sea ports, Russia’s Pacific ports have acquired greater importance. Being a super power in military terms, Russia is now faced with the necessity to enlarge its participation in the region’s economy. In this respect Russia is placing much hope on Integrator 21 project comprising the Siberia and Far East which was worked out in 1992. But its implementation pace is very slow due to underdeveloped infrastructure, uncertain legislature, existence of unsettled territorial problems with Japan and absence of clear-cut division of responsibilities between Moscow and local authorities The new Russian Government does not make efforts to this effect. However, being a permanent member of the UN Security Council Russia plays a principal role in forging the regional security system and succeeded to ensure its substantial participation in the regional cooperation. Uncontrolled migration of many millions of the Chinese nationals to Siberia and Far East may affect Russia’s national security. It seems that it will take at minimum half a century to achieve the status of a Great Russia.


JAPAN If Russia is a military super power, Japan is an economic super power. Though defeated in the World War II Japan still has no Peace Treaty with Russia. Japan is faced with the necessity to finally settle problems related to its historical past with China, South East Asian and Pacific countries and to specify its new role in the region. Japanese businessmen and influential politicians have recently put forward a neo-Asianism concept that implies bringing Japan back to Asia. This concept also embraces such issues as strengthening the mechanism for maintaining regional peace, enhancement of the military strategic treaties with the USA, integration of former socialist countries and in particular, Russia, China and Vietnam into the regional community.

Japan pays attention to getting rid of its image as an economic giant but a political dwarf and is pursuing a policy aimed at becoming a permanent member of the UN Security Council and to increase its participation in maintaining the world peace. Despite the continuing economic crisis over the last 10 years and shrinking of its financial and bank markets Japan managed to find new opportunities through developing partnership with developing countries.


CHINA.   Since Tiananmen  events in 1989 China succeeded to overcome its diplomatic isolation and enhance its position not only in the Asia-Pacific region but in the entire world. China has normalized its relations and restored diplomatic relations with some Asian countries. It succeeded in attracting investments through the Chinese nationals in Taiwan and Hong Kong. China restored its relations with the USA and European countries. The Chairman of the PRC visited the USA several times. President G.Bush said that China was the main strategic rival of the USA and this statement is regarded as the formal recognition of China’s role in the world that paves the way to China’s status as super power. However, China’s internal situation is a matter of some concern.. In other words, it is important to know what the position of the new party and state leadership will be, whether they will pursue the doctrine of political stability.

At present the Chinese society is living in an atmosphere recognizing the existence of various types of ownership and different systems. The time when the leadership’s policy has been strictly followed has gone into oblivion and now only in upper layers everything is done according to regulations but at middle and lower levels money governs everything. In this context the prospects of the Chinese economy are in the focus of the attention. Judging from statistical data and conclusions made by researchers and diplomats and other sources, the period of high achievements for China is nearing end and a more complicated and long period of changing the structure of the national economy and adjusting it to world market is starting. How this state of the Chinese economy will affect the region, including our neighbor Russia is a very important question for us.

Taking into account all considerations one may conclude that if our southern neighbor becomes an economic super power, the history may repeat itself and our country may become a long-time resources supplier of China. Our country now exports only three types of strategic goods. Excluding the natural resources, 90 per cent of leather and cashmere are exported to the south, to be exact to Hebei province of the PRC. Hebei province is our raw materials processing base and performs the role of the next stage distributor and is supported by the “state policy”.


How is the position of Mongolia evolving?

A few years ago Mongolia, sandwiched between the USSR and the PRC, solved its political and economic problems within the COMECON and had close relations with the USSR and other countries of Eastern Europe. Now Mongolia has gone beyond our two neighbors and develops, extending the net of friendly relations with any country in the world, and enjoys a possibility to restore its status of an Asian country. In a short span of time of the democratic process Mongolia has established normal relations with such influential countries of the world as the USA, Japan, South Korea, PRC and other countries of the Asia-Pacific region. Mongolia joined the IMF, World Bank, the Asian Development Bank, World Trade Organization as a member and formed a donors’ community to help it pass through the transitional period. But how long that will last is a question that calls attention.

A new phenomenon in our foreign relations is that such countries as the USA and Japan influential not only in the Asia-Pacific region but also in the world play a substantial role. The reason for that is the development of the democratic process in Mongolia, establishment of a constitutionally approved mechanism for ensuring human rights and freedoms. The donor countries seemingly seek to showcase to our two neighbors, modeling Mongolia, how a country that made transition to a democratic system can develop. But actually the USA is not consistent in its policies, sometimes interested, sometimes not and seems to be hesitant whether to take or to give up. The fact that the USA is trying to involve the western countries and its other allies should be regarded as an attempt to prevent too close relationship between Russia and China. How to encourage these policies and coordinate our interests with others is a test for our state and Government, mainly the Ministry of Foreign Affairs. It is necessary to create economic interest in our country for these powers.

Otherwise it will take a long time before Mongolia finds its own place in the region. Japan, being an Asian country, has a geographical interest in our country. Thus, our foreign relations are likely to become dependent on the USA and Japan. The increasing influence of China and the state of Sino-American relations may also have an impact on our foreign relations. This emanates from a change of influence balance in favor of the southern neighbor whose interests and influence are increasing. This may be connected with the fact that for the last ten years our state and Government made Beijing a window to our relationship with the rest of the world. Though geographical location contributes to more interdependence of other factors, such as air traffic, transit traffic, land lease, deployment of peace-keeping force, sacrifice of some economic capabilities may lead to more effective relationship and creation of interdependence.

The Asia-Pacific region, including East Asia is a priority in our foreign relations. As the interests of the USA, Japan, Russia and China intersect in this region and Mongolia is included in the sphere of their interests we should work to enhance our position here. What region should be given priority in integrating a land-locked Mongolia into world political and market relations is a pressing issue. Now it is evident that the Asia-Pacific region, the North East Asia /Japan, Korea, Russia/ is the most promising in this respect. The countries of this region are geographically close to Mongolia, provide access to sea, supply investment, equipment, technology necessary for our country’s development. Especially, cooperation with Japan and South Korea is vital in changing the structure of our raw materials-dominated exports. As Mongolia’s production continues to fall and the national currency exchange rate is low, Mongolia in terms of per capita GDP belongs to the group of developing countries and by some indicators even to LDCs. Our important objective should be to work out and implement a development strategy and development concept to overcome this situation. Nothing can replace the efforts of the country itself. Developed countries prefer to support the countries striving to build economically viable and socially equal society. Developed countries consider that if a developing country suppresses the people’s initiatives or limits individual’s right to get a free access to information foreign assistance cannot be effective and therefore they put forward some criteria for providing aid. Special attention is paid to poverty alleviation, food safety, rural development, environmental protection and education improvement. In other words, much depends on proper utilization of development aid.

Nowadays when Mongolia is open to the world there is a vital need in a comprehensive national development concept and policies that combine transformation theory with development issues. The pace and effectiveness of the transition is measured by a number of indicators such as time span, expenses, level of acceptance, practical capabilities, etc. The time factor includes the time necessary to carry out the transition process. As far as Mongolia is concerned, due to strategic policy and concept the transition process tends to be slow. It is rather complicated to estimate the expenses. The expenditures related to elimination of the old ineffective system are not included in the estimates. The expenses rise due to supply shortages, quality of goods and ecological pollution. The elimination of ineffective expenses of the old system should be the main objective in transforming the system. In this respect the policies of the Government led by M.Enkhsaikhan has  a good start in the right direction but subsequent governments that did not have any policy or concept have failed to implement this objective and caused even greater expenses. The incumbent Government though has rightly formulated its policies lag in practical and professional implementation of the planned measures tied by the election promises. The transitional expenses should be dependent on the transformation policies. In other words, the expenses depend on policies in the area of property rights, technological renovation and structural change.

Level of acceptance or acceptance criteria indicate the acceptance and support by the population of the structural changes. It is specified by interlink between acceptance and opposition or by the level of trust to the leadership, by the state stability, political education and vision for the future and many other factors. To be frank, the colors, whether yellow, black or white do not matter. The main point is to have a stable governance in the nearest at least 10 years. In this context it is necessary to reconsider such issues as balance of power, structure, the Constitutional provisions related to the division of responsibilities. The reason is that due to excessive zeal on the part of some politicians the primacy of logics has been violated at that time and it is necessary to rectify the existing vagueness.

Practical skills imply the capability to ensure practical and constructive implementation of the given policies or concepts. The monitoring of the transition policies with application of these criteria will have a positive effect on the transformation process.

The formulation of the foreign policy and the development strategy of a developing country in transition, gaining its place in international relations of the region will largely depend on how this country meets the above-mentioned criteria in its domestic policies .Only in this case favorable conditions will be created for the formulation of sound policies and concept of Mongolia’s national development.