In 2022, Mongolia and Australia celebrated the 50th anniversary of establishing diplomatic relations. Despite the geographical distance, Ulaanbaatar and Canberra have successfully established strong bilateral cooperation in areas like education, mining, gender equality, civil society, and defense.
The Diplomat spoke to Katie Smith, ambassador of Australia to Mongolia, on the two countries’ ever-growing bilateral relations.
Considering the growing bilateral relations between Mongolia and Australia, what are some of the ongoing and upcoming major projects?
Over 52 years of unbroken diplomatic relations, Australia and Mongolia have an enduring partnership built on mutual respect and shared interests with strong economic, security, education, and people-to-people ties. Our two countries are located in an increasingly uncertain region, and we value Mongolia as an Indo-Pacific partner. I see our relationship as going from strength to strength. As Australian ambassador, it’s an honor to contribute to advancing our relationship to the next level.
Mongolia has great potential with its dynamic young population, commitment to democracy and natural resource endowments. That is why we’ve seen it as vital to invest in supporting Mongolia’s human capital.
Our education linkages are growing. Our Australia Awards scholarships to Mongolia have been running for over 30 years with 750 alumni. I was so pleased to be able to announce an increase of 50 percent to 15 awardees this year and hope to increase this number again next year.
These alumni, our “Mozzies,” are making remarkable contributions to Mongolia’s development in the Parliament, government, civil society, and private sector. They have inspired thousands more Mongolians to study in Australia, including around 9,000 this year. We are also planning to start a new program to support technical and vocational education and training in Mongolia to help build a competent workforce that will meet the emerging needs of the labor market.
Australia has a long-standing commitment to gender equality and the human rights of women and girls. In Mongolia, I’m very proud of our ground-breaking Women’s Leadership Program. The program assists our Australian alumni to improve their leadership skills, succeed professionally, and help participants deal with gender barriers in the workforce.
The Australian Volunteers program is another development program that strengthens people-to-people links between our two countries. Currently, we have 18 volunteers working with Mongolian organizations across a range of sectors. We’ve assigned volunteers to provide English language training to public school teachers, in support of the Mongolian government’s new policy to implement English as the second language in education.
Australia also has a small flexible grants program that supports social and economic issues important to achieving national and subnational development. Through this program, Australia has assisted more than a hundred Mongolian organizations to implement over 130 projects in priority areas of gender equality, disability inclusion, youth empowerment, and environment.
Australia and Mongolia will partner to tackle our common challenge of climate change. We’re planning to work with our partners to enhance women’s climate resilience as well as support our Australian Center for International Agricultural Research to start a project in sustainable grasslands management.
Our two countries also actively cooperate in areas of global and regional security and peacekeeping. Australian security experts and defense officials regularly participate in the Ulaanbaatar Dialogue and peacekeeping and humanitarian exercises such as Khaan Quest and Gobi Wolf.
An important part of our defense cooperation is long-term and short-term training programs for Mongolian defense personnel in Australia, and we’ve been running English language training programs for the Mongolian Armed Forces since 2018, which we’re increasing this year.
Mongolia’s dependency on its mining sector has been discussed for decades now. Australia is also a major mining economy. In your view, what are some of the important experiences Mongolia can adopt to diversify the country’s economy?
As Australia is a strong partner in the resources sector, it is encouraging to see Mongolia leverage its large endowment of natural resources to sustain strong growth in its mining sector. Minerals exports have and will continue to be a main driver of Mongolia’s economic growth for the foreseeable future. Mining plays a significant role – it provides direct and indirect employment, boosts education and skills development, and advances social progress.
As alluded to in your question, the economic fortunes of Mongolia are very much tied to the volatility of global mineral commodity prices and geopolitical challenges. Being blessed with natural resources is no guarantee for prosperity. Australia is no stranger to the challenges posed by an economic growth model underpinned by mining. Mining has long been part of Australia’s story. It is still important to our economy – it is called the backbone of Australia – it provides around 65 percent of our exports and around 15 percent of our GDP.
In my various engagements across government, civil society, and the Mongolian people, I have been heartened to hear that so many consider Australia as a developmental model with economic advantages similar to its own. Indeed, we share much in common such as our sparsely populated, resource-rich lands. Australia faces many of the same challenges that Mongolia is seeking to address now.
With a land vulnerable to climate change and lack of water, we’ve prioritized the highest social and environmental protections in our mining sector. We’ve developed strong safety standards. And we’re working on protecting our cultural heritage. We are aware that gender equality in our mining sector needs work. Our policies are continuously being improved to promote investor confidence.
As a proud third neighbor, Australia is pleased to be a strong partner of Mongolia in addressing these challenges. Through our Australia Mongolia Extractives Program (recently concluded), Australia was pleased to partner with the Mongolian government, private sector, and civil society to improve the investment climate and upscale the technical capabilities of both the government and the private sector to ensure extractives development leads to national as well as local development opportunities.
Moving forward, there is strong commercial interest and investment potential in Mongolia’s minerals and energy sector. Australian companies are well-placed to assist in developing a sustainable resources sector in Mongolia, which provides jobs and incomes. The Oyu Tolgoi copper mine is a world-class mine that we can all be proud of. Australian companies are bringing innovation, technology, skills development and the highest environment, social and safety standards.
Although mining and agriculture still account for a large share of Australia’s economy, our economic success also has been based on investment in human capital – a healthy, well-educated, and innovative workforce. Alongside this investment in the social sector were serious economic reforms, opening up the economy and privatization and liberalization.
The services sector, such as tourism, education, and finance, now constitutes the bulk of Australia’s economy, contributing to around 80 percent of production and nearly 90 percent of employment. Australia continues to invest heavily in education and research.
We continue to adapt to the changing global context; for example, the Australian government has a strategy to invest in critical minerals to seize the opportunities of the clean energy transition.
What are some of the challenges Australian businesses face in investing in Mongolia and how can the government address and improve the business environment?
I am pleased to say that Australia and Mongolia have flourishing economic and commercial ties. There are over 60 Australian-affiliated companies operating in Mongolia and Australia is keen to grow this presence.
Through our engagement with Australian businesses operating in Mongolia, I have heard much about the immense potential that Mongolia represents but also some of the key obstacles that companies face when developing projects.
We have been encouraged to see the Mongolian government take action to encourage foreign investment, in particular for mining investments, through the recent changes to the Law on Investment. A great positive that I hear frequently is the high capability of the Mongolian people – their innovation and ingenuity are strengths in business and developing ties.
Some of the notable concerns include bureaucracy and corruption, legal and taxation uncertainty, and infrastructure limitations. Navigating bureaucracy has represented a complex and time-consuming task for many Australian investors.
Addressing corruption remains crucial to attract foreign investment. We recognize that the government has been proactive in trying to deal with these issues. Concrete actions such as the shift to E-Government and increasing transparency, looking at the minerals law again, are going to encourage more investment here in the mining sector.
What are some of the social issues you have witnessed that you think Mongolia needs to focus on? Are there any Australian experiences Mongolia can adopt to solve these issues?
We’re proud to work in partnership with the Mongolian government and civil society to address some of Mongolia’s most pressing social issues. We have recently been cooperating on health, disability inclusiveness, environment, gender equality, human rights, and disaster management.
A crosscutting issue that we prioritize in all of our work is progressing gender equality. Mongolian women are strong, well-educated, and hardworking, and they make such a big contribution to the economy and society.
There are still challenges, including around women’s political participation and representation. The constitutional reforms in 2023 that increased the quota for women among party candidates to 30 percent and to 40 percent in the 2028 election are very much welcomed. We’ve also been pleased to work closely with the National Committee on Gender Equality and civil society organizations such as the Gender Equality Center.
Related to gender equality is addressing violence against women and girls. Australia has a National Action Plan to End Violence Against Women and Children within one generation. We recognize that it’s not only a social challenge, but an economic one. In Mongolia, we’re prioritizing ending violence against women through our advocacy and grants to partner organizations to prevent and respond to this issue at every level of society.
One of the most innovative ways we’re drawing attention to disability inclusion is through the support the Australian government has given to a partnership between Australian NGO Bus Stop Films and the Arts Council of Mongolia. They’ve collaboratively made two inclusively produced short films, “Stairs” and “The Dancer,” to highlight the challenges faced by individuals with a disability in Mongolia and how they overcome these.
Mongolia recently developed its long-term strategy, Vision 2050. What at some of the projects or development cooperation Australia is interested in and which sector Canberra is keen on cooperating in?
Australia is committed to working with Mongolia to support its social and economic development under Vision 2050. We’ve been focusing on supporting education, mining, and energy sector development and progressing connectivity with Australia.
I’m keen to deepen our cooperation and share Australia’s experience on climate change and agriculture. Mongolia and Australia are both grappling with the impact of climate change including drought, floods, fires, and extreme weather. We’ve seen Mongolia experience a particularly devastating dzud with an unfathomable impact on herders.
Australia is pleased to be partnering with the Mongolian Red Cross to provide humanitarian support to these families and to support the National Emergency Management Authority to deliver disaster resilience community education. To support longer term sustainable practices, we’ve supported a women in agriculture training course and are designing new climate resilience and grasslands management projects with our partners. Our reciprocal Work and Holiday Maker visa is enabling young Mongolians to gain valuable experience and skills in areas of labor shortage in Australia, especially agriculture.
In the area of governance and democracy, we’re working on strengthening human rights and supporting Mongolia’s vibrant civil society. We have an enduring partnership with the National Human Rights Commission of Mongolia. For example, we recently supported a fellowship with the Commission and seven organizations to visit Australia in partnership with Flinders University on Human Rights in the Digital Age.
Mongolia has much to share on its strong track record of protecting its democratic and human rights values. I believe this, coupled with an open market economy, economic reform, and tackling corruption, will enable Mongolia to thrive in the years ahead.
Given Mongolia’s energy dependency on its neighbors, the government of Mongolia has made efforts to diversify energy sources. What are some of the ways Australia is cooperating with Mongolia to improve the country’s energy sector?
As the world moves toward decarbonizing their economies and a clean energy transition, it is expected to drive an exponential growth in demand for resources. Without the critical minerals – without the iron ore, without the copper – to process all these materials, there is no net zero. And we want Mongolia to be part of this.
Australia is proud to play a strong role in developing the sector. Many Australian companies are already here, exploring and developing Mongolia’s mines but also contributing to Mongolia’s human capability – by bringing innovative technologies, developing skills, providing digital solutions and the latest technology to the sector. It is pleasing to see several Australian companies progressing in their exploration in coal bed methane and green hydrogen in partnership with Mongolian entities. There is great potential in Mongolia for these alternative energy sources for domestic use and for export.
Australia has made a commitment to reduce emissions by 43 percent by 2030 and reach net zero by 2050. Alongside this, we have committed to achieving 82 percent of Australia’s energy production from renewables by 2030.
The Australian government is investing to upgrade, expand, and modernize Australia’s energy system to unlock greater penetration of renewable energy and accelerate the decarbonisation of the grid. It wants Australia to become a renewable energy superpower, with cheap renewable energy underpinning new, internationally competitive, and clean industries, including renewable hydrogen.
The Australian government has announced a Future Made in Australia agenda to maximize the opportunities of the net zero transformation. The government is investing AU$22.7 billion over the next decade to maximize the economic and industrial benefits of the move to net zero and secure Australia’s place in a changing global economic and strategic landscape. We are encouraging and facilitating private sector investment to make the most of this opportunity as we transition to net zero, while standing by our commitment to the rules that govern international trade and working closely with partners.
But a future made in Australia is, of course, not a future made alone. Australia is already a trusted energy supplier and has an abundance of sunshine, wind, and critical minerals – which, while positioning us to well to support our own decarbonization, also means we can help our neighbors with their net zero journeys. Future Made in Australia focuses on sectors where Australia can build a comparative advantage and make a significant contribution, such as renewable hydrogen, green metals, low-carbon liquid fuels, and critical minerals processing.
Australia wants to work with international partners – including Mongolia – to build the trade and investment partnerships needed to realize this ambitious agenda. Australia is keen to share its experiences and lessons learnt with Mongolia as we continue our net zero journeys, which will no doubt bring more opportunities for further cooperation and investment.