The Role of Russia in the Economy and Foreign Economic Relations of Mongolia under Present-day Conditions

Abstract

The paper analyzes the economic relations between Russia and Mongolia at the present stage of its development. The dynamics and structure of trade and investment interaction between the two countries are investigated. It has been established that the Russian Federation still remains one of the main foreign trade partners of Mongolia, although the role of the Russian factor in the Mongolian economy is gradually decreasing. High customs duties on traditional Mongolian exports and high transportation costs raise a significant barrier to the development of mutual trade relations. Investment cooperation has not yet reached a significant level of development, partially due to high competition from third countries. It is concluded that the current state of economic interaction between Russia and Mongolia does not correspond either to the achieved level of cooperation in the political sphere or available opportunities. The positive attitude towards Russia among the political elite and population of Mongolia establishes favorable conditions for enhancing interaction between the two countries. The authors put forward specific recommendations to strengthen the Russian positions in Mongolia indicating some promising areas of cooperation.