Thursday, September 4, 2014

Russia's Putin follows China's Xi to Mongolia

Ulan Bator: Russian President Vladimir Putin oversaw the signing of a series of agreements with Mongolia on a whistle-stop visit Wednesday, just two weeks after a trip by Xi Jinping from its other giant neighbour China.

Putin is currently embroiled in the crisis in Ukraine, which has strained his relations with the West to breaking point, and is on the lookout for new markets in the face of threatened sanctions by the EU and US. He and his Mongolian counterpart Tsakhia Elbegdorj watched as officials signed 15 accords covering sectors including transport and infrastructure, mining, education, and communications, although few details were provided.

The two leaders were expected to lay wreaths at a statue of Soviet Marshal Georgy Zhukov to mark the 75th anniversary of a Soviet-Mongolian victory against Japanese forces at the battle of Khalkhyn Gol, also known as Nomonhan, at the beginning of World War II.

"Together we will always remember the young warriors who demonstrated their valour and courage in wartime," said Elbegdorj, calling Putin's visit "a new page in the history of the cooperation between our two countries". The Russian leader said "critical steps" had been taken to further their relationship.

During the Soviet era, Ulan Bator was a satellite of Moscow's, but Mongolia threw off the Communist yoke in 1990 and has emerged as a vibrant parliamentary democracy. But its own economic growth is flagging after the world-beating performances of recent years, and it now suffers from rising inflation, a plunging currency and a 70 percent drop in foreign direct investment in the first half of this year.

Both countries are rich in resources - while Mongolia has huge coal and copper deposits, Russia provides most of its fuel and electricity supplies - and Putin has periodically moved to reaffirm Russia's interests in Asia and the Pacific.

But China is by far Mongolia's biggest economic partner. Two-way trade between Mongolia and Russia was worth more than US$1.6 billion in 2013, reports said, but with China it was four times higher, accounting for more than half Mongolia's commerce. When Chinese President Xi visited, the two countries set out plans almost to double trade to US$10 billion by 2020, Beijing's official news agency Xinhua reported.

Despite their shared Communist past, Russia "has long lost the game of influence over Mongolia", said Sergey Radchenko, an international politics specialist at Aberystwyth University. "Moscow forgave Mongolia's (Soviet era) debt and has tried to regain lost ground by inserting itself into various (mining and infrastructure) projects," he told AFP. "Yet these are hardly sufficient to provide Russia with the sort of leverage in the country that Putin might have expected a few years back."

"It just does not have the leverage, and what little it has is set to diminish in coming years as China's economic pull continues to bear weight on Mongolia."

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