Interfax's Interview

“The subjects for the negotiations, especially the economic ones, are very broad. I think in that respect a breakthrough in our relations should occur,” Enkhbayar said in an interview with Interfax in the runup to the visit to Moscow.

“Mongolian-Russian relations are very important to my country. We hope that our relations are as significant for Russia as well. We are neighbors forever. Neighbors should always live in peace and accord and work together,” Enkhbayar said.

Mongolia is facing great opportunities in light of Russia’s rapid economic development, Enkhbayar said. “We should attach particular significance to developing economic ties, particularly investments in the Mongolian economy, constructing new major facilities, reducing customs tariffs, and cutting the cost of cargo transportation from Mongolia to Russia and Europe,” he said.

“We expect to reach a level of $1 billion in our yearly trade soon,” he said.

Enkhbayar also said he plans to discuss their common interest in developing mineral resources, construction of infrastructure, and cooperation in developing the agricultural sector.

Asked to comment on prospects of military-technological cooperation with Russia, Enkhbayar pointed out that it used to be “an important component” of bilateral relations, but “because of different circumstances, both objective and subjective ones,” this type of cooperation “has somewhat declined in the past 15 years.”

“These ties have been intensified in the past several years. We are glad that Russia is helping Mongolian servicemen receive training in Russia and providing technological support and assistance in the form of various types of weapons. There are agreements and new documents between the two defense ministries and general staffs, which give us every reason to say that our military-technological cooperation is on the rise. We intend to further discuss this subject with Russia and work in this direction,” he said.
 Enkhbayar also called on the Russian business community to work together to identify mutually beneficial sectors of investment in the Mongolian economy.

“We should articulate our interests to each other honestly and openly. We know that major Russian companies, both private and state-owned ones, are seeking to invest in mineral fields. They have come up with various ideas so that the Mongolian interests be taken into account as well. So we will work together and exchange ideas and opinions, and this should result in achieving a balance between both the Mongolian and Russian interests,” Enkhbayar said.

“Modern cooperation, especially economic, presumes that all players benefit from it,” he said.

Asked what Mongolia is going to do to draw Russian investment in its economy, Enkhbayar noted that “general conditions for investment in the Mongolian economy are stipulated by the Law on Foreign Investment. It offers quite good terms. But on the other hand, surely, this requires knowledge of the language, appropriate infrastructure, and personal empathy – in other words, things that are hard to reflect in a law. I believe that, in this respect, Russia, as a neighbor and traditional partner, has certain advantages over other foreign investors,” he said.

Russian businesses “want to invest in major Mongolian mineral fields, the energy sector, the construction of motor roads and railways, housing, and an oil refinery. All these sectors are very promising. We will talk about this with President Vladimir Putin. There are also good opportunities for investment in the livestock industry, for instance, in vaccinations and in providing conditions for Mongolian meat and meat products to enter the Russian market. It would be possible later to enter the Chinese and then other Asian markets,” Enkhbayar said.

He also said his country is willing to develop broad international cooperation with China and the U.S.

“The entire world is working with China, and we see how successfully China is developing. In this respect, the development of the Chinese economy and the development of the Russian economy help our economy overcome difficulties and achieve new goals,” he said.

“Economic cooperation between Mongolia and China is in some sense more active in terms of its volume and figures than Mongolian-Russian partnership,” which is prompted by “such factors as the rapidly expanding Chinese economy and liberal visa regulations,” Enkhbayar said.

“About 450,000-500,000 Mongolians visit China annually. This is several times more than the number of Mongolian citizens visiting Russia. A great amount of Mongolian transit cargo goes through China to other countries, and Chinese investors are working in Mongolia very actively. They are not only interested in large-scale projects but also do not avoid small private businesses, as, for instance, hotels, restaurants, and small gold and iron processing companies. Medium-sized Chinese businesses are very actively entering Mongolia,” he said.

Asked how significant are relations with the U.S. for Mongolia, including those in the military area, Enkhbayar recalled that the U.S. president for the first time visited Ulan Bator in the fall of 2005. “America, as a superpower and as a country wielding certain influence in the world, treats Mongolia as a good example of democratic development, an example of openness and a sort of model for a democratic neighbor,” Enkhbayar said.

“There are good opportunities and great potential for developing truly warm relations and partnership. It is hard to deny today that we all depend on one another,” he said.

The full version of the interview will be available on http://www.interfax.ru/ and in the December 4 issue of Kommersant.

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