Falling Coal Prices Help China’s ‘New Silk Road’ Win Over Mongolia(0)
Mongolia’s Minister of Foreign Affairs L. Bold made an official visit January 16–21, 2014 to the PRC at invitation of his counterpart Wang Yi. The most interesting result from the trip may have been the fact that it was widely covered by Chinese media, while in Mongolia there was muted coverage. For example, the Chinese press pointed out that Bold was the first foreign minister to visit Beijing in 2014 and that it was his first overseas trip of the year (China.org.cn, January 17; China Daily, January 20), while neither facts were mentioned in Mongolian press accounts. The official Chinese press spun Bold’s comments on Mongolia’s desire to be a conduit to connect the greater Central Asian and North Asian region and link China and Russia, as Mongolia seeking to strengthen “closer integration with China, Russia” (China Daily, January 20). Chinese reporting heavily emphasized China’s contribution to Mongolia’s economy but the Beijing press did not mention the Mongolian Foreign Minister’s 2 day trip to Urumqi, which was prominently featured in Mongolian governmental and independent press sources. However, on his visit Minister Bold acknowledged the key role China has played in Mongolia’s growth: “Trade and economic collaboration is the driving engine of the Mongolia-China strategic partnership. We are developing fruitful cooperation in the fields of mining, construction, road transport and agriculture, and in banking and financial areas” (aisanewsnet.net, January 20).
China has been Mongolia’s leading trade partner and investor for almost 15 years. However, Mongolia is facing a drop in its export income, which was 2.6 percent lower in 2013 than 2012, amid a decline of 41 percent in shipments of coal by value, the nation’s biggest earner. According to the Mongolian National Statistics Office, total export earnings were $4.27 billion in 2013, compared with $4.38 billion in 2012. China accounted for 87 percent of these by value, with sales falling to $3.7 billion last year from $4.06 billion a year earlier (english.news.mn, January 14). Mongolian coal exports alone fell to $1.12 billion in 2013 from $1.9 billion in 2012. Volume fell to 18.3 million metric tons, from 20.9 million tons (Mongolian National Statistics Office website). This trend could possibly continue since on the day of Foreign Minister Bold’s arrival, the Chinese government announced it would increase its own new coal production capacity by more than 100 million tons—six times over 2012 and equal to 10 percent of U.S. annual usage. The vast increase would meet Beijing’s goal of placing 860 million tons of new coal production capacity into operation through 2015—more than India’s entire annual output. The National Development and Reform Commission (NDRC), China’s most powerful planning authority, approved construction of 15 new large-scale coal mines with 101.3 million tons of annual capacity in 2013 projected to cost $8.9 billion. Nevertheless, despite output expansion, it is thought by foreign experts that Beijing will continue to need to import more coal both to replace 300 million tons of old capacity that has been closed for safety and environmental reasons since 2003, and to meet quickly growing energy demand (Coal Age, January 17).
On the first day of the visit, the two foreign ministers shared views on Sino-Mongolian relations and cooperation during this 65th year anniversary of bilateral diplomatic relations and 20th anniversary of the Treaty on Friendly Relations and Cooperation. The Chinese press emphasized that the agreement aims to increase annual two-way trade volume to $10 billion and explore the feasibility of building a free-trade zone (Xinhua, January 17; People’s Daily Online [English], January 17). Wang and Bold signed a memorandum outlining joint commemorative activities to take place throughout the year, and then held a joint press conference. The Mongolian Ministry of Foreign Affairs has not released its version of the text, but the Chinese Ministry of Foreign Affairs immediately revealed information on four points covered in this memorandum:
On January 17, Bold met with Chinese Vice-President Li Yuanchao. Li announced that China is making its neighbors a priority, in particular Mongolia, through a trust-building, open-hearted and mutually beneficial policy. In response, Foreign Minister Bold said that “Mongolia’s Government is for closer cooperation with China and deepening bilateral strategic partnership relations with new content” (The Mongol Messenger, January 24). Bold also visited Chinese State Councilor Yang Jiechi to discuss a wide range of bilateral, cooperative, regional and global issues.
That same day, Foreign Minister Bold delivered a speech entitled “Together for a Peaceful Future” at the China Institute of International Studies (CIIS), in front of over 80 people from the PRC Ministry of Foreign Affairs, diplomatic missions and research organizations. He reviewed current Sino-Mongolian relations and introduced the mechanism entitled Ulaanbaatar Dialogue on Northeast Asian Security initiated in April 2013 by Mongolian President Tsakhia Elbegdorj to build confidence and peace in the region through developing Track I and Track II dialogue mechanisms. In a summary of Bold’s speech released only by CIIS, it stated that the Mongolian Foreign Minister stressed that “trade and economic cooperation constitutes an important component of the bilateral relations…particularly in mining and infrastructure that have started to bear concrete results” (ciis.org.cn/english, January 20). After the presentation, Bold answered questions about the structure of the Ulaanbaatar Dialogue, Sino-Mongolian trade cooperation and his view of Japanese Prime Minister Shinto Abe’s visit to Yasukuni Shrine. For Mongols, the Shrine issue does not carry any sensitivity, and Bold was willing to say only that Mongolia “understood” China’s view of the issue, but did not endorse it.
Foreign Minister Bold also gave an interview to China Central Television (CCTV) which covered the Mongolian political and socio-economic issues and recent developments in bilateral ties. China Dailyquoted him as saying that regional integration of Russia, Mongolia and China will provide enormous business opportunities: “Our common goal is to improve overall regional integration, so we are planning big infrastructure projects and production facilities linking Russia, Mongolia and China. This will improve connectivity in the greater region of Central Asia and North Asia” (China Daily, January 20). He seized the chance to visit the Secretary-General of the Shanghai Cooperation Organisation (SCO), Dmitry Mezentsev, and expressed Mongolia`s willingness for further active cooperation with the organization. Minister Bold also received ambassadors from over 40 countries accredited to Mongolia but based in Beijing to introduce the priorities, goals, and current foreign policies of Mongolia, and met with Mongolian diplomats working in the embassy in Beijing (montsame.gov.mn, January 17; montsame,gov.mn, January 19).
Visit to Xinjiang
On January 18–19, Foreign Minister Bold left Beijing to travel westward to the Xinjiang provincial capital of Urumqi and Khorgos border checkpoint with Kazakhstan. There he held talks with the Vice Chairman of Xinjiang Uygur Autonomous Region, Shi Dagang, on bilateral efforts to increase trade and people-to-people contacts among provinces in the western regions of the two countries. Attending these meetings were Mongolian officials from Khovd province, who presented concrete proposals to stimulate bilateral border check-point activities and ease related regulations. In addition, Bold visited the Qinghua Energy Group, which has built a refined coal chemical industrial zone in Yining County, 90 km away from the Khorgos checkpoint. Qinghua Energy Group’s coal-to-natural gas (CTG) project began operations there in 2013 (Mongolian Ministry of Foreign Affairs website,www.mfa.gov.mn, January 21). Mongolia is planning to develop this type of technology in an industrial park in the south Gobi. The Foreign Minister also visited the Urumqi-based Micro Financial Service company, Tian, which was developed by investment from Khas Bank, one of Mongolia’s largest banking institutions with a particularly strong presence in countryside areas.
The trip to Xinjiang follows Mongolian Prime Minister Norov Altankhuyag October 2013 visit to Chengdu, Sichuan’s 14th Western China International Fair. At that time Altankhuyag suggested that Mongolia is seeking ways to organize demonstration cooperation projects between different Chinese regions as a way of “playing a more active role in the overall development of the strategic partnership between Mongolia and China” (Sichuan Provincial People’s Government website, 22.214.171.124:82/gate/big5/www.sc.gov.cn, October 22, 2013). Mongolia now has limited economic ties with Xinjiang, an area with relatively few Mongol ethnics among the population. However, in Mongolia’s west there are Mongol Kazaks and other small minority groups which could benefit from increased cross-border trade. Expanding outreach to the western regions of China both strengthens Mongolia’s Central Asian connections, and is a potentially troubling message to Beijing that the Mongols will not let relations be entirely defined by PRC central government authorities.
At the end of his official visit, Bold returned to Beijing to speak at the Diplomatic Academy, where he discussed finalized proposals for Mongolia to send its diplomatic personnel for training and shared his experiences from his Xinjiang visit (Montsame, January 22; english.news.mn, January 22).
Mongolia has been faced with a slump in earnings and declining foreign investment as economic growth cooled somewhat in the past two years due to an unstable foreign investment legal environment and continuing disputes with key western and Chinese investors (english.news.mn, January 14). Foreign Minister Bold’s China visit clearly indicates that Mongolian policymakers understand the importance of China to the near term development of its economy, even though they are devising strategies to seek out more diversified trade partners. Fall of income from coal exports in 2013 was a warning signal that the Mongols take very seriously. Bold illustrated the very pragmatic approach that Mongolia gives top priority to developing friendly relations with China, acknowledged that China’s development was an important opportunity for Mongolia, and vowed “to cement substantial cooperation in various areas and promote common development” (China.org.cn, January 17). Although the Chinese political leadership publicly emphasized the importance of economic relations with Mongolia, the prominence given to discussions with Bold in the media illustrate that it sees an opportunity to turn the successful discussions into actions which could build mutual strategic trust, enhance beneficial regional cooperation, and deepen the bilateral strategic partnership as well as provide prosperity and economic benefit for both countries’ citizens.
Kazakhstan may be renamed to get rid of the ‘stan’ ending: President Nazarbayev(0)
Kazakhstan’s President Nursultan Nazarbayev believes the possible change of the country’s name should be publicly discussed, according to his statement published at his official website Akorda.kz.
“Kazakhstan has the “stan” ending like many other nations of Central Asia. Foreigners are showing interest in Mongolia, whose population only stands at 2 million people [as compared to almost 17 million in Kazakhstan].
Mongolia has no “stan” ending in its name. Maybe we should consider renaming Kazakhstan into Kazakh Eli [Kazakh version for Kazakh People]; however, such a change must be publicly discussed to know the opinions of common people”, he said when attending a school in Atyrau in the West of Kazakhstan.
He suggested public discussions when responding to writer Rakhimzhan Otarbayev when the latter said that most people would embrace the idea of renaming the nation.
President Nazarbayev emphasized that Kazakhstan would only achieve all the set goals through maintaining unity and tolerance of its people. Our advantage is the ethnic diversity of the nation, he said.
SOUTH KOREANS SEETHE, SUE AS CREDIT CARD DETAILS SWIPED(0)
The theft of personal information from more than 100 million South Korean credit cards and accounts, reportedly including those of President Park Geun-hye and UN chief Ban Ki-moon, has ignited a storm of anger and litigation against credit firms.
Worried Koreans on Tuesday packed into branches of one of the banks hit by the theft to ensure their money was safe, while lawyers said 130 people joined a class action suit against their credit card providers in what is expected to be the first of multiple litigations.
“Of course I’m angry. Anyone might know when I pay my credit card bills, let alone my phone number and where I live. I might as well keep all my money in my closet,” said one card user, Lee Young-hye, outside a bank branch.
The biggest breach of personal privacy ever in South Korea has further highlighted the vulnerability of credit card information after tens of millions of U.S. cardholders’ details were stolen from retailer Target Corp during the holiday shopping season.
South Koreans on average have more than four credit cards, something that has contributed to one of the highest levels of personal debt relative to the size of the economy in the developed world.
The data security breach affected around 15 million cardholders, according to official estimates, by far the largest in a series of such scams against financial firms in South Korea going back to 2011. Some previous attacks involved hackers believed to originate from North Korea, but this one seems to have been an inside job.
Financial regulators said a contractor with the Korea Credit Bureau, a private firm that manages the credit information of millions of Koreans for financial services providers, simply loaded details of 105.8 million accounts held by KB Kookmin Card Co Ltd, Lotte Card Co Ltd and NH Nonghyup Card onto a portable hard drive.
The technician was allegedly working on forgery-proofing credit cards when he committed the theft in February, June and December last year, according to regulator Financial Supervisory Service (FSS), citing the prosecutor’s office leading the investigation.
The man then sold the information to at least two people including a loan marketer and a broker, the FSS said. The contractor and at least one other person have been arrested.
VICTIMS SUE, DEMAND ANSWERS
The first class action lawsuit was filed against the three credit card companies late on Monday, a day after the FSS revealed the full scale of the theft, according to the law firm representing them.
The victims are each claiming 110 million won ($103,400) in compensation. Lawyers said they expected more lawsuits to come, as internet chatrooms and social media seethed with complaints about the security failure.
“We are preparing additional lawsuits regarding the case and are receiving applications from victims,” an official at the law firm leading the litigation said.
Cho Yeon-haeng, president of Korea Finance Consumer Federation, a customer rights group, said: “Proving actual damages will be very difficult, which means at best nominal compensation for emotional injury.
“What is needed is stopping repercussions by re-issuing all the affected credit cards,” he added.
The stolen information included names, home addresses, and phone numbers, bank account numbers, credit card details, identification numbers, income, marriage and passport numbers.
The FSS said credit card passwords were not stolen, although this was cold comfort to South Koreans for whom most credit card transactions simply require a card swipe and signature – without the need for a chip and pin process. Some outlets such as home shopping channels do not even need a signature.
South Korean media reported that President Park and UN Secretary General Ban were among those whose information was stolen, although government officials and the card firms declined to comment. Park’s office declined to comment, while Ban’s office could not be reached to comment.
Executives from KB Kookmin Card, Kookmin Bank, NH Nonghyup Card, Lotte Card and Korea Credit Bureau, which hired the contractor, offered to resign as investigators probed how such a massive data theft could have occurred so easily.
Credit card spending amounted to 451 trillion won ($424.01 billion) in 2012, accounting for 66 percent of the country’s private consumption, according to data from the Credit Finance Association of Korea.
The Nilson Report, a California trade journal that tracks the payments industry, said in its August issue that global card fraud rose to a record $11.3 billion in 2012, from just under $10 billion the year before.
Nearly half the losses occurred in the United States, helped by the lack of the more advanced card readers. ($1 = 1063.6500 Korean won)
(Additional reporting by Hyunjoo Jin and Ju-min Park; Editing by Stephen Coates)
UrFU hosts fourth Teachers’ Congress(0)
Ural Federal University Vice Rector Sergei Knyazev met with members from the fourth Congress of Teachers during the university’s Test Drive event.
The Russian event has grown to have an international draw, bringing together teachers from Kazakhstan, Tajikistan and Mongolia to improve their professional competence.
Knyazev spoke at the event on the conditions of admissions to the university and also on the topic of budgets and employment prospects of graduates. Delegates at the event participated in preparatory courses on applications, the Russian language, physics, mathematics and biology.
Foreign colleagues can use the event in order to find for themselves the best prospective students, according to Knyazev. The rector also stated that he foresees the event growing to include applicants from Iraq, Iran, Vietnam and other countries.
Who could be ‘Taiwan’s Russia’?(0)
Two current democracies, Mongolia and Taiwan, opposites in size and population, have a strange, intertwined past. Mongolia is now the world’s 19th largest state in area, but ranks 140th in population. Diminutive Taiwan barely makes 137th by area, yet it ranks 51st in population. However, their polar fate runs deeper and involves a shifting relationship vis-a-vis the nebulous character of what is or can be defined as “one China.”
The current twist in this relationship started in 1911. At that time, the island of Taiwan was part of Japan, but on the Asian continent, a developing Republic of China (ROC) — one which would ironically later be forced to seek refuge in Taiwan — declared a rebellious independence from the Manchu Qing Empire.
As the Qing Empire broke apart, Mongolia followed suit and declared independence from China. Unfortunately, it soon found that the formative ROC claimed Mongolia as part of its territory. ROC forces invaded Mongolia. Russia, which would have its own revolution in 1917, stepped in and ironically became responsible for making Mongolia the independent nation it is today. Aided first by White Russians against the Chinese and then by Red Russians, Mongolia broke free and declared a second independence in 1921.
Another player, the Chinese Communist Party (CCP), founded in 1921, would soon enter and have a part in this developing scenario. The CCP became involved in an on-again, off-again civil war with the Chinese Nationalist Party (KMT) for control of China. They won that civil war and established the People’s Republic of China (PRC) in 1949. While the KMT’s ROC retreated to Taiwan, the PRC ruled China and, despite its 1921 origin, would still trace its roots to the 1911 uprising.
To complicate matters for Mongolia and Taiwan, a cliched canard of Han hegemony developed and has been used against each at different times by PRC and/or ROC proponents. That cliche would claim that Mongolia and Taiwan are “inalienable parts of China,” parts of the “motherland from time immemorial.”
If one would pursue this twisted form of logic, Mongolia might have the “greater claim” to be a “time immemorial part of China.” For after Genghis Khan unified the Mongols in 1206, he and his successors went on to conquer China and numerous other lands, creating an empire that stretched from the Korean Penninsula to the area now known as Budapest in Hungary.
When that empire was split into four Khanates, Kublai Khan eventually rose to take over the Khanate over eastern Asia. It included China, where it became known as the Yuan Dynasty. So was that Mongolia or China?
The Ming Dynasty (1368 to 1644) rose within that Mongol Khanate and chased the Mongols back to their steppes. Mongolia and Ming China then continued in separate existence and at war with each other. However, in 1644, the Manchus entered the picture. They conquered China, as well as Tibet, Xinjiang and Mongolia, and founded the Manchu Empire and its Qing Dynasty (1644 to 1911).
And what about Taiwan? This island, which had been appearing on the maps of many different nations for some time, had been a haven for fishermen, pirates and those who traded with its Aborigines. After a battle between the Dutch and Ming China over Penghu, Taiwan’s subsequent colonization began in 1624. It would suffer the Dutch, the Spanish and finally Zheng Chenggong’s (鄭成功) — better known as Koxinga (國姓爺) — Ming loyalists as they fled the Manchus.
When the Manchus followed and defeated them, they repatriated the Ming loyalists and as a preemptive matter, also brought the western half of Taiwan into their fold in 1682.
The western half of Taiwan would remain in that fold until the Treaty of Shimonoseki in 1895, when the Manchus gave it and the eastern part of the island, which they did not control, to Japan.
That brings this dual narrative back to 1911, when the ROC and Mongolia both declared independence from the Manchus. Over the decades, despite the ROC’s protest, Mongolia continued in its independence with Russian assistance. Using its 1947 constitution, the one-party-state KMT still claimed that Mongolia was a part of the ROC.
In 1955, that ROC, a founding member of the UN and a member of the UN Security Council, used its veto to block Mongolia’s membership in the UN. Russia was not done; it again forced a tradeoff for Mauritania’s membership in 1961 to allow Mongolia to also join the UN. The ROC later lost its seat in the UN and its place on the Security Council to the PRC in 1971.
The 1990s proved memorable for Mongolia and Taiwan as both became full-fledged voting democracies with more than one party. Mongolia would soon vote in a non-communist party and Taiwan by 2000 would elect a non-KMT president by popular vote.
There is one more important element in this story that most are not aware of. Back in 1945, when both the KMT and the CCP wanted Russia’s help in China’s fight against Japan, Moscow, for motivations of its own, required that they agree to allow Mongolia to conduct a referendum on whether it would be a part of China or an independent nation.
In that referendum, with almost 100 percent approval, Mongolia voted to be independent.
This poses an interesting question that Taiwanese still pressured by the “one China” canard might ask: “Who will be our Russia?”
In its actions, Russia was not altruistic. It long understood the hegemony proposed by Han chauvinists in China; it wanted a buffer state. Tibet lacked such help to protect it in the “one China from time immemorial” game.
Today, Taiwan’s president still seems drawn to the dream of “one China” and the old KMT/ROC days. He still quotes the outdated 1947 constitution as if times had not changed. He appears more like a quisling than a president of the new democratic Taiwan. However, Taiwan is a mid-sized state, with a population of 23 million and an economy in the top 20 of the world.
While it remains threatened by the PRC, it can wonder: Does it need a Russia? If so, could that role be filled by Japan or the US? And what about a referendum?
Jerome Keating is a commentator in Taipei.
East Asia Needs United Approach to Climate Change(0)
The need to respond effectively to climate change is one of the greatest challenges of our time, particularly more so in the aftermath of Typhoon Haiyan. While no one typhoon can be directly linked to climate change, rising global temperatures and warming oceans provide the conditions that fuel these kinds of monster storms.
A recent analysis of the economics of climate change in the East Asian countries of People’s Republic of China, Republic of Korea, Japan and Mongolia delivers two clear messages. The first is that despite high outlays associated with climate mitigation and adaptation measures, the costs of doing nothing under a business-as-usual scenario are now even greater. The second is that cooperation amongst countries working in unison delivers far larger benefits than standalone responses. The study also concludes that the best strategy for tackling climate change should include a mix of adaptation and mitigation measures.
East Asia is critically important in the global push to mitigate the rise of carbon emissions At the Copenhagen and Cancun climate conferences, countries in the region made various commitments to reduce emissions by 2030 and beyond. For Japan and South Korea these commitments imply emission reductions of 70 percent-80 percent by 2030 relative to the business-as-usual baseline for 2030.
The study shows that the total cost of achieving these reductions in 2030 may be as high as 4 percent of GDP for Japan and 8 percent for South Korea. In other words, these targets would require an extremely high carbon price in excess of $800 per ton of CO2.
In contrast, the PRC’s goal involves a 58 percent cut in emissions in 2030 relative to the “do nothing” scenario. This implies a carbon price of about $80 per ton of CO2. One reason why the cost of reducing emissions in the PRC is potentially 10 times lower is that there are opportunities to adopt policies and technologies which are economically efficient and reduce emissions from now till 2030. In such cases the marginal cost of lowering CO2 emissions is in fact negative, or zero.
With these numbers in mind, the question is how can the East Asian economies work together to gain maximum benefit from reducing carbon emissions? Establishing a carbon trading arrangement is one obvious way. If the countries were to form a regional emissions pool and trading scheme, the study estimates that the carbon price for the emissions pool in 2030 would be about $100 per ton of CO2 to achieve the same aggregate reduction in emissions in these countries. In effect, Japan and South Korea would share the costs incurred in the PRC to reduce emissions by more than its target, thereby avoiding the much higher cost of reducing domestic emissions by their solo efforts.
The total savings from operating such a regional trading pool is estimated at about $330 billion per year in 2030, or 1.4 percent of the projected total GDP of the countries in East Asia. The benefits would be particularly large in 2030 because of a sharp reduction in emissions between 2020 and 2030, implied by the targets. The estimated savings from regional trading are at least equivalent to 0.4 percent of total estimated GDP from 2020 to 2050.
The benefits of working together can also be enhanced if countries promote joint programs to develop shared technologies and mechanisms for both adaptation and mitigation. The estimates of the costs of reducing emissions are based upon existing and foreseeable technologies, particularly in the energy, transport and industrial sectors.
Looking beyond 2020, it will be essential to develop less costly methods of carbon capture and storage, especially for use with gas, as well as for coal power plants. Similarly, the development of low carbon technologies for transport and industrial production will be critical to achieve emission targets for 2030 and 2050.
The development and rollout of regional cooperation initiatives is hard work and often painfully slow, and poses significant challenges like how to promote the sharing of technologies while still respecting the interests of the intellectual property owners. There are models of cooperation which developed in Europe and the USA that may be a useful starting point
The EU Emissions Trading Scheme has been successful in leveraging investment in low carbon technologies, technology transfer and contributing to the flow of climate finance; as well as building climate policies and market based mechanisms to estimate, monitor, verify and monetize emission reductions. East Asian countries could draw lessons from the ETS and develop a regional scheme that would facilitate efforts to channel resources and address climate-related priorities in the region. At the same time, additional measures like flexible ‘caps’ or safety valves for allocation/auctions, use of a sectoral approach and appropriate setting of initial targets need to be considered.
But ultimately, East Asia will need to find their own ways of working together, while still competing in international markets. There is clear evidence now to show that the economic gains from working in unison are so large that this effort is clearly worthwhile.
Stephen P. Groff is the Asian Development Bank‘s Vice-President for East Asia, Southeast Asia and the Pacific. This article was co-authored by Gordon Hughes – a professor at the University of Edinburgh — and first appeared in The Korea Herald.
Tumen development body likely to be upgraded into int’l organization(0)
SEJONG, Oct. 30 (Yonhap) — South Korea, China, Russia and Mongolia are likely to upgrade the status of a regional association for the development of areas near the Tumen River, the finance ministry said Wednesday.
Officials from the four countries recently held their 14th meeting on the Greater Tumen Initiative (GTI) in Ulaanbaatar, Mongolia where they have discussed whether to transform the regional cooperation body into an international organization.
The GTI is a regional cooperation body for development near the river border between China and North Korea. It is also an initiative supported by the United Nations Development Program.
At the meeting, the participants also reviewed cooperative projects in such fields as transportation, trade, tourism and energy.
The next meeting of the GTI is to be held in China, it added.
With a keen eye, Japan watches closer ties between N. Korea and Mongolia(0)
Japan wondering if Mongolia will act as a bridge on abductees between antagonistic Tokyo and Pyongyang
By Gil Yun-hyung, Tokyo correspondent
The Japanese press has been watching the increasingly close ties between North Korea and Mongolia with interest lately.
The main reason is the long shadow Mongolia is casting on one of the biggest issues between Pyongyang and Tokyo, that of Japanese citizens abducted to North Korea. Mongolia has also been implicated in another major North Korea issue – the auction of the headquarters for the pro-North Korea General Association of Korean Residents in Japan (known locally as “Chongryon”).
On Oct. 29, some Japanese news outlets, quoting North Korea’s state-run Korean Central News Agency, reported that Mongolian President Tsakhiagiin Elberdorj had visited North Korea and met with Kim Yong-nam, chairman of the presidium for North Korea’s Supreme People’s Assembly the previous day.
The Asahi Shimbun newspaper speculated that a summit may have taken place with North Korean leader Kim Jong-un, noting that Elbegdorj’s visit was the first by a foreign head of state since Kim took over as leader in April 2012.
The reason for the attention from Japan’s press is the hope that Elbegdorj’s visit may bring progress on the Japanese abductee issue. Japanese Prime Minister Shinzo Abe visited Mongolia back in March, and a visit by Elbegdorj to Japan followed in September. Abe has reportedly been asking Mongolia for help on resolving the abductee issue as part of its concerted push to build bilateral ties.
The Sankei Shimbun newspaper quoted an overseas diplomatic source as saying that Mongolia has long been “proactive” about playing the bridge between Tokyo and Pyongyang, adding that Elbegdorj is likely to bring up the abductee issue at his meeting with Kim Yong-nam.
Meanwhile, some are suggesting Mongolia may have served as the go-between in a possible understanding between North Korea and Japan on the auction of the Chongryon headquarters, which are currently up for auction.
The biggest bidder in the auction has been a Mongolian company, Avar Limited Liability. Japanese media reported that the firm, which was created in January, exists only on paper, with an unrelated residential address given on its registration.
Some news outlets in Japan are suggesting North Korean involvement, noting that the chairman of the company’s board is a relative of Mongolian sumo champion Asashoryu Akinori, who competed in Japan and has visited North Korea in the past.
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What Do North Korea And Mongolia Have In Common?(0)
The relationship between North Korea and Mongolia does not usually make headlines, but Mongolian President Tsakhia Elbegdorj’s visit to the reclusive state this visit this week has brought this oft-overlooked East Asian bilateral relationship to the forefront. The visit also marks the very first meeting between a foreign head of state and Kim Jong-Un since his rise to power in 2011.
Elbegdorj’s objectives during the visit are slightly unusual. The Wall Street Journal reports that the president “will present his country’s history as an example of how to achieve sovereignty and economic development without relying on the use of force.” According to the Mongolian Foreign Ministry, Elbegdorj has considered the possibility of acting as a neutral mediator between the North and the outside world. Nevertheless, his visit demonstrates a closeness to North Korea that could be an asset for Mongolia’s relations with other states.
According to certain experts, Mongolia presents a compelling economic model for North Korea. It thrust itself out of communism and integrated into the global economy via an economic boom propelled largely by mining its wealth of natural resources, including rare-earth metals. North Korea is similarly endowed and could emulate the Mongolian example. According to The Wall Street Journal, “Mongolia’s fledgling resource industry is by far its largest driver of growth, accounting for 85% of investments into Mongolia and 40% of state revenue. Foreign direct investment in this sector propelled Mongolia in 2011 to become the world’s fastest-growing economy, according to World Bank data.”
Although Mongolia has been fairly transparent in its reasons for engaging North Korea, there is considerable disagreement among experts on what the true long-term objective is for the opaque Kim regime. One expert, Andrei Lankov, has suggested that the economic model incentive is “completely unattractive” to the North given that in the Mongolian case it necessitated a democratic revolution and the end of the communist regime. Elbegdorj himself was a visible leader in the pro-democracy movement in the 1990s.
The agenda for this visit will include the issue of North Korean laborers in Mongolia. A previous bilateral agreement allows 5,000 North Korean workers to live and work in Mongolia on a temporary basis. On strategic issues, the two sides may come together to discuss what Charles Armstrong an expert of politics on the Korean peninsula, has termed “a common concern about domination by larger countries, namely Russia and China, and retaining political independence.”
Mongolia fell into the DPRK’s good graces early on when it became the second country to recognize its sovereignty, after only the Soviet Union. It offered the North material support in the form of livestock during the Korean War. Kim Il-Sung visited Mongolia in 1956 to express his appreciation for Mongolia’s wartime support. He visited again in 1988. The two states signed a friendship and cooperation treaty in 1986.
After the fall of the Soviet Union, Mongolia transitioned into a market economy while North Korea continued to persist as a reclusive communist state. Mongolia’s transition did not estrange it from the North, but the two encountered a decade of slightly strained relations. During Mongolia’s transition to a market economy, it swung strategically towards South Korea; in the 1990s, its trade with the South rose as its trade with the North dropped significantly.
In 2002, North Korean Foreign Minister Park Nam-Sun made the first high-level visit to Mongolia in 14 years. Kim Yong-Nam, Chairman of the Presidium of the Supreme People’s Assembly in North Korea, made another visit in 2007. Kim was also the one to receive Mongolian President Elbegdorj upon his arrival to North Korea this week.
Ankit Panda is Associate Editor of The Diplomat. You can follow him on Twitter @nktpnd.
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