R 040931Z SEP 09
FM AMEMBASSY ULAANBAATAR
TO SECSTATE WASHDC 3016
INFO AMEMBASSY BEIJING 
AMEMBASSY CANBERRA 
AMEMBASSY MOSCOW 
AMEMBASSY OTTAWA 
AMEMBASSY SEOUL 
AMEMBASSY TOKYO 
AMCONSUL GUANGZHOU 
AMCONSUL SHENYANG 
NSC WASHINGTON DC
MILLENNIUM CHALLENGE CORP WASHINGTON DC
SECDEF WASHINGTON DC
DEPT OF COMMERCE WASHINGTON DC
USMISSION USUN NEW YORK 
DEPT OF ENERGY WASHINGTON DC
DEPT OF TREASURY WASHINGTON DC

C O N F I D E N T I A L ULAANBAATAR 000258 
 
 
STATE FOR EAP/CM 
NSC FOR EVAN MEDEIVOS 
 
E.O. 12958: DECL: 09/03/2034 
TAGS: PGOV PREL ECON EAID ENRG MG
SUBJECT: AMBASSADOR DISCUSSES BILATERAL AGENDA WITH 
MONGOLIA'S PRESIDENT AND FM 
 
Classified By: AMBASSADOR MARK C. MINTON FOR REASONS 1.4 (B) AND (D) 
 
¶1. (C) SUMMARY.  In a series of pre-departure encounters over 
the past week, Ambassador Minton discussed a wide range of 
U.S.-Mongolia bilateral issues with President Elbegdorj and 
Foreign Minister Batbold.  Ambassador Minton and DCM Hill 
spent nearly all of Saturday, August 30, with Elbegdorj and 
his Foreign Policy Advisor (and Ambassador-designate to 
China) Sukhbaatar, and also hosted Elbegdorj for lunch on 
September 3.  In addition, the Ambassador hosted FM Batbold 
and Americas Desk staff for lunch on September 1. 
 
¶2. (C) During all three discussions, the key topics were 
foreign trade and investment, enhancing educational 
exchanges, the Millennium Challenge Compact, and continued 
defense cooperation.  These priorities appear highly 
consistent with Washington reporting on messaging from 
Mongolian Ambassador to the U.S. Bekhbat in recent meetings, 
indicating broad GOM agreement on the most pressing current 
issues and a commitment to enhancing further our joint 
agenda.  END SUMMARY. 
 
TRADE, INVESTMENT, AND THE THIRD NEIGHBOR POLICY 
--------------------------------------------- --- 
 
¶3. (C) Elbegdorj and Batbold highlighted the importance of 
balance in the trade relationship.  Central to Mongolia's 
"Third Neighbor" policy, they both acknowledged the 
importance of having many countries represented in 
Mongolia's economy to balance pressure from Russia and 
China.  Elbegdorj stated that the "Third Neighbor Policy 
should have an economic dimension," and that "We need 
strategic support from the U.S. when dealing with all of 
these parties; we need America to balance power in this 
region."  He noted specifically that Russian President 
Medvedev's visit to Ulaanbaatar two weeks ago included an 
entourage of roughly 160 officials, of which about 100 
focused on economic and commercial business.  Similar 
commercial pressure is expected when Chinese PM Wen visits in 
October. 
 
¶4. (C) Elbegdorj would like to see more aggressive high-level 
engagement from the U.S., through meetings in Washington and 
visits to Mongolia.  Two Congressional delegations this 
summer were a very good step in our relationship, and 
demonstrated growing high-level interest in Mongolia.  He 
also hopes to make a summit visit to Washington if not in the 
spring, then within "a year" and would like to invite the 
President, Vice President, and Secretary to visit Mongolia. 
 
¶5. (C) Batbold also discussed the Third Neighbor Policy in 
the context of trade and investment, noting that Mongolia,s 
commitment to balance is evident in the continuing debate 
over Oyu Tolgoi, the huge copper and gold deposit to be 
developed by Rio Tinto in the Gobi.  He said that Mongolia 
could have received much more favorable advance payments and 
ownership terms from China, but realized that it was more 
important to ensure that Western firms operate major projects 
in Mongolia.  In his meeting, Elbegdorj noted that, with Oyu 
Tolgoi moving forward, development of the huge Tavan Tolgoi 
coal deposit in the Gobi is next.  He hopes Peabody can make 
a strong case for participation to provide again American 
balance.  He said that, once launched, the Oyu Tolgoi copper 
and gold mine could bring in nearly USD one billion almost 
immediately, but he is not sure the system is prepared to 
"digest" that quickly.  He noted that much reform is needed 
to make the system "less bureaucratic and more transparent." 
 
¶6. (C) The Ambassador commented that, in the case of Tavan 
Tolgoi, the government might be better served not by thinking 
about how to split up the pie among strategic partners, but 
rather about the key principles by which it wants the mines 
to be operated (best technology, environmental soundness, 
etc.).  Keeping the discussions and negotiations on these 
points of principle would allow the government to avoid 
describing decisions as politically-determined. 
 
¶7. (C) The Ambassador explained that we had tried, for 
example, to use an appeal to principle to defuse political 
problems with Russia and China associated with U.S. defense 
cooperation in Mongolia.  By ensuring all parties understand 
that our cooperation is focused solely on building global 
peacekeeping capacity, the two neighbors are essentially 
prevented from arguing that we are trying unduly to influence 
the country,s military counter to Russian and Chinese 
interests. 
 
HOPE FOR BALANCE EXTENDS TO URANIUM 
----------------------------------- 
 
¶8. (C) Batbold raised the difficult question of uranium.  He 
said that, despite recent announcements of partnerships with 
Russia, Mongolia is very much committed to balance in this 
sector as well.  The GOM is in active talks with several 
countries regarding the development of the sector, both mine 
production and power generation.  Uranium was an important 
topic during PM Bayar,s visit to Tokyo in July.  Japan is 
particularly interested, but so too are France and India. 
Uranium and nuclear power are expected to be a major 
discussion topic during President Elbegdorj,s first overseas 
trip, to India, from September 13 to 16. 
 
EDUCATIONAL EXCHANGES 
--------------------- 
 
¶9. (SBU) In both meetings with the Ambassador, President 
Elbegdorj devoted considerable time to discussing expanding 
exchanges, in particular scholarships for Mongolians to study 
in the U.S.  The Harvard-educated president was pleased to 
learn that the U.S. is nominating six Mongolians for 
Fulbright scholarships this year, and hopes for continued 
growth.  Foreign Minister Batbold indicated that the GOM is 
still considering action on the proposed joint funding of 
Fulbright and other programs.  Batbold added that both Russia 
and China fully fund several hundred scholarships each year 
for Mongolians, and it is important to balance that with 
educational opportunities in the West.  In doing so, he noted 
that Mongolia still relies heavily on 
government-to-government partnerships to promote these kinds 
of opportunities for its youth. 
 
¶10. (SBU) The Ambassador added that beyond 
government-to-government options, there are many ways to 
engage the private educational sector as well.  For example, 
both the Embassy and GOM can work to encourage Mongolian 
alumni of U.S. universities to reach out to their alma maters 
for support, develop university-to-university partnerships 
that include an exchange element, promote Mongolian studies 
in the U.S., and encourage U.S. businesses to support 
education of Mongolians in the U.S.  Since the U.S. 
educational system is decentralized, much work would have to 
occur at the state level, with states such as Alaska already 
showing leadership in this area. 
 
¶11. (SBU) COMMENT: Post,s Public Affairs Section (PAS) is 
actively working on these options already, and will shortly 
add a new Alumni Coordinator to our staff as a contractor, 
funded by the State,s Bureau of Education and Cultural 
Affairs, Office of Alumni Programs.  Through grants, PAS 
also supports a non-profit Education Advising Resource 
Center, which is planning new activities to reach out to a 
wider range of Mongolians.  Elbegdorj,s Human Rights 
Advisor, Ms. Oyungerel, was also at the lunch and noted that, 
as a Stanford graduate, she is active in the private 
association U.S. Alumni in Mongolia (USAM).  She expressed an 
interest in working with Post to generate activities with 
USAM to reach out to U.S. universities as the Ambassador 
suggested.  END COMMENT. 
 
MCC 
--- 
 
¶12. (SBU) Both Elbegdorj and Batbold expressed strong 
interest in moving ahead with re-programmed MCC funds. 
Elbegdorj noted specifically that a strong MCC is important 
to demonstrate to the public the importance of the 
U.S.-Mongolia relationship, and that MCC should be seen as an 
"American footprint in Mongolia."  The Ambassador explained 
that we hope for some answers following the September 9 MCC 
Board meeting, particularly in expanding the property rights, 
vocational education, and health projects.  Funding for new 
projects using money originally dedicated to the old rail 
project, however, may take slightly longer to decide. 
 
DEFENSE AND OTHER ISSUES 
------------------------ 
 
¶13. (SBU) The Ambassador discussed U.S. defense cooperation 
with both Elbegdorj and Batbold.  Both leaders acknowledged 
the importance of this aspect of our bilateral relationship. 
They expressed a continued commitment to Mongolia,s growing 
role in global peacekeeping operations. 
 
 
MINTON