Historical Retrospect on Mongolia-Japan Relations and Comprehensive Partnership 33
ŏBrief Analysis of Important Issuesŏ
Historical Retrospect on Mongolia-Japan Relations and
Comprehensive Partnership
Nalin
﹝Research Fellow The Insitute
of Mongolian Studies Inner
Mongolia University﹞
Abstract
Japan’s repeated attempts to encroach on Mongolia over the
course of history were upset time and again by heavyweight
intervention on the part of Russia. Formal diplomatic relation
between Mongolia and Japan were established in 1972. Since
early 1990s, a time that marked the beginning of Mongolia’s
transformation to democratic system, there have been frequent
mutual visits between the leaders of Mongolia and Japan. The
relation has been fueled by Japan’s active support of Mongolia’s
bid for democratization and market economy reform, and has
entered the new stage of comprehensive partnership. Using
economic assistance as a bait to permeate Mongolia, Japan is
seeking to dominate Mongolia’s resource market and at the same
time expand its political and economic influence to secure a tighter
grip on wheel of Asia.
Key Words: Mongolia, Japan, Historical Retrospect,
Comprehensive Partnership
34 Bimonthly Journal on Mongolian and Tibetan Current Situation Vol.15, No.3
1. Mongolia-Japan Relationship: a Historical Retrospect
Japan has been eyeing Mongolia for a long time. As early as 1904 and
1905, Japan pocketed Liáodōng Peninsula after defeating Russia on the
battlefield, and included the northern part of Northeast China and eastern
Mongolia as part of its territory. Before World War One, Kodama Gentarō, a
Japanese official, spent some time in Mongolia in 1913 trying to sever the
bond between Inner and Outer Mongolia and China, only to see his work
undone by the Russian Empire. In July 1927, Japanese Prime Minister Tanaka
Giichi presented The Empire of Japan’s Basic Active Policies on Manchuria
and Mongolia to the Japanese Emperor, which says, “To conquer China, we
must conquer Manchuria and Mongolia first. To conquer the world, we must
conquer China first, 1 ” hence the beginning of Japan’s outrageous policy of
using Manchuria and Mongolia as its base for aggression. Finally in 1939,
Japanese troops invaded Mongolia, setting off the Battle of Nuomenhan (also
known as the Battle of Halaha). It was a blatant declaration of Japan’s
long-term ambition of pocketing China and Mongolia and even the Soviet
Union. In May 1939, Japan’s Kwantung Army took the lead to invade
Mongolia and took over the Halaha district in the east as the springboard to its
next stop of Soviet Union to fulfill its plan to “advance north.” After learning
the intent of the Japanese, Joseph Stalin decided to go all out in teaching
Japan a lesson to fend it off forever. The Mongolia-Soviet joint force under
the direct command of General Georgy Konstantinovich Zhukov staged a
1
Dai Wen-wu, “Japan’s 300-Year Conspiracy against China,” Global Times, September 19, 2005.
Historical Retrospect on Mongolia-Japan Relations and Comprehensive Partnership 35
counterattack at the Japanese on August 20, 1939, and spent only ten days to
defeat the Japanese imperial army. The crushing defeat made the Japanese
realize that they were simply no match for the powerful Soviet army.
Therefore, Japan declined Germany’s request for assistance in the latter’s
invasion in Moscow in November 1941. The relatively unknown battle
between Mongolia, Soviet Union, and Japan ended up having a profound
impact on World War Two, and indirectly supported China in its battle against
the Japanese as it took away a part of Japan’s military clout.
The Soviet Union declared war on Japan on August 8, 1945. Two days
later, Mongolia followed suit and entered a war with Japan. Mongolia sent a
mechanical cavalry (consisting of three battalions under the 22nd Cavalry
Regiment and one scouting unit) 2 as a counter force against Japan. At this
point, the Soviet-Mongolia joint force had entered northeastern China and
Inner Mongolia and crushed the Japan’s Kwantung Army with the help of the
Chinese people. The feat directly caused the Japanese imperialism to hand in
an unconditional surrender and made a substantial contribution to the ultimate
victory in the global anti-Fascist campaign.
Interactions between Mongolia and Japan began since 1956. In October
1957, Mongolia issued a joint statement on the promotion of Mongolia-Japan
trade in Beijing along with the Association for the Promotion of Japan-China
Trade. In August 1959, the Bureau of Import and Export under Mongolia’s
Ministry of Foreign Trade signed an agreement on mutual freight shipment in
2
Huo Wen, “China-Mongolia Friendship in the Time of War,” People’s Daily, September 2, 2005.
36 Bimonthly Journal on Mongolian and Tibetan Current Situation Vol.15, No.3
1960 with Japan’s Association for the Promotion of International Trade.
Mongolia and Japan agreed to exchange travelers in May 1963. Then in
October 1968, the Mongolia-Japan Association was created, and in March of
the same year both countries put pen to a three-year trade agreement. In
August 1970, Gombojavyn Ochirbat, Deputy Chairperson of Mongolian
Ministerial Meeting, had a meeting with Japanese Foreign Minister Kiichi
Aichi in Tokyo and signed an agreement on the development of economic and
cultural ties.
On February 11, 1972, the Chair of Mongolian State Great Hural
declared the end of the state of war between Mongolia and Japan. On
February 19, Mongolia dropped the request for reparation and built
diplomatic ties with Japan. In September 1972, Japan set up the
Japan-Mongolia Economic Council. In April 1974, Japan granted Mongolia
the most-favored-nation treatment at the latter’s request. Later in September,
the two sides exchanged a memorandum on cultural and science exchange.
Following a five-year negotiation, Mongolia finally gave up asking
Japan to build 15 industrial projects. The two sides signed an economic
cooperation agreement in March 1977, the first one Mongolia has ever signed
with a capitalist country. Japan agreed to provide Mongolia up to USD 17
million in non-reimbursable assistance and build a cashmere and alpaca
factory (later known as “Gobi Cashmere”) in the Mongolian capital city of
Ulan Bator. The factory, which began operation in 1981, now processes over
1000 tons of cashmere and over 200 tons of alpaca per year, and produces
Historical Retrospect on Mongolia-Japan Relations and Comprehensive Partnership 37
300,000 cashmere products 45,000 alpaca blankets. Over 90% of its products
are exported to around 10 countries including Japan and Russia.
Unsurprisingly, bilateral trade between Mongolia and Japan surged from USD
1.25 million in 1970 to USD 9.40 million in 1985 and then skyrocketed to
USD 31.40 million in 1989. Before the 1980s, economic and trade activities
between the two were small-scaled because Mongolia back then was
completely dependent on the Soviet Union and thoroughly marginalized in the
dogfight over interests between big powers, hence the lack of substantive
progress in the bilateral relationship back then. However, since the 1990s,
world politics has changed and Mongolia has experienced transition on the
domestic and diplomatic front, so Mongolia and Japan began to have wider
and deeper exchanges and cooperation in the areas of politics, economy,
culture, and education.
2. Frequent Mutual Visits between Mongolian and Japanese Top Executives
Since its democratic reform, Mongolia has seen swift development in its
relationship with Japan. In May 1989, Japanese Foreign Minister Sosuke Uno
paid a visit to Mongolia at the latter’s invitation. It was the first time a
Japanese FM landed on the Mongolian soil since the two countries established
diplomatic ties in 1972, and also a return to the Mongolian FM’s visit to Japan
in 1987. Since then, there have been frequent mutual visits between
government executives in Mongolia and Japan. Two presidents, three
parliament speakers, and five prime ministers (including a chairperson of
38 Bimonthly Journal on Mongolian and Tibetan Current Situation Vol.15, No.3
ministerial meeting who visited Japan in 1990) of Mongolia paid visits to
Japan between 1990 and 2004. Japan also had two prime ministers and other
top executives paying visits to Mongolia during the period.
In February 1990, Mongolian Ministerial Meeting Chairperson Sodnam
paid a visit to Japan at the government’s invitation. It was the first time in
Mongolia’s history that a top executive paid a formal visit to the West. During
the visit, the two sides agreed on mutual most-favored-nation treatment.
In November 1990, P. Ochirbat, the first President of the Mongolian
People’s Republic, and the first lady attended the coronation ceremony of
Japanese Emperor Akihito in Japan.
In August 1991, Japanese Prime Minister Toshiki Kaifu paid a visit to
Mongolia at the latter’s invitation. He is the first top government executive
from Japan as well as the West to visit Mongolia. The joint press communiqué
between Mongolia and Japan described the visit as “an event with a profound
meaning in the history of the bilateral relationship” and declared a shared
resolution to develop a relationship of the 21st century. Toshiki Kaifu
reiterated Japan’s unwavering support for Mongolia’s democratic reform and
the development of bilateral cooperative relationship under the new historical
backdrop. Japan also pledged to provide Mongolia with non-reimbursable aid
of up to JPY 3 billion (around USD 21 million).
In May 1992, Mongolian (its official designation had been switched from
Mongolian People’s Republic to simply Mongolia in January) Prime Minister
Dashiyn Byambasüren paid a work visit to Japan. While there, he attended the
Historical Retrospect on Mongolia-Japan Relations and Comprehensive Partnership 39
second International Assistance Group Meeting for Mongolia organized by
the host country and had a meeting with Japanese Prime Minister Kiichi
Miyazawa. Japan pledged to provide Mongolia assistance of up to USD 18
million, including USD 15.30 million in cash from the international assistance
fund, USD 1.53 million worth of wheat to be purchased from China, and USD
1.15 million worth of chemical fertilizer and farming facilities. In the group
meeting, Japanese FM Michio Watanabe urged other countries to give
Mongolia as much assistance as possible, saying that this was exactly what
Japan was planning to do.
In November 1993, Mongolian Prime Minister Puntsagiyn Jasray paid a
visit to Japan. The two sides signed an aviation relationship agreement, and
Japan also agreed to grant cultural assistance and loans to Mongolia.
In October 1994, Mongolian State Great Hural Chairperson Natsagiyn
Bagabandi paid a visit to Japan. In a meeting, Japanese Prime Minister
Murayama Tomiichi told Bagabandi, “We shall further develop the bilateral
relationship and extend the scope of cooperation in the future. This will have
a positive impact on not just the bilateral cooperation, but regional
cooperation as well.” Bagabandi replied, “It has been one of the top priorities
in our foreign policies to cultivate a friendly relationship and cooperation with
Japan.” “Mongolia has always regarded Japan as a major partner in Asia.”
The meeting was perceived by both sides as a meaningful event in the
cooperation of the highest legislative bodies.
In February 1995, Mongolian Defense Minister led a military delegation
40 Bimonthly Journal on Mongolian and Tibetan Current Situation Vol.15, No.3
to call on Japan. It was the first time a top Mongolian military delegation
visited Japan and met with the top executives of Japan’s Ministry of Defense.
The two sides agreed to enhance cooperation in a wide scope.
In February 1997, Mongolian Prime Minister Mendsayhany Enkhsaikhan
called on Japan to mark the 25th anniversary of Mongolia’s diplomatic tie with
Japan. According to the joint statement, Enkhsaikhan explored with Japanese
Prime Minister Ryutaro Hashimoto the possibility of giving Mongolia budget
assistance and low-interest loans to improve coal mining facilities, and piling
up Japan’s direct investment in Mongolia. The ideas were well received by
Japan.
In May 1998, Mongolian President H. Bagabandi (previously Parliament
Speaker) paid a state visit to Japan. The two sides signed a joint communiqué
of "comprehensive partnership toward the 21st century." This marks the
beginning of Mongolia’s long-term, stable, comprehensive partnership with
Japan, which is one of the major achievements of this visit. The nature of this
comprehensive partnership contains four aspects: mutual understanding and
mutual respect in a long-term relationship; a reciprocal economic and trade
partnership that conforms to the standards of international relationships, a
relationship stretching across the boundaries of culture and education, science
and technology, and humanitarian assistance; cooperation toward resolving
world and regional issues. Mongolia spoke highly of the joint communiqué,
convinced that President Bagabandi’s visit to Japan had raised the cooperative
relationship to the new level of strategic cooperation.
Historical Retrospect on Mongolia-Japan Relations and Comprehensive Partnership 41
In March 1999, Mongolian State Great Hural Chairperson led a
parliamentary delegation to call on Japan.
In July 1999, Japanese Prime Minister Keizo Obuchi embarked on a
one-day official visit to Mongolia. This was the second time a Japanese Prime
Minister set foot on Mongolian soil. While there, Keizo Obuchi reiterated the
comprehensive partnership between Mongolia and Japan, and gave written
permission to Mongolia’s plan of using the funds provided by Japan in 1999
to purchase facilities for the Mongolian National Center for Intangible
Cultural Heritage. He also signed other important documents including the
“KAIR2” documents to enhance food production and food processing quality
in Mongolia and the agreement to build a Japanese cultural center in the
Mongolian capital of Ulan Bator. Mongolia thought highly of Keizo Obuchi’s
visit, dubbing it an important one that built a brand-new foundation for future
cooperation.
In February 2001, Mongolian Prime Minister Nambaryn Enkhbayar
arrived at Japan for a week-long official visit. It was his first official visit
abroad since being elected as Prime Minister. While there, he expressed the
new government’s resolution to base its Japan policies on the principles of
having a long-term, stable, and comprehensive partnership. The Japanese
once again pledged to support Mongolia as usual, and promised never to cut
economic assistance to Mongolia.
Mongolian State Great Hural Chairperson made an official visit to Japan
from February 17 to 24, 2002 to celebrate the 30th anniversary of
42 Bimonthly Journal on Mongolian and Tibetan Current Situation Vol.15, No.3
Mongolia-Japan diplomatic tie. The Mongolia parliamentary delegation was
received by the Emperor, Empress, and Crown Prince of Japan, the leaders of
Japan’s House of Councilors and the House of Representatives, Prime
Minister Junichiro Koizumi, and the Minister of Education, Culture, Sports,
Science and Technology Atsuko Toyama.
Mongolian Prime Minister Nambaryn Enkhbayar stayed in Japan from
November 19 to 21, 2003 for the 10th International Assistance Group Meeting
for Mongolia. Representatives of 23 countries and 7 international
organizations agreed to provide Mongolia with loan and assistance of up to
USD 335 million. The representatives complimented Mongolia on its
achievements in recent years in terms of maintaining macroeconomic stability,
reducing poverty, and facilitating economic development, and urged
Mongolia government to take more effective measures to work more closely
with donor countries and international organizations and make good use of
loan and aid projects of international organizations to build a solid foundation
for economic development. In response, Mongolia pledged to speed up
privatization process, make good use of the loans and aid supplied by
international society, and give priority to the development of mining industry,
animal product processing, initial processing of industrial products, tourism,
and information industry. Mongolia also spoke of the plan to invest heavily in
education and health and take steps to reduce poverty.
Cooperation between foreign affairs departments in Mongolia and Japan
has stepped up in recent years. In August 2004, Japanese FM Yoriko
Historical Retrospect on Mongolia-Japan Relations and Comprehensive Partnership 43
Kawaguchi paid a visit to Mongolia and, besides meeting the President and
Prime Minister, also had a meeting with Mongolian FM L. Erdenechuluun.
This time, Mongolia handed information about the situation of the 10,100
Japanese citizens held captive in Mongolia following World War Two. In
return, Japan gave the Institute of Paleontology under the Mongolian
Academy of Sciences and Mongolian morin khuur heritage promotion and
preservation campaign USD 400,000 and USD 150,000 respectively. In
March 2005, Mongolian FM Munh-Orgil Tsend called on Japan. While there,
he met with Japanese Prime Minister Junichiro Koizumi and spoke with
Japanese FM Machimura Nobutaka. The Japanese pledged to continue their
support for Mongolia’s political and economic reform. Japan had finalized a
five-year assistance plan for Mongolia, and this time it pledged to offer
non-reimbursable aid of up to JPY 200 million to improve Mongolia’s food
industries.
Foreign officials from Mongolia and Japan met for a routine policy
negotiation in Ulan Bator on July 14, 2005. The meeting had been held six
times since 1996. In the meeting, the two sides summed up the bilateral
relationship since 2003 and exchanged views regarding the directions and
other details of the bilateral relationship between 2006 and 2006, regional
issues, and multilateral cooperation. Mongolian President, Prime Minister,
and Foreign Minister received the Japanese delegation headed by Foreign
Minister Makiko Tanaka. Japan pledged to continue its support for
Mongolia’s political and economic reforms and social development, and
44 Bimonthly Journal on Mongolian and Tibetan Current Situation Vol.15, No.3
explained the development aid projects it had planned for Mongolia. The two
sides agreed to maintain interactions between top government executives,
speed up the development of economic and trade relationships and
investments, and expand cultural and civilian exchanges. Japan also made
clear its stance toward United Nations reform and its aspiration of becoming a
permanent member of the United Nations Security Council (UNSC), and
thanked Mongolia for its long-term support for Japan’s bid to join the UNSC. 3
Japan voiced its support for Mongolia to join the multilateral cooperation in
Asia Pacific. As Japan finds itself becoming more like a marginalized player
in Asia, it is aware of the importance of wining Mongolia over and keeping it
as an important ally in the bid to join the UNSC. Japan’s longstanding policy
of generous aid for countries in Asia and Africa (totaling USD 221 billion by
the end of 2003 4 ) did not really earn the support it needed for the UNSC issue.
Mongolia’s acquiescence could be of immeasurable value while Japan is
struggling to keep the UNSC bid alive. In short, Japan’s dollar diplomacy
toward Mongolia has paid off.
The mutual visits between top government executives and the written
agreements all provide political basis and legal protection for the stable
development of Mongolia-Japan relationship, and also serve as active
catalysts for the establishment and development of comprehensive partnership
between the two.
3
Alet, “Mongolia and Japan Held Diplomatic Meetings,” www.olloo.mn/2005-07-15.
4
Zhang Li-xia, “Japan to Give up UNSC Bid,” Global Times, August 22, 2005, p.2.
Historical Retrospect on Mongolia-Japan Relations and Comprehensive Partnership 45
3. Japan’s Economic Aid for Mongolia
Japan provided various forms of economic aid to help Mongolia live
through economic hardship during the transition to democracy. Japan’s
economic aid for Mongolia totaled JPY 128.28 billion (around USD 1.2
billion) between 1991 and 2004, accounting for 70% of Mongolia’s foreign
loans and aids. 5 Japan provides Mongolia with around USD 45-50 million in
favorable loan, USD 30-35 million in non-reimbursable aid, and over USD 10
million in science and technology cooperation and aid per year. Japan also
mobilizes international organizations and donor countries to provide
economic aid to Mongolia on a regular basis. Between 1991 and 2003, Japan
and international organizations including World Bank called the International
Assistance Group Meeting for Mongolia ten times to provide Mongolia
favorable loans and non-reimbursable aid of up to USD 3.6 billion. Of all the
countries and organizations, Japan was the largest donor country for Mongolia,
having promised the largest sum of aid and, as a matter of fact, over 40% of
the aid received by Mongolia came from Japan.
The focus of Japan’s aid to Mongolia gradually changed from medicine,
food, and infrastructure renovation in the early days to mainstream economic
and livelihood items. Japan gave away JPY 4.5 billion worth of medical
equipment, medicine, and food between 1990 and 1991, and has been giving
USD 25 million worth of food to Mongolia every year since 1991. Japan also
approved the KP-1 Program offering wheat to Mongolia to improve food
5
Adiysurong, “Japan as Mongolia’s Top Aid Provider,” The Mongol Messenger, February 22, 2005.
46 Bimonthly Journal on Mongolian and Tibetan Current Situation Vol.15, No.3
safety, and has provided Mongolia with over JPY 900 million worth of wheat
on 11 occasions based on the program. Japan also provided Mongolia with the
following: 60 large-sized sedans to be used in public transportation in Ulan
Bator, USD 16 million in cash to improve the highways in the Mongolian
capital, JPY 1.399 billion in cash to revive railway facilities in Mongolia, JPY
7.7 billion worth of technologies and facilities for Xiwo Aobao coal mine, one
of the larger coal mines in Mongolia, and high-efficiency diesel power plants
and farming machines for 144 counties (out of a total of 340) in Mongolia to
supply power to pastoral areas unconnected to central power supply and help
the herdsmen digging wells. Japan also provided Mongolia with loans to built
the country’s first ever ironworks (known as Darhan Ironworks), ushering in a
new era of steel production in Mongolia. With help from Japan, Mongolia
rebuilt the Ulan Bator Fourth Thermal Power Plant, its largest power plant,
and the Baganuur open-pit coal mine, the largest coal provider for the plant,
solving the problem of constant power failure in Ulan Bator. Mongolia also
used the aid from Japan to expand the Zamyn-Üüd Train Station, located right
opposite the Erenhot Harbor in China, thus improving domestic and
international transportation capacity of Mongolia’s railways. Japan also
renewed facilities of the Second General Hospital of Mongolia, transformed
water supply system in Ulan Bator, and co-founded Mongolia’s largest mobile
communications company which has a user population of 200,000.
(Population in Mongolia is around 2.5 million by the end of 2004.)
Japan has the habit of setting up a monument containing an image of the
Historical Retrospect on Mongolia-Japan Relations and Comprehensive Partnership 47
Japanese national flag at all the facilities it helped build in Mongolia so as to
remind the Mongolians of its generosity. Assistance and aid are supposed to
be about helping the disadvantaged and the needy, with the giver not
expecting any sort of return from the taker. As the saying goes, “After you
give a rose to someone, your hands are left with the scent of the rose.” Yet
Japan has taken the trouble to remind Mongolia of even the tiniest favor it had
done the latter. Naturally, the conspicuous reminders have become something
of a burden to the recipient of Japan’s favors.
Since the signing of trade agreement in 1990, Mongolia and Japan have
further developed their economic and trade relationships. Mongolia has been
on the receiving end most of the time, with Japan being on the giving end in
the cooperative relationship. Despite occasional ups and downs, trade volume
has been growing slowly in recent years. According to statistics by the
Mongolia Bureau of Foreign Trade, there are 164 Japanese companies in
Mongolia, making direct investments of up to USD 68.599 million in
Mongolia (See Chart 1). Japan is the fifth largest foreign investment in
Mongolia. Mongolia, however, does not have one single company set up in
Japan.
Japan’s Investment in Mongolia
Chart 1
Thousand USD
48 Bimonthly Journal on Mongolian and Tibetan Current Situation Vol.15, No.3
17114.6
18000.0
мянган ам.доллар
16000.0
14000.0
12688.5
12000.0
10000.0
8476.9
8000.0
6859.9
6000.0
3769.9
3793.0
4000.0
2000.0
1831.7
532.9
100.0
2765.3
1517.2
904.5
74.8
3201.0
.7
.1
0
03
20
04
02
20
20
01
20
00
20
99
19
98
19
96
95
94
97
19
19
19
19
93
19
91
19
19
90
0.0
Source: Gangbaoledao, “Economic Relationships between Private Sectors in
Japan and Mongolia,” Internaional Forumn on Economic
Development for Private Sector in Northeast Asia: Possibilities and
Challeges, March 14-15, 2005, Ulan Bator
According to National Statistics Office in Mongolia, the country’s
bilateral trade with Japan surged sevenfold from USD 17.40 million in 1990
to the 1999 peak of USD 125.9 million, then dropped to USD 49.10 million in
2002 and rose to USD 107.9 million in 2004 (See Chart 2). Mongolia’s import
from Japan is greater than export.
Historical Retrospect on Mongolia-Japan Relations and Comprehensive Partnership 49
Mongolia-Japan Trade
Chart 2
Million USD
Монгол-Японы гадаад худалдааны нийт эргэлт
140
125.9
112.8
сая ам.доллар
120
92
100
81.4
72.5 71.9
80
58.8
60
40
20
107.9
26.9
71.7
50.3
71.9
49.1
37.9
31.4
17.4
9.4 9.7 11.1
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1990
1989
1988
1987
1986
1985
0
Source: Same as Chart 1
In 2004, Mongolia imported USD 74.50 million worth of goods from
Japan, and exported USD 33.50 million worth of goods to Japan. The exports
contain mostly raw and half-processed gold, animal products, wine, fluorite
powder, copper powder, and uniforms. The imports include mostly electric
appliances, communication equipment, building materials, mechanical
equipment, food, flour and flour products, vegetable oil, granulated sugar,
beer, cigarettes, medicine, dye colors, soap, and other daily commodities. At
present, Japan is Mongolia’s fifth largest trade partner after China, Russia, the
US, and the UK. Mongolia reckoned that inconvenient transportation and
unsatisfactory quality and quantity of Mongolian products had much to do
50 Bimonthly Journal on Mongolian and Tibetan Current Situation Vol.15, No.3
with the fluctuations in Mongolia-Japan trade volume. Daily commodities
made in Japan have lost their advantage in the Mongolian market to the
mass-produced, inexpensive ones from China, which are in popular demand
among the Mongolian middle and lower classes.
4. Japan Uses Economic Aid to Gain Access to Mongolia’s Natural Resources
1. Mongolia has a rich stock of mineral resources. Mongolia is a
country of vast territory, scarce population, and abundant natural resources.
Over 90 types of natural minerals, 3,663 mineralized points, and 417 sites of
mineral deposit have been identified in Mongolia. The natural minerals
include coal, gold, copper, molybdenum, tungsten, iron, tin, fluorite, lead,
zinc, uranium, rare earth elements, petroleum, precious stone, gypsum, etc.
Mongolia has one of the world’s largest identified deposits of copper,
phosphorous, fluorite, coal, and gypsum. According to Mongolian geologists,
Mongolia is second only to China, Russia, and the US in terms of mineral
deposits. Copper: As one of the most important basic materials for modern
industries, copper has long been perceived as an important strategic material.
As copper deposits are concentrated in limited parts of the world, big powers
have been going all out trying to gain control over copper deposits. Mongolia
currently has 240 million tons of identified high-quality copper deposits,
mostly found in northern, central, and some of the southern provinces
bordering China. The Erden copper and molybdenum mine, a joint venture
between Mongolia and Soviet Union since late 1970s, is one of the ten largest
copper mines in the world (also the largest in Asia). Exploitable for 65 years,
Historical Retrospect on Mongolia-Japan Relations and Comprehensive Partnership 51
Erden is Mongolia’s largest income generator, accounting for 1/3 of
Mongolia’s exports. China replaced the Soviet Union as the sole recipient of
Erden mineral products in 1990. In 2002, Canada’s Ivanhoe Mines discovered
the massive Oyu Tolgoi copper and gold deposits in Mongolia’s Ömnögovi
Province, some 80 kilometers from the China-Mongolia border. At present,
Mongolia has the world’s thirteenth largest copper yield. Gold: Gold deposits
are widely distributed in large quantities across Mongolia. Mongolia currently
has 3,400 tons of gold reserve in over 130 identified gold mines in northern,
central, and some of the western, southern, and eastern provinces bordering
China. Since the introduction of “Gold Project” in 1992, Mongolia has
yielded over 70 tons of gold, with 14 tons being exploited in 2004. At present,
there are over 120 companies of multinational joint venture or sole ownership
exploiting gold in Mongolia. Petroleum: Mongolia’s petroleum reserves are
found mostly in southern and eastern provinces. Preliminary estimates suggest
that Mongolia’s petroleum reserves can translate into 6 to 8 billion barrels.
The 13 larger basins located in the eastern, southern, and western provinces
bordering China contain over 3 billion barrels of petroleum in reserve. At
present, Mongolia consumes 400,000 to 500,000 tons of petroleum products
per year, mostly imports from Russia. Mongolia has been buying small
quantities of petroleum products from China in recent years. Phosphorous:
According to Mongolian geologists, phosphorous reserve in Mongolia is the
largest in Asia and the fifth largest in the world. Over 50 phosphorous
deposits have been found in Khövsgöl Province and Zavkhan Province in the
52 Bimonthly Journal on Mongolian and Tibetan Current Situation Vol.15, No.3
north, containing 5.7 billion tons of phosphorous reserve. It is expected that
phosphorous products will become Mongolia’s another major export product
after copper, gold, and fluorite. In addition, Mongolia also possesses a rich
reserve of iron, coal, lead, and zinc. Most minerals in Mongolia are
high-quality, with iron stones containing on average 50% to 60% of iron,
higher than the international average of 20% to 30%. The coals exploited by
China’s Jiuquan Irons & Steel produce an average of 8,200 cal, whereas 5,000
cal would be termed as good quality in China.
2. Mongolia’s preferential mining policies: The mining industry is an
important sector of Mongolia’s national economy. In 2004, mining industry
accounts for 17.3% of Mongolia’s GDP, 64.7% of the country’s industrial
production value, and 57.5% of the country’s export. However, the financially
disadvantaged Mongolia has not been able to invest heavily in the
exploitation of underground resources. Mongolia has conducted geological
survey on only 16.4% of its territory to date, with over 80% of national
territory still unexplored. In the face of numerous unexploited resources and a
difficult national economy, Mongolia decided in mid 1990s to encourage
foreign investments to boost the mining industry to revive local economy.
Mongolia introduced the new Mineral Resources Act and accompanying
preferential packages in 1997 allowing foreign citizens and institutions to
apply for permission to explore and exploit the country’s mineral resources.
Permission for exploration is effective for three years, and can be extended
twice, two years at a time. Permission for exploitation is effective for sixty
Historical Retrospect on Mongolia-Japan Relations and Comprehensive Partnership 53
years, and can be extended once for forty years. With its rich mineral
resources and preferential exploitation policies, Mongolia has become a
popular target among big powers. Countries like Canada, Russia, the US, and
Australia gained a foothold here long ago, and quite a few investors from
China, Japan, and Korea have followed their footsteps.
3. Japan has been eyeing Mongolia’s mineral resources. Despite
being an economic powerhouse, Japan falls short in terms of mineral
resources, having only certain reserves of coal and zinc. Japan is heavily
dependent on imported minerals, with 95.2% of coal, 99.7% of petroleum,
96.4% of natural gas, 100% of iron stones, 99.8% of copper, 100% of alumina,
94.9% of lead stones, 100% of nickel stones, 100% of phosphorous stones,
and 85.2% of zinc stones imported from overseas. As the world’s second
largest economy, Japan has been actively seeking to secure natural resources
to make up for its lack, and has set its eyes on Mongolia. The Darhan
Ironworks, built in early 1990s with the USD 65 million loans from Japan, is
the first ironwork in the history of Mongolia, with Japan being the sole
recipient of its 100,000-ton annual steel production. Earlier this year, Japan
secured the right to exploit Mongolia’s largest copper deposits. Following the
discovery of the massive Oyu Tolgoi copper and gold deposits in Ömnögovi
Province, Canada’s Ivanhoe Mines announced the discovery of what could be
the world’s largest high-quality coal deposit located near the China-Mongolia
border in southern Mongolia at the end of 2004. The coal deposit also
contains over 17 million tons of copper and 8 million tons of gold. Ivanhoe
54 Bimonthly Journal on Mongolian and Tibetan Current Situation Vol.15, No.3
Mines intended to look for a strategic partner by selling 8% to 18% of its
shares of the copper and gold mine. Following negotiations with companies
from Japan, Korea, and China, Ivanhoe Mines chose Japan’s Mitsui & Co. as
its partner in the end. The two parties signed a memorandum of understanding
in Ulan Bator in April 2005 to form a strategic alliance to co-exploit the Oyu
Tolgoi copper, gold, and coal in Ömnögovi and build transportation, power
supply, and other infrastructure in the region. Production is expected to begin
in 2007. The company also owns or controls the right to exploit resources on a
125,000-square kilometer land in Mongolia. In addition, Japan is heavily
dependent on the Middle East for petroleum supply, but constant warfare in
the region in recent years has forced Japan to look elsewhere for steady supply.
Far East Russia is Japan’s major target, with Mongolia also a likeable choice.
Japan has been trying to add to its reserve of uranium, an important material
for nuclear power, and Mongolia has plenty of uranium in Dornod Province.
Japan is also interested in Mongolia’s rich stock of gold, iron, and many other
mineral resources, while Mongolia is attracted to Japan’s capitals and
advanced technologies, which would come in handy in the exploitation of
resources and pose a serious threat to other foreign contenders. In fact, Japan
can attribute its successful entry to Mongolia’s natural resources to its
long-term relationship with Mongolia, especially its economic aid.
Another aspect of Mongolia that Japan finds attractive is tourism. The
beautiful nature, complete with blue sky, white clouds, and fresh air, provides
a huge attraction to the skiing and hunting-happy Japanese. The Japanese are
Historical Retrospect on Mongolia-Japan Relations and Comprehensive Partnership 55
even into Mongolia’s desert because they have never seen anything like this at
home. The majority of foreign tourists having a good time in Mongolia are
Japanese, with over 10,000 visiting the country every year. Japan is also
fascinated with Mongolia’s nomad culture. In 1991, Japan signed an
agreement with Mongolia to dispatch volunteers to work there. Since then,
thousands of Japanese young people have traveled to Mongolia to observe the
nomad civilization and experience the ancient nomad lifestyle visible only in
Mongolia.
5. Active Educational and Cultural Exchanges and Cooperation between
Mongolia and Japan
Since its transition to democracy, Mongolia has seen wider educational
and cultural exchanges and cooperation with Japan. The Japanese realize that
the only way to win the hearts of the Mongolian people, besides economic
assistance, is to invest heavily in educational and cultural exchanges. After
1990, each year over 200 Mongolian nationals visit Japan for short-term or
long-term studies and academic exchange, and in 2004 Japan received 500
Mongolians on academic mission. Most of their expenses in Japan are
covered by the Japan government. Dozens of government and self-financed
Japanese citizens go to Mongolia each year to study the language, culture, art,
and folk customs at universities.
Japan launched the “Grassroots Project” (an assistance project directed at
ordinary citizens) in Mongolia in 2002, switching the focus of assistance from
56 Bimonthly Journal on Mongolian and Tibetan Current Situation Vol.15, No.3
economy to cultural exchange. In June 2002, the Mongolia-Japan Cultural
Center, built with the MNT 4 billion (around USD 3.40 million) from Japan,
was unveiled within the National University of Mongolia. The center provides
seminars, Japanese movies, and Japanese language sessions for young people
on a regular basis, and now has become an important venue for Mongolian
citizens wishing to learn more about Japan. In 2001, Japan single-handedly
funded the building of six primary schools in Mongolia, and set up a plan to
send 10 Mongolian teachers per year to training in Japan. Since 2003, Japan
has shifted its focus of education investments in Mongolia from the capital
Ulan Bator to the pastoral areas, especially the poverty-stricken provinces and
counties. In 2003, Japan invested USD 1.5 million in 70 schools in 21
provinces and cities in Mongolia under the “Grassroots Project.” In 2004,
Japan launched another 25 initiatives costing a total of MNT 2 billion under
the same project, including renovation work for primary and secondary school
buildings, kindergartens, and hospitals and clinics, financial assistance for the
disabled, computers, DVD players, and color TVs for schools, and power
generators, transformers, new water pipes, and wastewater treatment system
for rural villages. By the end of 2004, the Embassy of Japan in Mongolia,
Japan International Cooperation Agency in Mongolia, the government of
Mongolia, Asian Development Bank, and World Bank had invested MNT 19
billion (around USD 16 million) to renovate or expand 308 educational
institutions in Mongolia. In early September, 2005, Japan provided JPY 50
million to renew the facilities of the Mongolia College of Music and Dance.
Historical Retrospect on Mongolia-Japan Relations and Comprehensive Partnership 57
The agreement was signed between Japanese Ambassador to Mongolia and
Mongolian Foreign Minister in a rally. Since 1984, Japan has provided JPY
713.3 million in cultural assistance for Mongolia on 17 occasions. 6
Japan’s non-governmental organizations have also been active providing
educational and cultural assistance to Mongolia. The Japan International
Cooperation Agency built shortwave radio centers in Ulan Bator, Govi-Altai
Province, and Muren City. Japan’s “Mongolia Partner” organization gave
away 250 blackboards to schools in Mongolia’s pastoral areas. The
representative of “Peace Tide,” another Japanese NGO, signed an agreement
with the Japanese Ambassador to Mongolia in 2004 to give photocopying
facilities to schools in Mongolia under the Japan government policy of
encouraging NGOs to provide assistance for Mongolia. According to the
agreement, the NGO will work with the Mongolian Ministry of Education,
Culture and Science to provide USD 24,000 worth of facilities to 15 schools
in Ömnögovi Province and Dundgovi Province.
Exchange works both ways. In recent years, Japan and Mongolia have
been hosting mutual cultural festivals to each other every year. The Japanese
cultural festival in Mongolia provides a good venue for the people to
understand more about Japan’s history, culture, and social and economic
development. In the Mongolian cultural festival financed by Japan in Aichi
Prefecture in May 2005, there were long song, folk song, khoomei (an ancient
throat signing), dance, and folk music performances featuring instruments
6
Alatanhuyge, “Japan Helps in Culture and Art,” www.olloo.mn/2005-09-02.
58 Bimonthly Journal on Mongolian and Tibetan Current Situation Vol.15, No.3
such as the morin khuur given by Mongolian artists. The numbers were well
received by the Japanese audience. In the area of sports, Mongolia has been
sharing some great success with Japan in sumo wrestling. After just a few
years, Japan-based Mongolian sumo wrestlers have surpassed their Japanese
counterparts in terms of skills. Right now Japan has around 800 professional
sumo wrestlers, from the lowest rank of deshi to the highest rank of yokozuna.
The five highest ranks are yokozuna, ōzeki, sekiwake, komusubi, and
maegashira, with yokozuna being an unparalleled position. In the 300 years
since the birth of the rank of yokozuna, only 68 sumo wrestlers have been
awarded the title. Asashōryū Akinori, a Mongolian native born as
Dolgorsürengiin Dagvadorj, began professional sumo wrestling in 1999 and
became the 68th yokozuna in the history of the sport in Japan in 2002, after
merely 25 sumo matches. He is the only active yokozuna in Japan for the time
being, and also the country’s fastest promoted yokozuna. He is known for
adopting a fighting style of ferocious attacks and employing techniques, and
has become a rising star in the world of sumo wrestling in Japan, dubbed “a
lion that shocks the island state” by the Japanese. In the Natsu (summer)
Basho in 2005, Asashōryū scored straight victories and won the Emperor’s
Cup for the 15th time. Since Asashōryū’s promotion to the highest rank of
yokozuna in 2002, the Mongolians have become more into sumo wrestling.
Of the dozens of Mongolian wrestlers in Japan, four are competing at the
makuuchi division (top division), including Asashōryū (Dolgorsürengiin
Dagvadorj), Kyokushūzan Noboru (Davaagiin Batbayar), Kyokutenhō
Historical Retrospect on Mongolia-Japan Relations and Comprehensive Partnership 59
Masaru (Nyamjavyn Tsevegnyam), and Asasekiryū Tarō (Badarchiin
Dashnyam). Another five Mongolian wrestlers are competing at the makushita
division (third highest vision), 16 are competing in the sandanme (fourth
highest division), and 6 are competing in the jonidan (fifth highest division).
Even the lowest division of jonokuchi has Mongolian wrestlers competing in
it. Sumo training stables in Japan, well aware of the fact that Mongolian
wrestling has a lot in common with sumo wrestling, prefer to train Mongolian
wrestlers who have more strength in their leg muscles. The Japanese have
begun to wonder why the top prize in sumo wrestling, a 300-year-old martial
art revered as a national sport in Japan, keeps being claimed by Mongolian
wrestlers with only a few years of professional experience under their belt,
and why Mongolian wrestlers keep outdoing their Japanese counterparts at
home or in sumo demonstrations abroad. It is said that the Japanese believe
that this might have something to do with the fact that the Mongolian have
been having beef and mutton as staple for generations.
Mongolia has a special place in the heart of the Japanese because they
are convinced that their ancestors are Mongolian. As such, Japan’s Takara
Shuze Co. made an agreement with Mongolian government agencies in 2001
to use Japan’s science and technology to study the Mongolian gene 7 and
compare it with that of the Japanese in order to uncover the roots of illness
and develop new medicine.
7
Zhang Ke-xi, “Japan to Work with Mongolia to Study Mongolian Gene,” www.sina.com.cn /2001－04－23.
8
Yang Tao, “Japan to Strengthen Ties with Mongolia,” Global Times, September 15, 2004, p.7.
60 Bimonthly Journal on Mongolian and Tibetan Current Situation Vol.15, No.3
6. Japan’s Purpose in Developing Relationship with Mongolia
Japan’s many years of investment has begun to pay off, and the
government and the people of Mongolia are grateful for Japan’s generosity.
After Japan was hit by a massive earthquake in November 2004, Mongolia
wasted no time in pledging to take care of the 1,500 victims in Niigata
Prefecture. As a return of Japan’s generosity, Mongolia built a Japanese
captive monument near Ulan Bator (see picture below) at the request of Japan.
Mongolia also stands by Japan on the six-party talks on Korean nuclear
issue, 8 and even supports Japan’s bid to become a permanent member of the
UNSC.
Japan has been maintaining relationship with Mongolia for two reasons.
Firstly, Japan needs to expand its political influence in order to play a more
active role in Asia. Japan promoted the idea of East Asia economic
cooperation in the 1980s, but it needs the approval of China, North Korea,
South Korea, and Mongolia in East Asia to make the idea work. Of the four
countries, Mongolia poses the least threat to Japan. It would be reasonable for
Japan to begin by making friends with Mongolia to secure political and
economic advantages in East Asia cooperation. Secondly, Japan has been
developing relationship with Mongolia based on the latter’s urgent need for
foreign investments. This allows Japan to exercise greater influence on
Mongolia’s politics and economy, play a more active role in Mongolia, and
get ready for the mass exploitation of Mongolia’s natural resources.
Historical Retrospect on Mongolia-Japan Relations and Comprehensive Partnership 61
(This paper was submitted to the review panel on February 27,
2006. Review was completed on March 3, 2006, and revision was
completed on March 27, 2006.)
Japanese Captive Monument in Mongolia
Photographed by Yang Tao in September 2004