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1.45 pm
The Minister of State, Foreign and Commonwealth Office (Mr. Jeremy Hanley): 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.
It being Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.
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