UK-Mongolian Relations

Wednesday 12th July 2023 Westminster Hall

09:40

[James Gray (in the Chair)]

May I announce a rather unusual change to normal procedure? I intend to take part in the debate, but I am also a member of the Speaker’s Panel of Chairmen, and it has been agreed by all parties that in the absence of the regular Chairman, I shall chair the debate until Sir Roger Gale comes to relieve me, which should be in a few minutes. I hope that that is acceptable to the House.

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

I beg to move,

That this House has considered UK-Mongolian relations.

It is a pleasure to serve under your chairmanship, Mr Gray, during this important debate on Anglo-Mongolian relations. It was a tremendous privilege for me to be appointed as the Prime Minister’s trade envoy to Mongolia some two and a half years ago. I come from an exports background: before becoming a Member of Parliament, I spent my formative career after university in exports, and I fundamentally believe that the future prosperity of our nation is predicated on our ability to have the same strength in exports that we have in our indigenous economy. The UK is the fifth largest economy in the world, but not the fifth largest exporter. We have a target of £1 trillion of exports by 2030, and the role that the trade envoys play in promoting British exports is very important.

In January, we celebrated the 60th anniversary of our bilateral diplomatic relations with Mongolia, and 60 is an important number for Mongolians, so they held a large reception at the Dorchester hotel. I was pleased to speak at the event, together with the Deputy Prime Minister of Mongolia, to highlight the fact that the UK was the first European country formally to recognise Mongolia as an independent sovereign nation.

During my visits to Mongolia, the country’s geopolitical significance has become ingrained in my thinking. There are tremendous opportunities for bilateral co-operation, which I shall set out in the debate, but before outlining our goals and aspirations in Mongolia and the far east, let me describe the wasted decades of our obsession with the European Union.

Post Suez, we lost confidence as a nation. Suez was such a jolt for us—this is a subject I have studied extensively—that our mindset as a nation changed. We went through a period of economic and political malaise. Certainly, I believe, we went through a period of significant retrenchment, and we pulled away from many of our commercial and military interests in the far east. It was the Prime Minister of Singapore, Lee Kuan Yew—as you will remember, Mr Gray—who remonstrated with us for pulling away from our bases there. We tended to focus purely on our own continent and the European Economic Community. At that time, civil servants and others peddled the narrative, “The empire has gone. We are too small to navigate the world stage, and we need the crutch of the EEC.”

There then ensued decades of political, economic and constitutional enslavement to the process of the supranational state. We watched the constant EU summits and the constant debates in which people tried to thrash into one policy the views and aspirations of 28 countries. We left the EU and, despite all the bullying from Brussels, we have kept our course to freedom and independence.

This Government have achieved two extraordinarily important goals during their tenure of office: entry into the comprehensive and progressive agreement for trans-Pacific partnership, the world’s largest and fastest-growing trading bloc; and membership of AUKUS, the new naval agreement between Britain, Australia and America. If protected, those two extraordinary achievements will have a profound impact not only on the British economy, but on world security and peace. The CPTPP is the world’s largest trading bloc and contains some of the fastest-growing countries in the world, including Japan, South Korea, Australia, New Zealand, Singapore and Vietnam—in fact, the whole of the far east. Those countries are growing extraordinarily. The United Kingdom is the only European country that has been invited to join, and my understanding is that we will be signing the treaties to enter this month or next month—

[The Minister of State, Foreign, Commonwealth and Development Office (Anne-Marie Trevelyan)]

Sunday.

[Daniel Kawczynski]

Sunday, in fact. The CPTPP involves no interference in our domestic affairs or our judicial processes, and no membership fees of £200 million a week—just pure trading. It is so exciting for the British people to enter a market that is growing at a phenomenal rate.

The second achievement, AUKUS—the new naval agreement with America and Australia—gives us the opportunity with our allies to re-enter the Indian and Pacific oceans in a meaningful way, for the first time in my lifetime. The British media’s obsession with scandal and petty domestic issues is of great regret to me, because it does not focus on the extraordinary achievements of the CPTPP and AUKUS. When we go to the Dog and Duck in our constituencies, how many people come up to us and talk to us about AUKUS or the CPTPP? Nobody comes to talk to me about those things in my surgery or the local pub, and yet I feel passionately about them because they signal a huge pivot for Britain away from this obsession with our inconsequential continent, which is shrinking every day as a percentage of global population and GDP, and instead towards the far east, where the real growth is, not just for ourselves but for future generations of British businesspeople and entrepreneurs.

We now have a Mongolian intern in my office on a three-month secondment: Lomax Amarsaikhan, who studied at the University of Bristol. He is writing a report about British entry into the CPTPP and whether Mongolia ought to emulate us. I would like to ask you, Mr Gray, and others participating in the debate who have experience of how Britain signed membership of that very important organisation, and the logistics and wherewithal of our experience of entering the CPTPP, to contact Lomax. He will spend the next two months with me, writing that report in Mongolian and English. It will be presented to the Mongolian Parliament, so that we can share with the Mongolians our experience of entering this huge new bloc and encourage them to consider whether it would be suitable for them to follow us.

[Sir Roger Gale in the Chair]

There are 195 countries in the world, yet only one has no coastline, with the Russians to the north and the Chinese to the south: Mongolia. What an extraordinary situation. More than any other countries in the world, Russia and China use brutality to oppress and subjugate their neighbours. They bully their neighbours and steal territory without remorse. That is quite extraordinary, given their status as permanent members of the UN Security Council. One would think that the five countries with the extraordinary privilege of being permanent members of the UN Security Council would be at the forefront of trying to uphold an international rules-based order predicated on the rule of law, democracy, human rights and all the other attributes of modern democratic societies and modern international relations that we feel so strongly about. Yet the Russians and the Chinese are doing the exact opposite: contravening the rules and regulations of the UN, the European Court of Justice and the International Court of Justice and trying to manipulate and threaten their neighbours.

Mongolia is a beacon of hope and democracy in that region. So many countries in that region—Russia, China, Burma—are oppressing their people. The reason I am so excited about Mongolia and feel so strongly about that nation is that despite its being subjugated by the Soviet Union as a satellite state and spending decades under a brutal, oppressive communist regime, whenever I go there I see the thirst and determination to grasp and nourish democracy and try to create a genuine democratic society in which there is rule of law and freedom of the press, and in which people can criticise politicians and get rid of them at elections.

We must support countries such as Mongolia, despite all the provocations from some neighbours and their past difficulties. We must support them economically and from a security perspective. For me, China is the biggest threat. I started to ask questions about China’s conduct in the South China sea seven years ago, of the then Foreign Secretary, Mr Hammond. I asked what the British Government’s attitude was to the Chinese seizure of hundreds of atolls in the South China sea—stealing them from Brunei, Philippines, Vietnam, Malaysia and others and militarising the whole of the South China sea, a waterway through which 60% of the world’s trade passes.

The response from the Foreign Secretary and the Foreign Office, which is indelibly imprinted on my mind, was that they do not take a view on the dispute of uninhabited atolls in the South China sea. I very much regret that answer, because I feel that the militarisation of the South China sea and our turning a blind eye to the Chinese stealing hundreds of atolls, pouring concrete on them and militarising the area are the thin end of the wedge. They give the communists succour and the ability to know that they can continue to push the boundaries in their expansionist policies in the region.

It is not just the South China sea. We all know the situation with Taiwan and the difficulties that the Taiwanese Government are experiencing. We know that the Chinese have trashed the agreement over Hong Kong that they signed with Margaret Thatcher in December 1984. We had a debate in the House the other day about the subjugation of democracy rights activists in Hong Kong. We know the allegations regarding the brutal suppression of the Uyghurs and, of course, the situation in Tibet.

Two gentlemen, Mr Cameron and Mr Osborne, made the biggest mistake in their determination to cosy up to the Chinese, because of the dollar, the huge power of the Chinese and their ability to invest money and provide big markets. We are rightly critical of other countries because of their human rights abuses, but we have turned a blind eye to the Chinese and their conduct. The mistake made by Mr Cameron and Mr Osborne was profound. I hope that this Government and subsequent Governments will be more adroit and more courageous in ensuring that we start to divest ourselves of our extraordinary overdependence on imports from China.

When I asked the former Secretary of State for Trade and Industry how we were going to become less dependent on China, she said one word: CPTPP. By entering the CPTPP, we enter a market in which 99% of goods will be traded tariff-free. What is it that we currently import from the Chinese that we cannot import from the Koreans, Japanese, Vietnamese, Singaporeans, Malaysians and others? That is the message that I want to get across to the Minister. I want us to use our entry into the CPTPP to encourage countries such as Mongolia to join us—fellow democracies like Mongolia and people who believe in the things that we do—in the new trading bloc. I want us to use our position to try to restrict Chinese entry into the CPTPP unless China starts to behave in a different way towards its indigenous population and its neighbours.

When I visited Mongolia, I was taken to the Gobi desert to inspect the Rio Tinto copper mine. Rio Tinto, based up the road in St James’s Square, is a major Anglo-Australian mining company. I spent the afternoon inspecting the world’s third largest copper mine in the world, the Oyu Tolgoi Rio Tinto mine in the Gobi desert. I was taken 1.5 km underground and spent the afternoon inspecting the honeycomb labyrinth of tunnels that make up the world’s third largest copper mine. It has an investment of over $15 billion and a massive impact on the Mongolian economy.

One thing I was particularly pleased to see was that 97% of all the mineworkers were Mongolian and that the mine had won major international environmental awards for the way that it mined and looked after the area in which it was mining. That has a hugely important economic benefit for Mongolia. I am proud and privileged to have played a small part in the negotiations between the Mongolian Government and Rio Tinto in reassessing and modernising the agreement so that it is now a win-win for both sides.

Let us not forget that only 7% of Mongolia has been explored. We already see vast opportunities in the mining sector, yet only 7% of this jurisdiction has been explored. The Mongolians are mining the copper and it is going straight across the border to the Chinese in its lowest-value form. It goes in huge railway compartments across the border to China, which, as the Minister knows, is so thirsty for all minerals. It seems to devour all these things so quickly.

I say publicly to the Minister that the way to compete against the Chinese in Mongolia is by demonstrating to our Mongolian friends and partners that we want a genuine win-win partnership rather than the exploitative type of approach that they have experienced in the past. I am talking to UK Export Finance about the possibility of trying to bring British technology and expertise in copper smelting and refining. What better way to send a signal to the Mongolians that we are interested in increasing their economy, bringing added value to their output and giving them the power of having that processing industry in their own country, not just for Rio Tinto but for many other mining jurisdictions across the country?

We have the opportunity to say to the Mongolians, “We are going to work with you. We are going to bring in this technology and, potentially, we are going to finance it.” I have £2 billion burning a hole in my pocket at the moment. I do not often say that, but that is what I have generously been given by the Minister’s Department and UK Export Finance for cheap soft credit loans to facilitate British entities operating in and exporting to Mongolia. The solution need only have a minimum of 20% British content, but it is a huge opportunity for us. I pay tribute to UK Export Finance, in front of the Minister.

My interactions with Mr Tim Reid, the chief executive of UK Export Finance, have been tremendous. He and his team are very agile and adept at meeting and trying to work productively and effectively with us trade envoys to provide additional resource and opportunities for us to promote British exports with those additional soft loans and credit, which are extremely important. Can I please ask the Minister to take an interest as I progress with others in trying to bring British expertise into the Mongolian copper refinery industry? I will keep her up to date on my meetings with the chief executive of UK Export Finance, to let her know the progress on what I consider to be probably the single most important economic solution on which we can work together with the Mongolians to bring value-added processing to their copper industry.

The second issue is the capital, Ulaanbaatar. It is a beautiful city, which I have had the honour of visiting on four separate occasions. Mongolia is a huge jurisdiction with massive opportunities but a tiny population of only 3 million. I think it is going to be the next United Arab Emirates, Kuwait or Qatar within our children’s lifetime, not from oil but from minerals. Such is the wealth of the country, and so small is its population, that there is a genuine opportunity to create huge prosperity.

I look forward to the Minister’s visit to Ulaanbaatar, which she has promised to make at some stage; as she will see, it is one of the most congested cities in the world. Unfortunately, the Mongolians have one of the highest cancer rates in the world as a result of the extraordinary pollution in that city. I have been warned not to go in January and February, not only because it is about minus 40°C, but because of the huge amount of pollution in the city as a result of the congestion.

The Mongolians have asked us to look at working with them to build a ring road around Ulaanbaatar—not quite an M25, but a ring road. That is their most important strategic project, because they can see that their capital city is slowly being choked off. It is expanding extremely quickly and cannot cope with the level of congestion, which is causing them a significant problem. I say to those watching on television who have expertise in the construction, architecture or design of such arteries, or in any aspect of construction, please contact my office. As we continue to engage with the Mongolians, we would be very interested in providing them with the maximum number of British solutions possible, and that project could be financed by UK Export Finance.

I move on to critical minerals. I have already spoken extensively of my concerns about China’s brutal communist regime. As one of the Tory MPs sanctioned by Russia, I have already been banned from entering that country. The Chinese have already threatened to ban me from China if I continue to express anti-Chinese sentiments in the House. Perhaps this will tip me over the edge. I would be proud to join other Tory MPs who have been sanctioned in that way by the Chinese and the Russians.

China controls 80% of the world’s rare earth minerals. I want people to remember that for a second—it is extraordinary. We went to war in ’56 in Suez because of our misunderstanding that Nasser would restrict the flow of oil. We were so profoundly concerned about our industry collapsing as a result of the restriction of that vital commodity that we went to war. It backfired on us spectacularly, but we are entering a period when critical minerals will have even more significance for our economy than oil did in the 1950s—I am absolutely convinced of that. When flying back to Heathrow across the North sea, we see the thousands of wind turbines that we are building. We have more offshore wind than any other country in Europe, yet not a single one of those turbines can operate without a magnet. That magnet is made from rare earth minerals.

How can we keep our wind turbines, cars and most of the economy and industry going in future without rare earth minerals? They will be hugely important and I am pleased that, as the Minister will know, we have a dedicated Minister for rare earth mineral strategy: the Minister for Industry and Economic Security, my hon. Friend the Member for Wealden (Ms Ghani). I am also talking to her about this issue.

When one country controls 80% of the world’s rare earth minerals, particularly a country as nefarious as China, we and future Governments need to start thinking about a strategy on becoming less dependent on the Chinese. At some stage in our lifetimes, they will threaten us by restricting access to rare earth minerals. I do not know when that will come—maybe over difficulties concerning Taiwan or difficulties with our freedom of navigation exercises in the South China sea; the only thing keeping that sea open is the implementation of those exercises by Britain and America. I do not know when the conflict will come, but I do know that, given the nature of the communist regime in China, it will attempt to restrict access to those vital minerals at some stage in the future.

We need to find alternatives, such as the mine in Mongolia that can potentially produce 10% of the world’s rare earth minerals. I have met representatives of the British company that owns the mine—they are based here in London—and I am very encouraged about the opportunities to exploit it, in collaboration with our Mongolian friends and allies, so that we can be less dependent on the Chinese.

The issue is not just about mining the rare earth minerals. We are bringing British processing industry to Mongolia to turn those minerals into magnets so that they can be air-freighted directly to Britain. That is the future. Relying on imports through China is no longer acceptable, whether from Kazakhstan or Mongolia. The next stage is for us to bring British processing industry to Mongolia. Again, that is a win-win situation for our Mongolian allies and ourselves, when it comes to turning the rare earth minerals into magnets. It is commercially viable, as the Minister will know, to air-freight magnets from a foreign jurisdiction directly to the United Kingdom, which would give us supplies of that vital commodity in the eventuality of difficulties or tension with the communist People’s Republic of China.

Before I finish, let me add a word about JCB, an extremely important British company based in Staffordshire, the county next to mine. No organisation or company better exemplifies the opportunities for British products in a country such as Mongolia. I visited the JCB dealership in Ulaanbaatar and met Gerry, the Mongolian gentleman who runs it with his wife and family. In the past eight years, the dealership has gone from 0% to over 25% market share for these sorts of machines in the mining industry in Mongolia.

I asked Gerry, “How do you do it? How do you compete against the machines from China? The Chinese just have a border to cross; we have to build these things in Staffordshire and get them across the world.” Gerry said it was about two things: the quality of the British goods and the after-sales service. We test these machines to destruction. The durability of the British products and the after-sales service are what differentiates British products from Chinese ones. That is what has given us such a competitive advantage over our Chinese competitors.

I was so impressed by Gerry and his team that on my last visit I invited the Mongolian Deputy Prime Minister to visit the dealership; I hope that the Minister visits it when she goes to Ulaanbaatar. Everything there is British-made—from the factory to the workshops and the areas where the goods are on display. There is even a golf driving range for customers that was built and designed by British architects and manufacturers. If we could bottle Gerry’s enthusiasm for selling British products, we would make a fortune. He is so proud of his partnership with the United Kingdom.

We need more political focus on Mongolia, and I have outlined to the Minister why Mongolia is so important. Earlier this year, I was in Kazakhstan as an election observer in Astana. While I was there, the Foreign Secretary visited Astana and signed some important agreements with this other extremely important democratic country. Kazakhstan is very similar to Mongolia: it has extraordinarily high levels of mineral production and is a post-Soviet satellite state, but it is a country that is inching its way towards democracy and the rule of law. I was impressed by what I saw as an election observer in Astana—genuine freedom of speech and freedom of the press. Mongolia and Kazakhstan, side by side, are the exciting democratic flowers that we need to water, nurture and bring into our rules-based order of democracy and freedom. They are two fascinating countries— Mongolia and Kazakhstan, side by side—and there is no greater contrast than that between them and Russia and China.

The other day, I briefed the Foreign Secretary about the need for him to visit Ulaanbaatar, and he promised that he would consider that. I hope that the Minister will take that away with her. She can see my motivation and genuine excitement about the country. Will she engage with the Foreign Office and the Prime Minister about the possibility of a state visit for the President of Mongolia, or the possibility of our own Prime Minister inviting the Mongolian Prime Minister to the United Kingdom?

Ulaanbaatar was flooded recently, and yesterday my Mongolian intern showed me a video of the destruction and devastation of Ulaanbaatar—some of the worst floods that the city has had for many years. I hope that when the Foreign, Commonwealth and Development Office looks at international aid, it looks a countries such as Mongolia. I want a team of British hydrologists and flooding experts at least to visit Mongolia and engage with the Mayor of Ulaanbaatar so that we can see how we can support our Mongolian friends and allies in dealing with what they perceive to be one of their biggest threats: their inability to control the flooding.

[Carolyn Harris in the Chair]

As the Minister will know from my Prime Minister’s questions, I always refer to the fact that my town, Shrewsbury, is flooded every year. We are working on a holistic solution to managing the River Severn and I chair the caucus of 42 MPs through whose constituencies the river flows. She will know the nightmare and devastation caused by a community’s flooding every year. That affects our friends in Ulaanbaatar, and I hope the Minister will take note.

When the Minister visits Mongolia, I will make sure she meets the only female governor in Mongolia’s 21 provinces, Bolormaa Enkhbat. She was chief of staff to the Mongolian Prime Minister and is now the country’s first and only female governor. She invited me to her province of Khovd, near Kazakhstan, which meant a three-and-a-half-hour flight from Ulaanbaatar. I was extremely impressed as she showed me around many opportunities for investment in her province. I very much hope the Minister will meet her.

Another thing I saw in the province, and which I hope the Minister will be able to see, is a hydroelectric power station built by the Chinese 10 years before my visit. I had never seen anything like it. I spent an afternoon walking around it and was blown away by the poor finish and poor quality. It is almost designed to fail—or disintegrate—at some stage. It would not pass muster here in the United Kingdom in a month of Sundays. If we are to compete against the Chinese on infrastructure projects such as that one, it is important we bring that expertise.

I want to pay tribute to Philip Malone, the outgoing British ambassador, who has had a career in the Foreign Office lasting more than 40 years. His first posting was in 1983 in Argentina, so we can imagine what a difficult slot that was. We did not have relations after the Falklands war and relations were done through the Swiss embassy. The professionalism and conduct of British ambassadors when one is overseas always gives one a tremendous pride in one’s own country. Our ambassadors—the men and women privileged to do that role—are the best, and Philip Malone has been exceptional. I also welcome the incoming British ambassador, Ms Fiona Blyth, who is the first female British ambassador to Mongolia. I had the honour of meeting her recently, and I wish her every success in future.

I pay tribute to my hon. Friend the Member for North Wiltshire (James Gray), the chairman of the all-party parliamentary group for Mongolia, who does a great deal in promoting bilateral relations. I also pay tribute to the former Labour MP John Grogan, who tells me he is busy campaigning in Selby today and who I think will stand in Keighley at the next general election. He does a tremendous job as chairman of the Mongolian British chamber of commerce. I also want to thank Kevin Ringham, the civil servant who runs the Prime Minister’s trade envoy programme.

Mrs Harris, you have been the third Chair today, so I cannot say it has been a great privilege to serve under your chairmanship only, as you have been there only part of the time. I hope the Minister realises how being trade envoy has given me a huge enthusiasm for Mongolia. It is a very important democratic partner for the United Kingdom and I look forward to her work and that of the Government in continuing to nurture relations with Ulaanbaatar.

10:19

[James Gray (North Wiltshire) (Con)]

I thank the Chairman of Ways and Means for kindly allowing me to take part in this debate after having opened it in the Chair. It is an unusual thing to have done, and I am glad to have set a new record.

I congratulate my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski), whose speech was wide-ranging, geopolitical and extremely interesting. He is a true master in the development of our relationship with Mongolia, and I thank him for the work that he does as our trade envoy. The way he has made a real presence in Mongolia, and a real presence for Mongolia here in London, is superb. The work he has done is outstanding. His speech today will go down in the history of UK-Mongolia relations as being extremely important in laying out the significance of our trade relations with Mongolia.

I hope the House will forgive me if I am a little more parochial than my hon. Friend and deal with the country of Mongolia rather than elsewhere in world—that is more my level. I want to let the House know that I am a bit of a fraud; the reason for my interest in Mongolia is that throughout my entire childhood my father used to threaten to send me there if I was naughty. I had no idea where Mongolia was; I thought it was somewhere extremely remote, very strange and unusual, and pretty awful. When I came to Parliament 27 years ago and had the opportunity to visit Mongolia, I thought I had better find out what it really was like. I am delighted to say that my late father could not have been more wrong in his description of what an awful place it was; I am delighted to have had my relations with Mongolia develop ever since.

Mongolia is a very interesting place. It is a huge country—something like 10 times the size of the United Kingdom. There are only 3 million people, more than half of whom live in Ulaanbaatar. There are a very small number of people, largely herdsmen, elsewhere across the country. They preserve their magnificent traditions, which stretch back to earliest times, encompassing Genghis Khan and the great Mongol empire in the 13th century—the largest empire the world has ever known.

Incidentally, the Mongol empire of Genghis Khan was largely dependent on the fact that he invented stirrups. For that reason, he was able to have his warriors charging with swords and bows and arrows and fighting from horseback, while the enemy could not. The same applied when the Saxons lost in 1066; they rode down to Hastings and then got off their horses—they did not have stirrups. Genghis Khan did have stirrups, and that accounts for the greatest empire the world has ever known.

It is important that Mongolia maintains those traditions. When one goes there, one stays in a ger—it is not a yurt, which is a Russian word. One must ride a Mongolian horse, as I have done many times. Although given my height, I can actually run along the ground as I ride because the horse is so small. It is quite an experience. One must buy some Mongolian traditional dress—people wear it to this day, particularly in the countryside, but also in Ulaanbaatar—and take part in all the magnificent and important cultural events there. It is a great way to remember the past.

The Mongol derby happens next week. My friend Philip Atkins is taking part in the 1,000-mile race across the steppes on Mongolian horses—what a magnificent way to commemorate the great postal runs across Mongolia. My best wishes to Philip for what lies ahead. I would not do it for all the tea in China—or in Mongolia, come to that—so well done to him for doing it. Those kinds of tradition, and the history and culture of Mongolia, are of huge significance.

One of the main reasons I am in love with Mongolia is that—as my hon. Friend the Member for Shrewsbury and Atcham mentioned—it is a little beacon of democracy. The little Parliament, the State Great Khural, operates in a region that is not at all friendly towards democracy. Mongolia is surrounded on one side by Russia, and on the other by China—both are hostile, and the Mongolians dislike both equally. The country is reliant on both to some degree, but is certainly not friendly to either, and for good reason.

There, in the middle of nowhere, Mongolia maintains proper democracy, based on our system in Westminster, which is to be encouraged. It is therefore important that we find ways of assisting Mongolia in the constitutional changes coming up—it is just about to change the way the Parliament is elected. We should assist it in every possible way to make those changes and to continue to develop that important democratic beacon in the middle of an anti-democratic desert.

With that in mind, I am very glad that I have often visited Mongolia with the Inter-Parliamentary Union. The IPU do great work in encouraging democracy in Mongolia. It is disappointing that we were not able to be there this year, which is the 60th anniversary of our recognition of Mongolia, but I hope we will be there soon none the less. The all-party parliamentary group for Mongolia might organise a trip, if we can find some funding to do that, and I hope the IPU might reconsider the decision not to visit this year and find time do so shortly. It is terribly important that we here, with 1,000 years of democracy in this building, make use of our knowledge and experience in countries such as Mongolia, which are desperately trying to hang on to democracy.

I join my hon. Friend in welcoming the new ambassador, Fiona Blyth, to her place in Mongolia. She is a great woman—I have met her many times—and she will do a superb job in representing Britain’s interests. I also thank the outgoing ambassador, Philip Malone, who did the job with great distinction indeed. We do wonderful work in supporting democracy in Mongolia and we must make sure that we continue to do so.

In passing, may I refer to the all-party parliamentary group, which is very active in this place? We see a lot of Mongolians coming through Parliament, and I am most grateful to a member of my office staff, Oscar Harrison, who runs the group for me. He does a first-class job. This is an important APPG. This Parliament has far too many APPGs, and I only run those that are very active and do things. The Mongolia APPG does a great deal, and I am most grateful for it.

In my 25 years of visiting Mongolia, I am delighted to say that I have seen huge changes. I remember going there shortly after the Soviets had withdrawn. Ulaanbaatar, or UB, was a pretty rundown little Soviet-type place with one major hotel, which had one thing on the menu, namely mutton. If guests did not like mutton, they did not get anything to eat.

All those years ago, Mongolia was a pretty rundown ex-Soviet country, but the changes I have seen since then are extraordinary. UB has doubled in size—with some environmental consequences, as my hon. Friend mentioned—and some worthwhile modern technologies and industries are developing there, particularly with regard to the Oyu Tolgoi mine and other mining and mineral interests.

I have also been glad to see the cashmere industry develop over the years. Some 30 years ago, the Gobi Cashmere factory in Mongolia was extremely basic and grey cardigans were all that was available. Today, the cashmere industry is fairly modern and widely advertised, and the industry exports to the UK, which I am glad about, although more could be done. I think I am right in saying that the company is still owned by the state, and if it were privatised it might become even better. None the less, some of those new industries—

[Daniel Kawczynski]

Will my hon. Friend give way on that point?

[James Gray]

I do not have much time. My hon. Friend spoke for 45 minutes—[Interruption.] Let us not bother with that for now. I hope we will see Gobi developing further in the years to come.

We in this country have an enormous amount to contribute to Mongolia. I have already mentioned democracy and the free-market economy, both of which we can lead on for Mongolia and the rest of the world, and we can contribute a huge amount with regard to commerce and industry, as my hon. Friend has described. I am glad that there is, for example, a big relationship between the London stock exchange and the Mongolian stock exchange, and the Mongolian stock exchange can learn an awful lot from us.

In a variety of other economic and trade aspects, we are developing our relationship with Mongolia, and we can also do a lot with regard to education and science. English is now the second language of Mongolia, which I am glad about, and we can do a huge amount to promote industry, science and education there. I am pleased that there is also a defence relationship with Mongolia, and 6,000 Mongolian troops served in Afghanistan alongside us. Those troops made a useful contribution to the defence of the world.

Mongolia is no longer the outer extremity of the world, which is how my father described it to me all those years ago. It has a great distance to go before it becomes a fully integrated, fully modern and fully democratic nation state. We all want that to happen, but the changes I have seen in 25 years of going to Mongolia are quite extraordinary and very worth while.

I send the Mongolians every good wish, and I hope Mongolia keeps on its steady track of movement towards democracy and a free-market economy. I hope Mongolia maintains its fine old traditions as it does that. We must remember the country’s culture, language and education. If it continues in such a way, people in 60 years will be able to look back from the 120th anniversary of our recognition of the country and be proud of the contribution Britain has made to Mongolia.

10:29

[Ms Anum Qaisar (Airdrie and Shotts) (SNP)]

It is a pleasure to serve under your chairwomanship, Mrs Harris. I thank the hon. Member for North Wiltshire (James Gray) for stepping in as temporary Chair to ensure that the debate could occur. I congratulate the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) on securing this important debate. I understand that he is a passionate advocate for UK-Mongolian relations, as was evidenced by the time he took to speak.

This debate comes as Mongolia marks 60 years of diplomatic relations with the UK. Trade between the UK and Mongolia has dropped by as much as 58% over the past three years, from a total value of more than £0.5 billion in 2020. The Mongolian economy continues to rapidly grow, presenting new opportunities in sectors such as energy, education and agriculture for companies across these four nations. I would welcome further details from the Minister on the UK Government’s plans to increase UK exports, and specifically Scottish goods, to the Mongolian market.

In terms of energy, trade with Mongolia presents Scotland with a unique opportunity. Scotland, of course, has vast expertise in the renewable energy sector, in areas such as wind and hydropower, and it is important that closer links are developed between Scottish companies and their Mongolian counterparts to build on that expertise. In order to better promote Scottish businesses and harness that expertise, it is important that Scottish Government officials are invited to future UK-Mongolian trade meetings. Will the Minister commit to that today?

When last asked in February 2022, as I understand, the UK Government stated that the Department for International Trade had a team of four focused on promoting UK exports to Mongolia and reducing barriers to trade. Given the drop in exports and the increased budget allocated to promotion of UK trade, I would be grateful if the Minister confirmed whether that number will rise.

The UK Government should look to work alongside the Scottish Government to host trade exhibitions to promote Scottish goods and industry. That is especially important given that whisky and other food and drink products do not feature on Mongolia’s list of top 10 imported goods from the UK. It would provide an opportunity to promote a vital sector of the Scottish economy and culture, but it must be done in a way that ensures local sensitivities around alcohol consumption are respected.

We must ensure that environmental policies remain at the centre of any bilateral discussions. Given the centrality of the mining of critical minerals to the Mongolian economy and the role that UK companies play in harnessing these resources, it is vital that we ensure the correct environmental protections are implemented. It is particularly concerning to hear that some environmental groups have faced issues. Amnesty International has expressed its concerns over the erosion of civil liberties, designed to prevent opposition to mining operations across Mongolia.

In May 2022, the Mongolian Government introduced a Bill to amend the criminal code, creating prison sentences for obstructing mining and other development projects. The draft law would restrict legitimate non-governmental organisation activity, prohibit legitimate activities and limit NGO funding. I wish to put on record the SNP’s support for freedom of association and assembly. NGOs play a vital part in our battle against climate change. Although the Mongolian Government have signalled that they are amending the Bill, we wish to see UK-Mongolian diplomatic engagement reiterate our opposition to the provisions in that legislation, and any subsequent legislation, if it is deemed necessary, must not water down the right to protest.

Indigenous herding communities are bearing the brunt of the impact of increased mining activities. Coal and other mining operations in the Gobi region of Mongolia have destroyed grasslands, contaminated groundwater and depleted other water resources. Those actions are displacing indigenous communities, around 28% of whom—about 600,000 people—have moved from rural communities to the capital. Those who have been displaced face issues including not receiving compensation from the mining operations, and experience the health problems associated with living in temporary accommodation. Those left living in rural communities face health issues caused by the mining activities, on top of the economic damage caused by the destruction of land that was previously used for grazing.

Like all countries across the globe, Mongolia is impacted by changes to the climate, but because more than 30% of the country is desert, it is particularly badly hit by rising temperatures. That will likely force more climate refugees to move to the capital from rural areas, so it is in all our interest to tackle climate change effectively. I hope Mongolia will continue to build on the success of COP26 in Glasgow, and will push to meet its commitments to reduce greenhouse gas emissions. At the conference, the President of Mongolia committed to the planting of 1 billion trees by 2030 as part of a bid to reforest areas of Mongolia, tackle desertification and create a carbon sink. I hope the UK Government will assist Mongolia in its efforts to tackle climate change, and I hope the Minister will refer to that in her remarks.

This debate has highlighted the need for improved links with Mongolia, which would of course present opportunities for Scottish businesses to expand into new markets and capitalise on Scottish expertise in green energy. That is incredibly exciting. I hope the four nations of the UK will continue to develop closer bonds with the nation of Mongolia.

10:36

[Catherine West (Hornsey and Wood Green) (Lab)]

It is a pleasure to serve under your chairmanship, Mrs Harris. I thank the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) for securing this debate. The chair of the all-party group for Mongolia, the hon. Member for North Wiltshire (James Gray), spoke fondly of his regard for Mongolia, and the hon. Member for Airdrie and Shotts (Ms Qaisar) rightly called for responsible business practices around mining, particularly in relation to traditional nomadic populations.

It is particularly apt that this debate is taking place during the Naadam holiday. I want to pay my respects, and I wish all those celebrating a very happy Naadam. Although our relationship with Mongolia is not our oldest diplomatic relationship, it is one of the warmest. It was a privilege to represent the Labour party at the reception earlier this year on the anniversary of 60 years of diplomatic relations between our two countries, and it is a pleasure to stand here on behalf of the Labour party to celebrate that landmark.

I was also pleased to attend a Mongolian British chamber of commerce event led by John Grogan, the former Member of Parliament for Keighley, who is a great friend of the hon. Member for Shrewsbury and Atcham and a great champion of Mongolia in the UK. In recent months, I have met His Majesty’s ambassador to Mongolia, Fiona Blyth, and Minister-Counsellor of Mongolia, Bolormaa Batsaikhan. They have both given me a good insight into the relationship and the opportunities between our two countries. I am confident that, through them and the committed team of diplomats in London and Mongolia, the relationship will continue to grow.

I want to put on the record Labour’s enduring thanks for Mongolia’s contribution to the NATO military mission in Afghanistan. There is no greater symbol of abiding friendship and co-operation than sending young men and women into danger to support allies, and Mongolia stepped up to the plate. The international contribution to the people of Afghanistan was truly global, and the 6,000 Mongolian soldiers proudly served shoulder to shoulder with our servicemen and women in Kabul.

I also applaud the growing trading relationship between Mongolia and the UK. There is ample room for it to continue to grow—admittedly, from a low bar—and I know there will be many opportunities for British business to visit the country and develop interests there. In particular, there seems to be an opportunity to share best practice on traffic management to reduce poor air quality, which was mentioned earlier.

I will end on that note, as this has been a particularly consensus-based debate, but I ask the Minister what steps the Government are taking to support the relationship. What measures are being considered to increase exports and cultural exposure here in the UK and in Mongolia? We should not forget that English is our best export, so I hope the Minister is promoting the British Council and the many wonderful things that it can offer in Mongolia. Our relationship is warm, and the opportunities are very real and can mutually benefit both countries. Here’s to 60 more years of a growing relationship.

10:39

[The Minister of State, Foreign, Commonwealth and Development Office (Anne-Marie Trevelyan)]

It is a pleasure to serve under your chairmanship, Mrs Harris. I thank the team for making sure the debate could go ahead, despite the challenges at the start.

I am grateful to my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski) for securing the debate and for his passionate commitment, as the trade envoy to Mongolia, to highlighting the wider trade opportunities opening up now that the UK has left the EU and we once again have control of our trade policy. I encourage him to bring his local businesses together, at the Dog and Duck or some other watering hole in his constituency, to share with them some of the CPTPP opportunities that are coming up and to think about how we can ensure that resources as part of the export strategy now held in the Department for Business and Trade can support them as they look to new and exciting markets.

To the point made by the shadow Minister, the hon. Member for Hornsey and Wood Green (Catherine West), and wider questions about opportunities with Mongolia, a key strand of the export strategy is to help our local small and medium-sized enterprises to find the new opportunities for export. I am also grateful for the contributions of other hon. Members and the warmth of their comments. I hope to cover some of the questions that were raised.

As has been mentioned, 2023 is a significant point for UK-Mongolian relations, marking 60 years of diplomatic relations between our two countries. The UK is rightly proud of its status as the first western nation to establish diplomatic ties with Mongolia, which opened the door for like-minded nations to do the same. Mongolia continues to be an important strategic partner for the UK. As we look towards the Indo-Pacific through the lens of the integrated review, Mongolia continues to be at the heart of some of the opportunities there.

Mongolia’s story is as fascinating as it is complex. A democratic island in a sea of autocracy, it has overcome many of its geographical constraints to emerge a modern, strong success story. As it continues its evolution from Soviet satellite state to Asian market economy, we share a deep commitment to democratic values and upholding the international order. As the shadow Minister highlighted, Mongolia has demonstrated that with real tangible commitments through its armed forces commitments.

Mongolia operates a third neighbour policy, reaching out to partners such as the UK, diversifying its relationships and reducing its dependence on Russian energy and trade with China. UK trade with Mongolia is good for us both. Mongolia continues to build resilience to Russian and Chinese pressure while we open up new markets for British businesses. For example, the south Gobi desert is home to the world’s fourth largest copper mine, operated by Rio Tinto, which has invested around $12 billion in the Mongolian economy. The UK Government have offered consistent support as the project has developed, and UK businesses have benefited from a variety of opportunities in the extensive supply chain.

Since we signed a memorandum of understanding with Mongolia to co-operate in the extractive sector, its abundant mineral resources have attracted global attention, with France, the US and South Korea also signing agreements to help explore Mongolia’s critical minerals industry. That is in part driven by Mongolia’s desire to move away from a reliance on selling to China, while western countries seek to reduce China’s dominance in the wider critical minerals supply chains. The availability of UK export finance for projects in Mongolia is another sign of our commitment to our trading relationship and to strengthening the economic ties between our countries.

Elsewhere in the country—to the shadow Minister’s point—education, one of the UK’s greatest exports, is proving to be a vital tool to combat Russian disinformation. Mongolia recently made English its official second language, displacing Russian, and is looking for investment to increase English teaching coverage across the country. We have a strong educational relationship, thanks in large part to our Chevening programme. Eleven Mongolian scholars came to the UK to study this year, and I am delighted to announce that we will welcome 17 next year, reflecting both the high calibre of the students, which is of course always important, and the productive nature of our relationship with Mongolia’s Ministry of Education.

It is in that spirit of hope for the future that, later this year, the UK will sign a memorandum of partnership and co-operation with Mongolia to mark our diplomatic anniversary and to deepen our relationship across a range of areas, including critical and strategic minerals, trade and investment, education and the environment. The partnership shows the Foreign Secretary’s ambition to boost UK influence in middle-ground countries, and to support an international system that reflects our values, especially in Asia.

To grow our influence over the long term, we need to provide greater support for Mongolia in the field of education. That is a key part of our offer and an avenue through which to combat Russian influence, but more than that, it is an investment of faith in this wonderful country that has chosen English as its language of business.

We will work with Mongolia to develop its infrastructure and help it to diversify its energy supply. Discussions are ongoing over the construction of a copper smelter, which my hon. Friend the Member for Shrewsbury and Atcham raised, and which would help Mongolia to move up the value chain and reduce dependence on China for copper processing. We will work with Mongolia to ensure that any copper processing operation makes economic sense and is done—importantly for us—in the most sustainable way possible.

Mongolia is also a key ally in stopping the circumvention of Russian sanctions, which is essential to denying Russia the funding for its war in Ukraine. We can help by continuing to provide support for Mongolia in its fight against corruption and assisting it in its efforts to strengthen its democracy and build state capacity. At 33 years old, Mongolia is a young democracy, but strengthening democracies anywhere in the world automatically strengthens our own.

It is important for the UK to continue to engage with Mongolia, pinched as it is between Russia and China, and we will seek to co-operate in whatever way we can. Our relationship with Mongolia is already in very good standing, and we recognise the opportunities that that strong partnership presents, as well as the consequences for the international system should we engage insufficiently.

Mongolia is a western-leaning democracy that is walking a diplomatic tightrope—maintaining healthy relations with the neighbours on which it depends, while deepening ties with the west and across the Indo-Pacific. Its move to make English an official language is a sign of its willingness to engage internationally, and when the UK engages in return, we help to contest the Russian periphery and isolate Russia on the global stage. The memorandum of partnership and co-operation will be the start of increased engagement with Mongolia and a road map to a strong and productive future relationship.

10:46

[Daniel Kawczynski]

I will not say much, because I have already spoken for a long time. My hon. Friend the Member for North Wiltshire (James Gray), the chair of the all-party parliamentary group for Mongolia, referred to Gobi Cashmere. Of course, cashmere is one of the most important exports for Mongolia. I know that Gobi Cashmere is setting up operations in Europe from the United Kingdom and will want to export more cashmere. Being 6 feet 9 inches, the tallest Member of Parliament and officially a giant, it is not possible for me to buy suits easily, but I am modelling my Gobi Cashmere suit, which I purchased in Mongolia. Once you try Mongolian cashmere, you never go back. For anybody who is in the market for a new suit, this is what you can get—Gobi Cashmere from Mongolia.

Question put and agreed to.

Resolved,

That this House has considered UK-Mongolian relations.

10:47

Sitting suspended.