Guest Post: The Thunder Dragon Arrives on Dragon Year: Mongolia and Bhutan Are Just Getting Started

By Benjamin Nuland

If I could give an award for Mongolia’s ‘most underestimated relationship’, it must be that with Bhutan. Mongolia’s relationship with Democratic Bhutan began on January 18, 2012, when UN representatives of both nations mutually signed letters of communique in Mongolia’s permanent UN Mission office in New York. In March of 2016, Mongolia sent its first ambassador to Bhutan, hoping to convince Bhutan to join the International Think Tank for Landlocked Developing Countries (ITTLLDC). On June 17th, Mongolia welcomed Bhutan’s first ever ambassador to the nation, Amb. Vetsop Namgyel, to submit a letter of credence from President Khurelsukh. As a non-resident ambassador, Amb. Vetsop Namgyel serves as the ambassador to Japan, Afghanistan, Nepal, and Mongolia from the Bhutanese embassy in New Delhi. And most importantly, on July 8th, Mongolia welcomed the King of Bhutan for the first time in its history as an honored guest to Naadam.

In its short history as a democracy, Bhutan has established diplomatic relations with relatively few countries – approximately 50 countries plus the members of the UN Security Council. By and large, Bhutan has not been involved in multilateral organizations either other than a few UN activities.

Bhutan’s long-standing dependence on India hit the skids during the recent COVID 19 pandemic as the interruption of imports from India resulted in 15% inflation in food prices. 63,900 school children went without school meals.

With a contested history with China, especially concerning China’s involvement in Tibet, Bhutan has no intension to engage in friendly relations with China. Yet concerned about China’s territorial claims on the border and China’s ambitions to assert control over Buddhism, Bhutan also doesn’t want to provoke China in any way.

Like Mongolia then, Bhutan must look beyond its two big neighbours to find partners.  Yet, to prevent to prevent antagonizing any global power, Bhutan also cannot expand relations to the extent that it becomes over involved in international political webs.  Since 2006 Bhutan has carefully committed to creating diplomatic relations that avoid big power states, opening relations with 32 countries like Colombia, Armenia, Oman, and now Mongolia.

Although Mongolia hopes to build trade and investment with Bhutan, their economic relations are currently non-existent. In 2022, exports from Bhutan to Mongolia were estimated to be $589In 2018 Mongolian exports to Bhutan were just $625, mostly cheese products. It seems rather interesting that Mongolia and Bhutan maintain such close relations despite their lack of trade. In fact, their relationship is primarily based on shared history, culture, geographical circumstance, and most importantly, religion.  Beyond that, geopolitical similarities, such as their common dependence on hydropower, tourism, and mining, and their reliance on neighbors to export their products, also account for their common interest in diversifying their economies.

Membership in Multilateral Organizations

The greatest gain for Bhutan is growing their participation with regional and religious multilateral organizations.

Using Mongolia as a springboard for further involvement in the ITTLLDC would fit perfectly into Bhutan’s foreign policy objectives.  Similar to Mongolia’s ‘Third Neighbor Policy’, doing so would align Bhutan with nations less likely to threaten its economic or geo-political sovereignty. Furthermore, aligning with landlocked developing countries, Bhutan could leverage their focus on Gross National Happiness to create incentives for other countries to establish bilateral relations with them. Given Bhutan’s concerns over Chinese encroachment, especially on a disputed border, an established network of friendly nations could create a watchdog effect and preserve their sovereignty.

On addressing the security concerns of Bhutan’s undisclosed border with China, Mongolia would also offer the opportunity for the Royal Bhutan Army to re-join Khaan Quest, a multilateral defense training program led by global powers like the US, China, Canada, India, Germany, and more. Although only possessing a national defense force of about 8000 personnel, Bhutan can be sure their army receives the best military education from the program. Renewing their participation in Khaan Quest would be important not just for their military, but also to provide Bhutan a better ‘insurance policy’ in the case of military altercations on the Sino-Bhutanese border.


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Mongolia could also facilitate Bhutan’s membership in Buddhist multilateral organizations. Having founded the Asian Buddhists Conference For Peace (ABCP) in 1970, Mongolia has been able to attract a coalition of Buddhists from Bangladesh, Cambodia, Central Tibetan Administration in Dharamshala, India, Japan, Mongolia, Nepal, both North and South Korea, Laos, Russia (Buryatia), Sri Lanka, Thailand and Vietnam, notably without China. It was only recently that Bhutan began to show interest in joining the organization, applying to be a member in January 2024. Condemning China for its involvement in Tibet, Bhutan’s tense relationship with China can be reflected in a will to protect its own Buddhist sovereignty. Collaborating with other Buddhist nations under similar pressures by China, Bhutan can be sure that their voice for regional peace and resistance to China’s assertion of control over Buddhism will be supported by a collective of nations.

Address Food Insecurity & Support Digital Policy

Like its policies with other southeast Asian nations, Mongolia would be open for educational exchanges, specifically for Bhutanese scholars to attend Mongolian Universities. Bhutan hopes to capitalize on this, sending students to Mongolia’s University of Life Sciences and National University of Medical Science. In perfecting their skills in crop management, Bhutanese scholars from Mongolian universities can better address Bhutan’s food insecurity issues, which at one point in 2017 affected one out of three people throughout the nation.

From the Digital Drukyul in 2010 to the establishment of Thimphu Techpark in 2012 to creating an Identity System in 2023, Bhutan has been very ambitious with their digitization policies. Thimphu Techpark specifically was met with huge success, especially with employing the youth as well as attracting foreign investors. Mongolia seems to be on a similar trajectory, passing eMongolia and D-Parliament for online services and government transparency initiatives. While exchanging expertise on the techpark project could help Mongolia address their issues regarding youth unemployment and slugging western FDI, Mongolia can help Bhutan on strengthening government digitization initiatives, improving Bhutan’s transparency and governmental efficiency. Nevertheless there does leave space for more collaboration in the future; bilateral exchanges on technology innovation launched in 2022 have considerable space for expansion.

What Could Mongolia Gain in a Relationship with Bhutan?

Being heavily dependent on fossil fuels, Mongolia could learn from Bhutan’s commitment to renewable energy. Bhutan boasts a high percentage of energy consumption derived from renewables –82.5% in 2022.The greatest force behind this is hydroelectricity, being both Bhutan’s main source of energy and Bhutan’s largest export. Furthermore, Bhutan seeks to grow on this sector, with a $275 million Dagacchu hydropower plant project projected to increase electric output by 126 megawatts. Mongolia, having just established projects with Japan to construct dams in Govi-Altai and Khuvsgul, would benefit from exchanging with the Bhutanese on government mechanisms to increase hydroelectric output. In fact, bilateral collaborations began in June of 2019 when a delegation from The Bhutan Power Corporation visited Mongolia to cover topics on energy sector legal frameworks.

On a more symbolic level, its relationship with Bhutan has provided Mongolia a new spiritual ally in the Asian region. Mongolia has always received pressure from China to disavow the Dalai Lama as its spiritual figure, whether through sanctions imposed on Mongolia after the Dalai Lama’s visit in 2016, or China’s request to bring the newly instated 8 -year-old US-born Mongolian Khalkha Jetsun Dhampa back to Mongolia under Chinese observation. By welcoming Bhutan as a new member of the ABCP, Mongolia is one step closer to strengthening its international support base to resist Chinese Buddhist influence. Furthermore, participating in bilateral agreements with Bhutan, Mongolia is also indirectly supporting another spiritual neighbor and Bhutan’s biggest economic partner, India. Improving already warm relations with India through Bhutan, Mongolia could count on more support from India, a growing global power, to voice concerns on the international stage about growing Chinese influence.

Mongolia as ‘Big Brother’

Being a minnow under most bilateral relations, specifically under those with China and Russia, reaching a relationship with Bhutan would be one of Mongolia’s first opportunities to symbolically become an ‘older brother.’ Although both nations share similar concerns regarding geographical difficulties, national security, and Buddhist sovereignty, Mongolia believes that its democracy, more developed compared to that of Bhutan, can take the front step promoting physical and digital development. With Mongolia founding both the ITTLLDC and the ABCP on an international level, Bhutan’s support and membership within these organizations would make them a trusted companion to the Mongolians, specifically in their geopolitical prominence in hosting multilateral dialogues. And although Bhutan doesn’t have much to ‘give’ to Mongolia, their assertion of Mongolia’s role as a facilitator of regional dialogue gives Mongolia an international status that Mongolia’s Third Neighbor Policy aspired to become in the first place.  In short, what Bhutan could gain from this relationship is material, while Mongolia’s benefits are more geo-political.

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.

About Julian Dierkes

Julian Dierkes is a sociologist by training (PhD Princeton Univ) and a Mongolist by choice and passion since around 2005. He teaches in the Master of Public Policy and Global Affairs at the University of British Columbia in Vancouver, Canada. He toots
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