By Benjamin Nuland
On June 11th 2024, Mongolia welcomed the Laotian president to Sukhbaatar Square for the first time since 2007. Thongloun Sisoulith’s arrival celebrated a 62-year long friendship between Laos and Mongolia and decades of goodwill. In the 1980s and in 2018, a total of 1,200 sheep and a 60-bed hospital were donated by Mongolia, and in 2003, Laos donated 76 beautiful red mahogany desks for Mongolia’s Great State Khural’s Government Palace, pledging 50 more in 2024 for Mongolia’s expanded parliament. In hopes to create 60 years of ‘better friendship,’ the two nations signed a series of 10 agreements over two presidential visits. Despite the benefits to trade, the greater success for Mongolia lies not in economic and cultural cooperation, but rather in forming a protective pact against China and fulfilling its strategic goal in amplifying its voice in Southeast Asian regional dialogues.
Эрхэм Ерөнхийлөгч Тонглун Сисүлит, хатагтай Нали Сисүлит Монгол Улсад тавтай морил. pic.twitter.com/HRIBJzItyc
— Ухнаагийн ХҮРЭЛСҮХ (@UKhurelsukh) June 11, 2024
2022-2024: 60 Year Anniversary and A New Vision of Cooperation
Монгол Улсын Ерөнхийлөгч Ухнаагийн Хүрэлсүхийн Бүгд Найрамдах Ардчилсан Лаос Ард Улсад хийж буй төрийн айлчлалын хүрээнд хоёр улсын харилцаа, хамтын ажиллагааны баримт бичгүүдийг байгуулав.
????????????????#Айлчлал@BattsetsegBatm2▶ https://t.co/jnAVgI2mHZ pic.twitter.com/L38F5yMkv4
— MFA Mongolia (@MongolDiplomacy) November 6, 2023
The 60th anniversary of bilateral relations in 2022 served as a momentous occasion for both Laos and Mongolia, as intercultural exchange programs and celebrations were hosted by both nations. However, the happy occasion also marked a reckoning that beyond gestures of goodwill, the relationship had never evolved into a full-fledged partnership. Therefore, a commitment to enhancing the friendship for ‘60 better years’ became a motive for action.
In a new vision for cooperation, the Laotian Minister of Foreign Affairs, Saleumxay Kommasith, met with Mongolia’s Minister of Foreign Affairs and Trade, Battsetseg Batmunkh, in September 2022 to begin drafting new agreements on air travel and environmental cooperation, also signing the Agreement on Student Exchange 2022-2027. While Mongolia committed to increase its aid to Laos’s agricultural industry, Laos committed to combat climate change and desertification in Mongolia through the ‘One Billion Trees’ Program, targeting the reforestation of 16.6 million hectares of the Mongolian plateau by 2025.
After pre meetings in September of 2023 finalized the legal framework for inter-parliamentary cooperation, President Khurelsukh paid a visit to Vientiane in November to sign seven cooperation agreements. Focusing on a dual mandate of agricultural cooperation and interpersonal exchange, Laos and Mongolia’s agreements aimed to align animal and plant quarantine measures, investment in plant protection and veterinary medicine, and seal aviation agreement for direct flights. Of greater note was joint proclamations by the presidents on tourism, establishing the ‘Year to Visit Mongolia 2023’ and ‘Visit Laos Year 2024.’
Монгол Улсын Ерөнхийлөгч Ухнаагийн Хүрэлсүхийн Бүгд Найрамдах Ардчилсан Лаос Ард Улсад хийж буй төрийн айлчлалын хүрээнд хоёр улсын харилцаа, хамтын ажиллагааны баримт бичгүүдийг байгуулав.
????????????????#Айлчлал@BattsetsegBatm2▶ https://t.co/jnAVgI2mHZ pic.twitter.com/L38F5yMkv4
— MFA Mongolia (@MongolDiplomacy) November 6, 2023
President Sisoulith’s June 2024 visit to Ulaanbaatar cemented the agreements and marked the beginning of a new era in Laos-Mongolian relations. Sharing a joint vision on environmental protection President Sisoulith committed to creating a dedicated area within Ulaanbaatar’s “International Eco Park ”to support the “One Billion Trees” National Project. Following the new mandate to increase bilateral agricultural trade, an agreement was signed to formalize veterinary certification for meat exports and hygiene requirements for animal products. To serve the second mandate, two agreements were signed to encourage technical exchange within health and medical sectors, as well as cultural exchanges, research, and joint trainings.
Potential Concerns with the New Agreements
Despite the two countries’ efforts to strengthen economic ties, Mongolia has found it difficult to create business interests in Laos. Except for the Mongolian doctors who traveled to Laos in the 80s, Mongolians have little to no knowledge of Laos. More critically, Mongolia’s key exports have limited market potential in Laos. Though both Mongolia and Laos have relatively free economies, neither country has established trade in the other. In 2021-2022 the volume of trade between the two nations totaled just $45,700, with Laotian exports to Mongolia accounting for almost all of that amount.
While Laos and Mongolia are trying to address this issue by creating the Mongolian-Laotian business roundtable, it seems unlikely that this agreement will materialize into anything valuable for either nation. Prior to 2018 Mutton and Mahogany underpinned a friendship built on goodwill, but trading Mutton for Mahogany will never develop into a vibrant economic relationship.
The question then arises: Why push for this agreement at all?
A Third Neighbor Strategy?
Laos and Mongolia share very similar concerns about their constraints. Geographically, Laos and Mongolia are both landlocked countries surrounded by regional powers — Mongolia is enveloped between China and Russia, and Laos is surrounded by China, Thailand, and Vietnam. Economically, both are heavily dependent on single industries – mining in Mongolia, agriculture in Laos. Both countries are concerned about their indebtedness to China and the increasing risks that result. China has funded 815 projects in Laos since 1989 worth $16 billion, and invested $5.4 billion in Mongolia since 1990. Mongolia still owes $2 billion from its Currency Swap Agreement with China, while Laos’ debt exposure from railway projects alone is $12.2 billion, 64.8% of its GDP. Meanwhile both currencies are devaluing versus the dollar (LAK -45%, MNT -30%), further complicating debt repayment.
Because of their similar struggles against China’s economic influence, Mongolia and Laos would both benefit from an unspoken alliance to protect both nations from the harms China could inflict. Institutionalizing legal frameworks for cooperation creates a more convenient system for direct dialogue and bilateral measures in response to China. The elaborate network built on a history of trust and mutual support also serves as a potential lever for debt forgiveness; both countries together can have a louder voice in appealing to the international community for debt forgiveness, term extension, or reduction in interest rates from China.
Because Laos is in a larger debt crisis, it may seem that this pact is more beneficial to Laos. In fact, Mongolia’s benefits far outweigh those afforded to Laos. By assuring a cooperative relationship with Laos over the past two years, Mongolia has been able to secure an opportunity to amplify their voice in ASEAN. During its 2024 tenure as ASEAN president, Laos invited Mongolia to host a regional forum, the ‘Steppe Lotus Workshop,’ on countering biological warfare. While this could enhance Mongolia’s reputation as an advocate for peace, it also elevates Mongolia’s position as an arbiter of its neighbors’ interests in the face of China’s rise. Over time that position could evolve into an intermediary role as conflict arises between regional powers.
Conclusion
‘Mutton and Mahogany’ is not about trade, but it does reflect Mongolia’s policy playbook — creating a framework for mutual protection based on history, goodwill and common concerns about dominant neighbors. Through partnership with Laos, Mongolia can expand its friendly networking to Southeast Asian nations.
The playbook directly addresses Mongolia‘s greatest fear: of being ‘forgotten’ by powers who could defend and protect them in case Russia and/or China violates their sovereignty. The more Mongolia engages with its neighbors as it has with Laos, the better it can attain an ‘insurance policy’ of international awareness and support. Therefore, ‘Mutton and Mahogany’ is not for economic benefit but for Mongolia’s security, through means of friendship, kinship, and goodwill.
By aspiring to take on an intermediary role in regional and international dialogue, Mongolia hopes to make itself uniquely valuable to the international community. With its non-adversarial positioning and commitment to universal neutrality, Mongolia believes it has the potential to become the global ‘golden retriever’ (i.e., trusted companion). Using its non-threatening economic and military stature to its benefit, Mongolia can create a comfortable space for discussion, free of concerns over leverage, unlike other intermediaries like the UAE, Qatar or China. Mongolia’s evolution as a ‘trusted’ moderator for international discussion would create vested interest in all nations to assure Mongolia’s sovereignty. Therefore, a step towards friendship is a step towards security. So while obtaining Laos’ support may seem like low-hanging fruit, Mongolia’s ‘Mutton and Mahogany’ project could serve as a stepping stone to a grander mission: To protect Mongolia against the risks of domination by their stronger neighbors.
About Benjamin Nuland
Benjamin Nuland is a Jack Hachigian Scholar at Yale University currently studying history and international relations. Recently completing the Directed Studies Program, he’s received the Topol Silliman Grant and the Summer Experience Award to study in Mongolia the summer under the guidance of Professor Arne Westad and Professor Julian Dierkes.
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