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It is a privilege and a pleasure to introduce a short debate on the United Kingdom's relations with Mongolia. It is a very long time since the House had the opportunity to discuss those relations—it is certainly a long time since they were discussed at such a reasonable hour. My noble Friend Lord Rees told me that there was much speculation about the Mongolian tax system during debates on Finance Bills in the 1970s but, that apart, there has been precious little parliamentary discussion of Mongolia.
However, that is not to say that there is not a significant number of hon. Members with a real knowledge of and interest in this particular subject. I became interested in Mongolia thanks to our former colleague Sir James Kilfedder, whose untimely death left such a void in those of us who knew and loved him dearly.
Mongolia is not—to adapt a phrase used by our former Prime Minister, Mr. Neville Chamberlain—a faraway country of which we know little. That is far from the truth. As we speak, at this reasonable hour, darkness is descending in Ulaanbaatar. It would be perfectly possible for someone from this country to reach Mongolia by air in well under 24 hours, so it is not a faraway country, but it is a most interesting one.
Mongolia is about the size of western Europe, and its population is 2.3 million—about that of Greater Birmingham. In other words, a country the size of half our continent has a population equivalent only to that of our second principal city. It might have a small population, but it has masses of what President Kennedy used to call geography.
No country in the world has more sunshine than Mongolia. There are few clouds, at least in the physical sense, although I shall refer to some aspects of public policy which could be described as clouds. The sun shines, and the sky is blue. To the north of Mongolia lie the Arctic wastes of Siberia and its 100 million people. To the south lies the Gobi desert and Inner Mongolia, as it used to be called.
To the east is the great wall of China, Beijing and the plains and riches of China, which have so fascinated people from our continent since the time of Marco Polo. To the west is the romance and mystery of Bukhara, Samarkand and Tashkent. That is an enormous area of north central Asia, with which this country has long had friendly relations.
I am proud and pleased to be able to say that relations between our two countries are as warm today as they have ever been. The President of Mongolia has just made a successful visit—the first ever such visit—to this country. Along with the hon. Member for Bolton, South-East (Mr. Young), I was privileged to be part of the fifth Round Table delegation, which, under the redoubtable leadership of my noble Friend Baroness Trumpington, visited Mongolia shortly after Easter.
This is May, and it should be springtime in Mongolia, with the equivalent of alpine flowers all over the plateau, but, for reasons that I shall identify in a moment, since our visit—but, I hope, not because of it—a terrible tragedy has befallen that country. However, I want to use this debate not to dwell on darkness but to identify some of Mongolia's many assets which should be of interest and advantage to us.
Mongolia's population is highly educated. Probably no other country has achieved such good results, per head of the population, in the school and higher education system. It was a privilege and a pleasure to me to meet people who had learned about the market economy, for example, at the university of Leningrad, and who had been able to learn something of European culture and civilisation in the somewhat unlikely institutions built in the spirit of those awful old reprobates, Walter Ulbrecht and Mr. Honecker of the former East Germany.
What we would regard as such an unpromising start has nevertheless left the Mongolian population educated, sophisticated, skilled and knowledgeable, which is a massive asset. Mongolia also had an outstanding health system, which, alas, has to some extent fallen into decline as a result of what Mongolia regarded as the immense tragedy of the collapse of the Soviet empire.
In the Soviet days, Mongolia was not a Soviet slave or captive nation, as some countries in eastern Europe felt themselves to be; rather, it was a friendly and integrated part of the Soviet world, although its economy was very dependent on mutual trade with the old Soviet Union. Therefore, the collapse of the iron curtain and the Soviet system reduced overnight the wealth of the nation by one third. Very few countries could sustain such a blow, but Mongolians, with the good humour that we would expect of them, set about introducing reform.
The World bank and the International Monetary Fund—two institutions familiar to the House—arrived in Mongolia and gave advice that the people were happy to accept, after proper consultation. Mongolia then proceeded with modernisation, liberalisation and the start of a programme of privatisation.
Of course, as the old trade links had been destroyed, and as there was no infrastructure of alternative trading routes, the blow suffered by Mongolia in the early 1990s was formidable. That is one reason why I say to the Minister of State, Foreign and Commonwealth Office, whom I welcome to his place, that I hope it may be possible for us to do more to assist Mongolia than has hitherto been possible.
Mongolia has some outstanding products of its own. The aficionados of vodka say that Mongolian vodka is the best in the world. There is no question but that its cashmere is of the highest quality. I hope that it may be possible to expand trade in those two important items between Mongolia and Great Britain.
There are other opportunities for us, and the Round Table delegation enabled us to explore some of them. I welcome the fact that the Confederation of British Industry was represented on the delegation. Much hard work was done in acquiring information and intelligence to be spread among companies in this country to enable them to recognise those opportunities.
I pay tribute to a company in my constituency, Marlec Engineering, which is the only company in this country ever to be awarded the Queen's award for industry for exports to Mongolia. The company has supplied Mongolia with wind-powered machines for generating energy.
Our relations with Mongolia are the product of hard work. I pay tribute to the Mongolian ambassador to this country, who has been here for more than a year and has worked hard to improve our relations. I also want to pay tribute to his predecessor, who was here for a number of years. I knew him well, and I was delighted to see him again in Ulaanbaatar. He is now the deputy Minister for Foreign Affairs.
On the British side, I pay tribute to the wonderful work done by the non-governmental organisations. These are essentially British in character, and they are doing useful work in Mongolia. For example, the work of Save the Children in Mongolia—led by a scion of the Dukes of St. Albans—is as valuable as its work in any other part of the world. I also pay tribute to the splendid daughter of Canada who led the British team of volunteers from the Volunteer Service Overseas. There are many non-governmental ways in which British people are engaged in important and necessary work in Mongolia.
I also pay tribute to our ambassador and his excellent staff in Ulaanbaatar. At one stage, it seemed that the British embassy—opened in 1962 and the first western embassy in Ulaanbaatar—might not survive some of the periodic efforts of the Foreign and Commonwealth Office to save money in our posts abroad. Fortunately, Ulaanbaatar was saved from that fate.
The work of Mr. Sloane, our ambassador—who is shortly to retire—his wife and his excellent staff has been outstanding, in both the public and the private sector. Too often, hon. Members ignore what some of our less important posts abroad do, but sometimes the staff in posts in what may rank as only minor countries do work at least as important as, if not more important than, those in the great posts of Washington, Paris, Bonn and Japan.
My plea today is that Mongolia deserves British attention, and one area in particular that I wish to stress is the know-how fund for the republics of eastern Europe. Mongolia was excluded from that fund—perhaps for good reason—but it was just as much a part of the Soviet system as Bulgaria, Romania, Czechoslovakia and Poland. It is somewhat strange that it has been excluded from the scope of the funding. But I do not want to be too technical. If for any reason the know-how fund is not an appropriate vehicle to try to assist the Mongolians, I hope that it may be possible to boost our overseas aid funding, so that Mongolia receives a higher priority than at present.
I pay tribute to the university of Leeds, which. is doing excellent work in educating in our language students from Mongolia. However, there is some suggestion that Cambridge university—the world's most important university—should abandon Mongolian studies. Mongolian may not rank as the most important language in the school of oriental languages at Cambridge, but it is important that a university of the quality of Cambridge should continue to make it available. I hope that my right hon. Friend the Minister of State will draw to the attention of the vice-chancellor the fact that it is the view of many hon. Members that Mongolian should be retained at Cambridge.
May I also say how important the overseas service of the BBC is? In a curious way, this country has managed to nurture the leading English language authorities in countries such as Mongolia through the work that they do for the BBC overseas service. We were blessed in Mongolia to have as one of our number a man who is undoubtedly regarded worldwide as the leading academic authority on Mongolia in the English language. He was able to acquire this skill through the work he did for the BBC overseas service. That is an important way in which we can assist Mongolia.
Finally, I wish to refer to the events in Mongolia since we left shortly after Easter. Hon. Members may be aware that some 80,000 sq km or 31,000 square miles— equivalent to an area stretching from John O'Groats to Land's End and from Milford Haven to Great Yarmouth—has been on fire. This has had a devastating effect on the country and its infrastructure, which was not the strongest in any event. The UK rapidly moved in to offer £50,000 on a bilateral basis and then through the multilateral funds to assist in the international effort to control the fires in Mongolia. But more is required, and I hope that we can give everything we can to help Mongolia at this time of maximum stress and trial.
We went in friendship, and we were received in friendship. Britain has built up friendly relations with this most excellent country, and my most fervent wish is that we continue to build upon the progress that has been made in the past decade and that we continue to look to Mongolia as a friendly, attractive and worthwhile partner in international affairs.
I am grateful to my hon. Friend the Member for Corby (Mr. Powell) for giving us an opportunity today to discuss our relations with Mongolia. Mongolia is not a country that normally receives much public attention here, inside Parliament or out, and this debate is a welcome opportunity to redress that.
Before doing so, I would first like to pay tribute to the work of my hon. Friend as chairman of the British-Mongolian parliamentary group. I must also thank both him and my right hon. and noble Friend Lady Trumpington—to whom he referred—who led the delegation, and to the hon. Member for Bolton, South-East (Mr. Young), who also participated, at last month's fifth meeting of the Mongolian-British Round Table in Ulaanbaatar. I gather that it was a resounding success, and my hon. Friend confirmed that. I know that many constructive proposals for expanding our relations emerged from that meeting, and we are studying them carefully.
Since then, we have also had the pleasure of welcoming President Ochirbat to the United Kingdom on the first ever visit by a Mongolian Head of State to this country. He had an audience with Her Majesty the Queen, and discussions with my right hon. Friend the Prime Minister and other colleagues. I was honoured to have three meetings with him during his visit, and we all exchanged views on the ways in which Britain might best be able to help support and sustain Mongolian development. I also pay tribute to His Excellency the Mongolian ambassador, who keeps in touch with me regularly in the interests of both our countries. He, our excellent ambassador Ian Sloane, and Mr. Sloane's wife helped to make the president's visit such a success.
It is unfortunate that so little is heard here of Mongolia, because its performance in recent years has been truly remarkable. It was the first satellite of the Soviet Union, and was for 70 years among the most faithful followers of the twists and turns of Soviet politics. Yet it was the first Asian country to throw off the yoke of communism and the shackles of central planning, to embrace the principles of democracy and establish an open market economy.
Mongolia was, under communist rule, one of the most isolated countries in the world. It is landlocked, bordered only by the Soviet Union and China, and its economy was linked only to those of Soviet bloc countries. The economic legacy of the Soviet years was to set back development of Mongolia's traditional pastoral nomadism and create ill-suited industry aimed at supplying only Soviet needs.
Energy supply in one of the earth's harshest climates was, and remains, inadequate. Communications are poor. Socially, the Soviets provided education, health and social services, which Mongolia, with a GDP per capita of less than $350 per annum, cannot sustain. Its natural resources remain to a large extent untapped. The geography of Mongolia hampers communications with the outside world. Information technology is only just beginning to make an impact, and thus the international community still knows little about the country.
That means that the courageous and determined Mongolian people have not hitherto received the credit and attention that they merit. Next month, they go to the polls to elect a Parliament freely for the second time since the collapse of communism in their country. It is important that Mongolia should continue successfully along that path, not just for the good of the Mongolian people but because a successful Mongolia, despite numerous obstacles, can be an example to other countries in the region.
Mongolia deserves our support. We can therefore take some modest pride in the fact that the Mongolian parties are looking to our own political parties for advice and support. I know that, with the backing of the Westminster Foundation for Democracy, some support has already been forthcoming; I also know that Mongolia's Parliament, the State Great Hural, has extended an invitation to the British-Mongolian parliamentary group to visit the country. If such a visit were possible, I am confident that it would be very well received in Mongolia.
Progress in introducing democracy to Mongolia has been impressive, and the efforts to rebuild the economy following the end of Soviet aid have been even more so. The collapse of the Soviet Union meant a loss to Mongolia of subsidies estimated at some 30 per cent. of gross domestic product.
This enormous country, with its small population— graphically and accurately described by my hon. Friend— decrepit infrastructure, lack of managerial know-how and meagre financial resources, faces many obstacles, particularly in its bid to achieve self-sustaining economic growth. As a landlocked country, it is entirely dependent on the good will of its two large neighbours for trade and communication links. But, with admirable self-discipline, the Mongolians have followed closely the advice of both the International Monetary Fund and the World bank. As a result, positive economic growth was restored in 1994, and last year growth increased to an impressive 6.3 per cent.
The prospects for this year were brighter still, but the recent widespread fires—to which my hon. Friend referred at the end of his speech—have caused considerable damage, and have been a bitter setback to Mongolia's recovery efforts. It is not yet clear that the worst of the fires are over. They have taken a terrible physical toll: the environment has suffered enormous damage, with perhaps a quarter of the forest cover destroyed, and the long-term damage to Mongolia's recovery will be severe. Britain was one of the first countries to respond to Mongolia's requests for international help in fighting the fires, and our contribution, although small, has been one of the largest to date. We stand ready to consider further requests for assistance.
President Ochirbat's visit last month demonstrated the warmth of our bilateral relations. They have never been better. We were the first western country to establish diplomatic relations with Mongolia, in 1961, and to open a resident embassy in Ulaanbaatar, in 1963. The Mongolians have not forgotten that, or the signal that it sends of our support for their independence.
The cultural links established through some of our universities go back at least as far, and were recognised by the President, who visited Leeds university while he was here. Indeed, there is a link between Ulaanbaatar and the city of Leeds, strengthened this year by both the President's visit and that of the Lord Mayor of Leeds to Mongolia.
We have also made a significant contribution to helping Mongolia in its transition. Through our bilateral aid programme, we have provided about £3 million of assistance since 1992. The European Union provides around 8 million ecu each year, of which we contribute almost one fifth.
British support does not come just from the Government. Despite the problems of distance and difficulty of supply, some British companies have entered into joint ventures, and others have won contracts under multilateral aid arrangements. Investment by OECD countries is still very modest, but Britain is among the leaders. British aid agencies, such as the Save the Children Fund and Voluntary Service Overseas, are performing heroic work in Mongolia in helping to tackle poverty.
One effect of the Soviet era was to create a climate of aid dependency in Mongolia. One of the aims of British aid, whether bilateral, through the European Union or through the multilateral aid donors, is to encourage Mongolia into a can-do attitude. Our efforts are therefore aimed at giving the Mongolians the skills and knowledge need to use their own resources, manage their economy and enhance their position on the international stage.
Mongolia's needs are great, and Britain's contribution is targeted on the areas where the Mongolians have themselves told us it is most valuable. They recognise that a key to success in the modern world is the English language, and that is one area in which they are especially keen to have help from us. It is natural that we should give such help, and it is a particular focus of attention in our bilateral aid programme.
We have already provided English language teachers and BBC English programmes for Mongolian television, and we will continue to provide support for specialist English language teaching, while Foreign Office and Overseas Development Administration scholarships enable some of the brightest Mongolians to come to Britain for further study.
We help in many other ways. In view of the importance of livestock to Mongolia's economy, we have donated remote sensing equipment to enable herds and grazing patterns to be more effectively monitored. The Ministry of Agriculture is now arranging extra training in the use of that equipment, as well as considering ways of helping to develop horticulture. Mongolia has a young population and cannot meet all its educational needs, but, in co-operation with the Save the Children Fund and within the framework of the Mongolian Government's own plans, we are helping to strengthen its pre-school system.
My hon. Friend raised the question of extending the know-how fund to Mongolia. Indeed, he recently wrote to my right hon. and learned Friend the Foreign Secretary about the issue. Unlike the countries of central and eastern Europe and the former Soviet Union, which receive technical assistance from us through the know-how fund, Mongolia has its own bilateral aid programme. That reflects the particular pressing needs it faced at the time when the aid programme was established.
Mongolia was badly hit by the break-up of the Soviet Union. In particular, the need to pay for imports in hard currency rather than transferable roubles soon exhausted its foreign exchange reserves. Whereas all our aid to the other former Soviet bloc countries has been in the form of technical assistance, the bulk of our recent aid to Mongolia has therefore been in the direct provision of badly needed lubricants for Mongolia's industries, the purchase of which would otherwise have been a severe drain on its very limited foreign exchange.
However, as Mongolia's economy has turned round, so its needs are changing. Our bilateral programme will seek to provide assistance in areas where it is most needed. While the financial constraints on our aid programme limit our ability to increase our assistance, our technical co-operation programme will continue.
The Mongolians have also asked us to resume export credit guarantee cover. We are at present reviewing our position on that, although our decision will have to take account of Mongolia's arrangements with the IMF. Following the latest meeting of the Round Table and President Ochirbat's visit, we are also considering other ways in which we can help.
The President kindly invited me to visit Ulaanbaatar, and I intend to do so before too long. That will enable me to see for myself the challenges that Mongolia faces, and to discuss with its leaders ways in which we may help. I know that concern has been expressed about the future of Mongolian studies at British universities. We are conscious of the long and proud tradition of those studies, and are investigating, as a matter of priority, ways in which to ensure that they can be maintained.
Mongolia deserves our support and encouragement for the democratic and economic reforms that it is pursuing. We have helped, and will continue to help, Mongolia in the widest possible way within the available resources. We hope that other countries will join us in doing that, and in encouraging Mongolia to play a full role in the international community. We look forward in the near future to welcoming it to membership of the World Trade Organisation.
We are pleased that our support is being reflected by an upsurge in Mongolian interest in Britain. The number of Mongolians wishing to visit Britain to study, make contact with our institutions, learn our way of doing things or just look around continues to grow. The Mongolians see their country as small and somewhat vulnerable, and therefore value the presence of our embassy in Ulaanbaatar.
To cope with the growing interest, we are extending our embassy there. Given the extreme harshness of the Mongolian winter—which prevents any outdoor building work for about two thirds of the year—and the absence of suitable equipment and materials locally, even such a seemingly modest activity becomes a major task; and the fact that we are performing that task should be seen as a sign of our strong commitment to Mongolia. My hon. Friend will understand why do-it-yourself is one of the talents required of our ambassador in Ulaanbaatar.
It is in the interests of the world at large for Mongolia to remain an independent, democratic state with its unique culture and contribution. Our diplomatic presence, our continuing aid—both bilateral and through the international financial institutions—and our modest but growing trade and investment, as well as the realisation by some British travellers that Mongolia is really worth visiting, are all symptoms of a healthy and developing relationship.