Mongolia is about the same size as Alaska, which is large, but Mongolia is sandwiched between two much larger countries, Russia and China. Mongolia’s territorial reach is determined by these two neighboring countries. The northern part of Mongolia is steppe land, which was the traditional place for herding. Much of the south is desert. During the centuries before the rise of Russia and then during the Soviet years, territory north of Mongolia was cold and less and less useful as you moved north. So Mongolia was interested in expanding its territory by driving south.
Today that history has its legacy in China where the other part of Mongolia, Inner Mongolia, is located. Of course the great wall of China was originally built to keep the Mongolian invaders from the north out. It was the Mongolians who used saddles with stirrups. By using stirrups a rider can remain steady on the horse’s back and shoot arrows from a level foundation. The great Mongolian expansion by westward conquest across the steepe land all the way to western Europe in the 13th century largely rested on the military advantages of horses, saddles and stirrups.
The Long Lost Empire
After the 14th century the greater Mongolian empire dissolved. In the 15th century China (the Ming dynasty) drove the Mongols out of Beijing and removed them from leadership. The Mongolians who remained in the territory South of the Gobi desert were eventually captured by the Chinese Manchu dynasty in the late 17th century. By this time Russia was pressing in on Mongolia and the modern dynamic of Russia and China sandwiching Mongolia from the north and south came into place. China continues to hold Inner Mongolia, although the people are of Mongolian ethnic and cultural practice.
During the Soviet decades Mongolia was made into a mining territory, although officially as an independent Republic. Mongolia is rich with gold, copper, coal, molybdenum, fluorspar, tin, tungsten, phosphates, nickel, zinc, silver and oil. After 1924 the traditional nomadic herding way of life was discouraged and replaced by collectivized farming. Soviet policies also led to urbanization not just for settled farming but also for the introduction of industry and the exploitation of mineral resources. Starting from an agricultural and nomadic herding culture Mongolia struggled to establish a diversified economy and was forced to rely on Soviet financial aid. When the Soviet Union collapsed in 1991 all that aid immediately stopped.
The Central Asian environment is harsh for most of the year. Located in the heart of Asia, remote from any moderating body of water, Mongolia has little precipitation. Consequently there are dust storms, grassland and forest fires, drought, and “zud,” which means harsh winter conditions. On top of the severity of the natural conditions, policies of the former Communist regimes had negative effects on the environment. Burning of soft coal in power plants and lack of enforcement of environmental laws severely polluted the air in some places. Deforestation, overgrazing, and converting of virgin land to agricultural production increased soil erosion from wind and rain. Desertification and mining activities also damaged the environment.
Once the Soviets were gone, Mongolia was forced to rebuild its economy around exporting. About 90 percent of the minerals, apparel, livestock, animal products, cashmere, wool, hides and crude oil that Mongolia exports go to China. And over 63 percent of the imports Mongolia needs come from either China or Russia, so Mongolia’s territory remains heavily enmeshed and influenced by its two immediate neighbors.
On The High Seas
There are territorial policies, however, that reach beyond Mongolia’s immediate, landlocked circumstances. Although Mongolia has no Navy and, of course, no ocean coastline, the country does have a listed merchant marine fleet. In 2003 Mongolia opened a Ship Registry, which is an international service that offers competitive fees and no restrictions on the ownership of any ship. The Registry earns Mongolia fees while allowing ship owners a new flag of convenience to disguise their true origins. In 2010 there were as many as 77 ships flying a Mongolian flag on the oceans of the world. Currently (as of January 2014) there are 57 ships registered under the Mongolian flag.
Shipping companies that fly Mongolia’s flag of convenience enjoy tax breaks and reduced tariffs and the registration fee is about 10 percent below other maritime registries. Mongolia’s registry operations is headquartered in Ulan Bator, Mongolia, but the actual registries on the ships are handled by the Singapore-based classification company, Sovereign Ventures. According to the head of Mongolia’s registry the ultimate goal is to open a duty-free area in the eastern Chinese port of Tianjin, which is about 600 miles from Mongolia’s borders.
As Mongolia’s registry efforts continue to expand and they learn maritime methods their new found skills could allow resource-rich Mongolia to send its coal copper and other minerals to markets around the globe on their own vessels, or at least on vessels registered under their flag. It could also allow Mongolia to import oil from overseas rather than depend on Russia for these needs.
When you look at Mongolia’s international treaties, you find that in 2005 Mongolia signed a Treaty of Amity and Cooperation in Southeast Asia. Southeast Asia is where a huge amount of east-west shipping occurs, especially through the Straights of Malacca. Odd as it seems, Mongolia’s maritime strategy would benefit from these ongoing long-established territorial relationships. Mongolia is a landlocked country with maritime territorial aspirations. Offering maritime registry may lead to shipping access, but in the meantime Mongolia’s flag is flying on ships all over the world with little scrutiny. Flags of convenience are a way of hiding ownership and clouding maritime transparency. The FOC system and the layers of corporate ownership and front companies that accompany it, provide a veil of anonymity for criminals and terrorists. The flag of convenience system is also one of the primary ways oil companies avoid paying taxes by hiding the actual location of crude oil production and refining. So Mongolia may be arranging territorial access for shipping but it is also entering into questionable international shipping operations.