Mongolia to Present AI-Powered Green Data Center Project at COP17 www.montsame.mn

At its session on May 13, 2026, the Cabinet decided to present a project to establish an artificial intelligence-based, energy-efficient “Green Data Center” in Mongolia at the 17th Conference of the Parties to the United Nations Convention to Combat Desertification (COP17).

The Government also instructed the Minister of Digital Development, Innovation and Communications, Nomin Chinbat, to implement measures to create a legal framework for putting data into economic circulation and enabling its reuse.

By establishing a “Green Data Center” powered by Mongolia’s renewable energy resources and equipped with AI computing infrastructure, the country could create a free data zone that meets international standards and potentially develop into a regional data hub.

The project is expected to serve as a foundational step toward implementing Mongolia’s long- and medium-term policy goals of establishing big data systems and integrating data into economic circulation, according to the Government Media and Public Relations Department. 

Mongolia welcomes 222,642 tourists in first four months of 2026, marking 17% increase www.gogo.mn

The influx of foreign travelers to Mongolia continues its steady upward trajectory. As of May 6, 2026, the total number of international arrivals reached 222,642, bolstered by a significant surge of more than 14,500 visitors in just the first six days of May.

While the tourism sector experienced a 5.9% decline in 2024, the industry has seen a robust resurgence since 2025. In the first four months of this year alone, arrivals surpassed the 200,000 mark, representing a 17.6% increase compared to the same period last year.

Historical data as of April 30 reflects this consistent growth: arrivals stood at 141,217 in 2023, dipped to 132,888 in 2024, and rebounded to 176,915 in 2025 before climbing to 208,129 in 2026. According to the Mongolian Tourism Professional Association, travelers from Russia, China, and South Korea remain the primary drivers of Mongolia's expanding tourism market. 

Mongolia’s budget projections prioritise recurrent spending over strategic development www.asianews.network

Parliament has commenced deliberations on the 2027 budget framework and the fiscal projections for 2028–2029. These foundational documents will define Mongolia’s economic outlook for the next three years and set the stage for the formal adoption of the 2027 state budget this autumn.

While the state budget is theoretically designed to catalyze development through investments in energy, infrastructure, innovation, and technology, the majority of government spending remains concentrated on recurrent expenses. For the 2026 fiscal year, total expenditure is set at MNT 33 trillion. However, MNT 24.9 trillion, the vast majority of the budget, is allocated to operational costs, such as civil service salaries, bonuses, and utility maintenance.

Social welfare remains a dominant fiscal priority, with MNT 9.2 trillion earmarked exclusively for social insurance, child benefits, and pensions. In contrast, capital investment for development projects accounts for only MNT 8.5 trillion of the total budget.

This spending pattern is expected to persist in the coming years, even as the government faces pressure to fund critical infrastructure. Despite these fiscal constraints, Ulaanbaatar city officials have maintained a commitment to addressing the shortage of educational facilities by 2027 through the construction of new schools and kindergartens.

Foreign Financing Remains Significant in Mongolia’s Budget Policy www.montsame.mn

MONTSAME National News Agency, in cooperation with MICC Mongolia International Capital Corporation LLC, is delivering weekly updates on Mongolia’s domestic capital markets and economic developments to its readers.

Weekly Capital Markets and Economic Review

(2026.05.04–2026.05.10)

MONGOLIAN STOCK EXCHANGE
During the week, a total of 6.06 million securities worth MNT 16 billion were traded on the Mongolian Stock Exchange. Among them, Tavilga JSC, Khan Bank JSC, Ard Financial Group JSC, APU JSC, and Mongolian Stock Exchange JSC led in terms of trading value. A total of two block trades were executed during the period.

Ard Financial Group (AARD): 121,000 securities traded at MNT 2,944 per unit, totaling MNT 357 million
Tavilga JSC (TVL): 26,000 securities traded at MNT 142,000 per unit, totaling MNT 3.7 billion
 
Last week, the main stock market indices closed with mixed performance, reflecting a short-term correction following previous gains. The TOP-20 index fell by 1.00%, and the MSE A index declined by 0.66%, indicating increased profit-taking and caution among investors in large- and mid-cap stocks. In contrast, the MSE B index rose slightly by 0.13%, suggesting continued selective buying activity in the small-cap segment. Overall, market movements indicate a transition from broad-based growth toward a consolidation phase, with investors reassessing risk after recent gains. While activity in the small-cap segment remains, overall market momentum shows signs of weakening.

BALANCE OF PAYMENTS SURPLUS IN Q1 2026, SUPPORTING TRADE GROWTH

According to the Bank of Mongolia, the country’s balance of payments recorded a surplus of USD 95.5 million in the first quarter of 2026, improving by USD 697.6 million year-on-year. The current account also posted a surplus of USD 412.5 million, up by USD 1.4 billion compared to the same period last year.
Key indicators:

Current account surplus: USD 412.5 million
Overall balance of payments surplus: USD 95.5 million
Exports: +68.3% YoY
Imports: -7.8% YoY
Goods trade surplus: USD 2.4 billion
Services account deficit: USD 1.0 billion
Primary income deficit: USD 1.1 billion
The improvement was mainly driven by the strong performance of the goods trade balance, which reached a surplus of USD 2.4 billion, nearly nine times higher than the previous year. Exports increased by 68.3% to USD 4.8 billion, while imports fell by 7.8% to USD 2.4 billion, significantly widening the trade surplus.

However, pressures remained in services and income accounts. The services deficit increased by 26.7% to USD 1.0 billion, while the primary income deficit doubled to USD 1.1 billion, mainly due to rising dividend and interest payments to foreign investors.

The financial account recorded a deficit of USD 85.8 million, driven largely by outflows in other investment categories. Nevertheless, net foreign direct investment increased 2.4 times year-on-year, indicating sustained investor interest.

Key risks:

High service imports
Rising outflows of profits, dividends, and interest payments
Continued financial account deficit
Heavy reliance on mineral and commodity exports
Although Mongolia’s external position improved significantly, the gains remain largely driven by commodity exports and import contraction, while structural vulnerabilities persist due to persistent service and income deficits.

TRADE TERMS IMPROVE, EXPORT PRICES OUTPACE IMPORTS

According to the National Statistics Office, Mongolia’s terms of trade index reached 97.1 in March 2026, up 19.3% year-on-year and 0.8% month-on-month, indicating that export prices have increased faster than import prices, improving overall trade conditions.

Key indicators:

Terms of trade index: 97.1
YoY change: +19.3%
MoM change: +0.8%
Export price index: 100.4
Import price index: 103.4
Export prices rose by 16.3% year-on-year, driven mainly by increases in gold and copper prices:

Gold: +86.2%
Copper: +56.7%
Import prices declined by 2.5% year-on-year, easing cost pressures. As a result, purchasing power of export revenues improved, strengthening external trade conditions. High commodity prices—especially for gold and copper—continue to support export revenues and foreign currency inflows, providing short-term support for the balance of payments, reserves, and the tugrik exchange rate.

However, the index remaining below 100 suggests that despite improvements, long-term equilibrium has not yet been reached. Mongolia’s trade conditions remain highly dependent on global commodity price fluctuations.

GOVERNMENT PRESENTS REFORMS TO IMPROVE FOREIGN DEBT EFFICIENCY AND REDUCE TAX BURDEN

At a meeting of the MPP parliamentary group in the State Great Khural, Minister of Finance Z. Mendsaikhan presented updates on foreign debt utilization and proposed tax reforms. As of last year, government external debt reached MNT 35.4 trillion, equivalent to 39.4% of GDP, highlighting the continued importance of external financing.

Allocation of foreign debt financing:

 26% – Transport sector
22% – Ulaanbaatar infrastructure and housing
14% – Water supply, sanitation, and health
11% – Energy
9% – Education and emergency services
18% – Other sectors
The government stated it will focus future borrowing on high-impact economic and social projects, improve efficiency, reduce wasteful spending, and strengthen fiscal discipline. It also noted that approving small annual borrowing amounts has led to project delays of 5–10 years, increasing overall financing costs, and plans to urgently submit legislation to improve loan utilization efficiency.

 Proposed tax reforms include:

1% tax on individual entrepreneurs with annual revenue below MNT 1 billion
Exemption from property tax on sale of owner-occupied housing
Introduction of a 15% tax bracket for firms earning MNT 6–10 billion profit
Reduction of tax rate to 1% for ~180,000 SMEs with income up to MNT 2.5 billion
Raising VAT withholding threshold from MNT 50 million to MNT 400 million
Tax incentives for IT and virtual zone companies
Allowing firms with tax arrears to use 20% of incoming cash flow instead of full account freezing
Capping penalties at 50% and extending tax reporting correction periods

The proposed reforms aim to reduce tax burdens on individuals and businesses, support SMEs, and improve economic activity while enhancing the efficiency of public borrowing and fiscal sustainability. Given the still-high level of external debt, debt efficiency and fiscal stability are expected to remain key market considerations going forward.

The Steppe Is Not a Fortress: What Mongolia Can Learn from Iran’s Mosaic Defense (opinion) www.smallwarsjournal.com

The most dangerous moment in a modern war is not the first strike. It is the silence that follows—when the center goes dark, communications fail, and everyone waits for orders that never come. That is the moment most states are least prepared for.

There is a persistent illusion in small-state defense planning: that survival lies in cohesion. Tighten command, centralize authority, harden the capital, and protect the center. It is a comforting idea, but it is also wrong. If the emerging contours of the current confrontation involving Iran and US/Israeli pressure demonstrate anything, it is this: modern war punishes cohesion under pressure. Precision strike regimes, cyber disruption, and intelligence penetration are designed to locate the center—and disable it quickly. A state that depends on its center is a state that can be paralyzed quickly.

Iran’s answer to this problem is not elegance or efficiency. It is not even, in the conventional sense, effectiveness. It is survivability— not as an abstract concept, but as a design principle.  Critical capabilities are deliberately dispersed across geography and institutions. Command authority is duplicated and layered. Logistics networks are redundant and localized. The system is built so that no single strike, or even a sequence of strikes, can halt its ability to function. And that is precisely why Mongolia should be paying attention.

It is worth noting that the relevance of Iran here is not geopolitical alignment, but structural design. Iran has spent decades preparing for conflict with technologically superior adversaries. Mongolia faces a different strategic environment—defined primarily by its position between Russia and China—but the underlying problem is similar: how to endure pressure from more powerful actors without relying on a vulnerable center.

What analysts often describe as Iran’s “mosaic defense” is better understood as a rejection of the fortress model altogether. In practice, it means a patchwork of semi-autonomous military and paramilitary units—particularly within the Islamic Revolutionary Guard Corps (IRGC) and the Basij—organized at provincial and local levels. These units are trained and structured to operate independently if cut off from central command, drawing on pre-positioned resources, local knowledge, and pre-defined operational intent. The result is not efficiency, but persistence. In this way, it trades efficiency for survivability, clarity for redundancy, and control for endurance. Instead of concentrating authority and capability, Iran disperses both—geographically, institutionally, and operationally.

The premise is brutal: in a high-end conflict, central command will be degraded or destroyed early. Communications will fail. Senior leadership may not survive the opening phase. The system must therefore function not despite this reality, but because it anticipates it. Authority is pushed downward. Provincial and local commands are expected to act on intent, not instruction. Logistics are dispersed. Redundancies are built not as backups, but as primary pathways. Units are designed to continue operating even when cut off, isolated, or partially degraded.

This is not decentralization as a management philosophy. It is decentralization as a warfighting necessity. For Mongolia, this should be a deeply uncomfortable insight. The Mongolian state remains highly centralized—not just politically, but functionally. Critical infrastructure, decision-making authority, and crisis response capacity are concentrated in and around Ulaanbaatar. Energy distribution, communications networks, and command structures all rely heavily on the capital’s continuity. In peacetime, this is efficient, but in crisis, it is a liability. A Mongolia that cannot function without its center is a Mongolia that can be strategically paralyzed.

The most radical element of Iran’s approach is not dispersion, it is pre-authorization. Units are not simply given autonomy; they are expected to operate without real-time guidance. Command intent is established in advance, and decision rights are delegated downward, so that local commanders can act without waiting for permission. The system assumes that waiting for orders is, in itself, a form of failure. However, this strategy runs counter to the instincts of many modern bureaucratic states, where control is equated with effectiveness. But in a degraded environment, control is often illusory. Communications delays, uncertainty, and disruption make centralized direction not just difficult, but dangerous.

Mongolia’s defense and governance structures are not currently designed for this reality. Decision-making authority remains tightly held. Crisis scenarios often assume continuity of communication and leadership. The implicit model is one of managed disruption—not systemic degradation. Iran’s model begins from a different premise: what if disruption is not an exception, but the baseline condition? And what if the system must function precisely when coordination breaks down? For Mongolia, this would require more than doctrinal adjustment. It would demand a cultural shift—from obedience to initiative, from hierarchy to intent, from control to resilience.

Iran complements its internal resilience with an external strategy of horizontal escalation, expanding the battlefield across domains and geographies to impose costs on adversaries. Mongolia cannot replicate this model directly; it lacks proxy networks, regional reach, and the geopolitical posture to project force outward in the same way. But the underlying logic still applies. A state that cannot win symmetrically must change the structure of the conflict. It must transform a localized confrontation into a broader strategic problem. For Mongolia, this means leveraging what it does have: its geographic position between two great powers, its critical mineral resources, and its well-developed “third neighbor” diplomatic framework.

In practice, this could involve rapidly engaging international institutions, invoking multilateral agreements, and mobilizing economic and diplomatic stakeholders to raise the cost of escalation for any adversary. The objective is not escalation for its own sake, but rather expansion of the cost calculus. The question is not how Mongolia can defeat a stronger adversary. It is how Mongolia can ensure that conflict with it cannot remain contained. In other words, a conflict involving Mongolia must become international before it can be contained.

But there is a catch—and it is here that history offers a warning.

Operation Valkyrie (German: Unternehmen Walküre) was not originally a coup plan, but a World War II German contingency plan, designed for the Territorial Reserve Army to restore order in the event of internal unrest—whether caused by Allied bombing or uprisings among forced labor populations. In other words, it was a continuity mechanism: a system designed to preserve state control under crisis conditions. Its vulnerability lay in its strength. Authority had already been pre-delegated, orders were pre-written, and chains of command were pre-established. This made the system efficient, but also exploitable.

A group of insiders, led by Claus von Stauffenberg, was able to attempt to redirect that system following the failed assassination attempt of Adolf Hitler on July 20, 1944. The plan ultimately collapsed, but the lesson remains clear: any architecture designed to function without central control is also susceptible to manipulation without central control. Iran mitigates this risk through ideology, parallel institutions, and internal surveillance. Mongolia will not—and should not—replicate those mechanisms. But it cannot ignore the underlying problem.

In other words, this is not an argument against decentralization. It is an argument about how to design it. Any decentralized system must still be a coherent system. For Mongolia, this means that resilience design must include:

Robust authentication of orders under degraded conditions
Clear boundaries on delegated authority
Redundant but cross-checking chains of command
Institutional trust and professional norms strong enough to substitute for ideology
In other words, the system must be able to survive not only decapitation, but impersonation. The core insight Mongolia can draw from Iran then is not tactical, but philosophical. Most states design their systems to function when things go right. Even contingency planning often assumes partial disruption within an otherwise intact framework. Iran designs for failure—systemic, cascading, and immediate. This does not make it invulnerable, but it does make it difficult to collapse quickly. For Mongolia, the challenge is not to emulate Iran wholesale. The political, cultural, and geopolitical contexts are too different. But the underlying design principles are transferable:

Fragment the system deliberately to avoid single points of failure
Pre-authorize action to ensure continuity under disruption
Expand conflicts beyond the immediate battlespace
Balance autonomy with safeguards against internal misuse
Above all, it requires abandoning the illusion that the state can be protected by protecting its center.

The steppe is not a fortress. It never has been. Its strength has always been in dispersion, mobility, and endurance. The question is whether Mongolia’s modern institutions are prepared to rediscover that logic deliberately—or whether they will be forced to rediscover it under fire.

By Siamak Naficy

Siamak Tundra Naficy is a Senior Lecturer in the Department of Defense Analysis at the Naval Postgraduate School. An anthropologist by training, he brings an interdisciplinary perspective to the study of strategic culture, conflict resilience, and the human dimensions of security. His work draws from both naturalist and classical realist traditions, emphasizing how power, interests, the history of ideas, and human nature shape conflict. His research interests span conflict theory, wicked problems, leadership, sacred values, cognitive science, and animal behavior—viewed through an anthropological lens. The views expressed are his own and do not represent those of the Department of Defense, the U.S. Navy, the U.S. Army, or the Naval Postgraduate School.

Mongolia plans to advance cooperation with France to strategic partnership level www.akipress.com

Prime Minister of Mongolia Nyam-Osor Uchral received Ambassador of France to Mongolia Corinne Pereira on May 11, mono.mn reported.

During the meeting, Prime Minister N. Uchral emphasized that France is one of Mongolia's "third neighbors" and a close and trusted partner in Europe. He noted that strengthening mutually beneficial cooperation with France — a permanent member of the United Nations Security Council and one of the founding members of the European Union — is one of the key objectives of Mongolia's foreign policy.

The Prime Minister highlighted that bilateral cooperation has expanded rapidly in recent years and reaffirmed Mongolia's commitment to elevating relations with France, built on mutual trust and shared values, to the level of a strategic partnership.

He also stressed that Mongolia's position remains unchanged regarding the implementation of the National Satellite Network Project in cooperation with France. The Prime Minister expressed appreciation for the decision to fully finance the project through concessional loans from the French side. He added that the government is preparing to take several related measures by June this year and submit them to the Parliament for approval.

Ambassador Corinne Pereira reaffirmed France's commitment to further strengthening bilateral relations and cooperation, noting that the French side attaches great importance to advancing Mongolia–France relations to a strategic partnership level.

During the meeting, the two sides also exchanged views on a wide range of issues, including the significance of the investment agreement signed between the Government of Mongolia and Orano Mining, the initiative to establish the French Development Agency in Ulaanbaatar, the project to establish a Regional Air Traffic Control Center, and comprehensive projects to combat desertification

Government Launches First Renewable Energy Bidding Process for Solar, Battery Projects www.montsame.mn

The Government of Mongolia has adopted a resolution on reducing fuel and energy dependence aimed at lowering reliance on imported fuel and energy, meeting the growing electricity demand in the central region through domestic renewable energy sources, and supporting the stable operation of the energy system.

Under the resolution, solar power plants combined with battery energy storage systems will be developed at five locations across the country. The projects include 50 MW solar power plants and 30 MW/100 MWh battery storage facilities in Sumber soum of Gobisumber, Saikhan-Ovoo soum of Dundgobi, Orkhon soum of Bulgan, and Kharkhorin soum of Uvurkhangai aimag. In addition, a 20 MW solar plant and a 15 MW/40 MWh battery storage system will be constructed in Kherlen soum of Khentii aimag.

The renewable energy facilities are scheduled to be commissioned before the winter peak demand period, with completion targeted by December 1, 2026.

The projects will not be financed through the state budget. Instead, the Government has announced Mongolia’s first competitive bidding process in the renewable energy sector aimed at supporting national companies and businesses. The tender process will be conducted openly, transparently, and online. The Ministry of Energy has published the auction notice on its website, with registration open until June 15.

Prime Minister Uchral Nyam-Osor met with officials of the Ministry of Energy on May 12 to review progress on the implementation of the government resolution. He emphasized that Mongolia, as a country with vast renewable energy potential, should make full use of its opportunities and instructed officials to ensure the solar power projects are completed within the planned timeframe.

Direct Flights Between Astana and Ulaanbaatar to Launch in June www.montsame.mn

Direct flights between Astana and Ulaanbaatar will begin operating in June. The route will be operated by SCAT Airlines, an international airline that has maintained stable operations since 1997.

According to the Tourism Professional Association of Mongolia, the launch of the new route reflects the implementation of agreements reached during the state visit of President Khurelsukh Ukhnaa to Kazakhstan aimed at expanding bilateral cooperation between the two countries.

The opening of direct Astana–Ulaanbaatar flights is expected to strengthen people-to-people exchanges, business partnerships, and tourism flows between Mongolia and Kazakhstan. The new route will also improve travel conditions and create opportunities to elevate regional cooperation and economic relations.

The regular flight schedule will operate as follows:

Tuesdays: Astana–Ulaanbaatar, 23:40–06:15

Wednesdays: Ulaanbaatar–Astana, 07:30–09:00

Fridays: Astana–Ulaanbaatar, 21:10–03:30

Saturdays: Ulaanbaatar–Astana, 04:30–06:00

TMK Energy reports increased gas output at Mongolian operations despite setbacks www.petroleumaustralia.com.au

TMK Energy Ltd. has announced that daily gas production continues to increase at its Mongolian operations despite technical hurdles.

The company has reported an average daily gas production of 663 cubic metres per day for the month.

This represents a 13 per cent increase over February’s figures and stands as the second-highest monthly rate on record for the project, surpassed only by a spike in March.

A major driver of this performance is the LF-07 well, which continues to see increasing gas rates following a period of managed curtailment.

Operators are currently balancing pump speeds and fluid levels to return the well to its peak performance without compromising the reservoir’s long-term integrity.

TMK CEO Dougal Ferguson said: “Gas production continues to be a focus, but ensuring we are positioned for much higher production in the coming months is of equal importance.

“Our immediate focus is the upcoming pilot well drilling program, as well as the important need to have the beneficial use of gas initiative in place as soon as possible, to not only reduce the flaring of gas, but also to lock in our own permanent power supply for the pilot project.”

To ensure technical excellence, TMK recently completed an independent technical review (ITR). The review, which included global coal seam gas (CSG) experts, validated the current reservoir management plan while identifying new optimisation techniques to be trialled in both new and existing wells.

The company is also prioritising the beneficial use of its gas to solve local infrastructure issues. Currently, short-term power outages have disrupted continuous production.

By utilising produced gas to generate permanent on-site power, TMK aims to eliminate flaring, stabilise operations, and potentially provide excess electricity to local Mongolian users.

Broader discussions with the Mongolian government and private consortiums indicate growing interest in the Gurvantes XXXV Project as a solution to the nation’s energy shortages.

TMK continues to work closely with the Australian Embassy and Austrade to promote Australian CSG expertise within the region.

When 1,500m of fencing was removed from the Trans-Mongolian Railway, a long-lost animal reclaimed its native lands www.discoverwildlife.com

East of the Trans-Mongolian Railway, hoofbeats now compete with the sound of trains rumbling down the tracks. Long excluded from this region of the Gobi Desert, the khulan (Equus hemionus) is making a comeback.
 
The Trans-Mongolian Railway was constructed between 1940 and 1956. To reduce the likelihood of livestock collisions, large stretches were fenced. This had the unintended effect of reducing wildlife movement as well. The khulan was last seen east of the railway in the 1950s. 

“This fragmentation effectively isolated habitats east and west of the railway, preventing the khulan from accessing seasonal grazing areas, water sources and dispersal routes,” said lead author Buuveibaatar Bayarbaatar, a senior scientist with Wildlife Conservation Society (WCS) Mongolia.

“Over time, this loss of connectivity likely contributed to the disappearance of khulan east of the railway by limiting recolonisation opportunities and reducing long-term population resilience.”

In 2019, a conservation initiative led by WCS Mongolia led to the removal of some 1,500m of fencing between May 2019 and December 2021. The fencing was later replaced due to livestock-related train delays and collisions. The khulan appear to have availed themselves of these temporary passages, though. Surveys found four groups of the wild asses east of the railway in 2024 – totalling 384 individuals. 

Additional observations noted that khulan also cross at informal gaps in the fences, indicating a need for continuous access to the eastern regions. The conservationists visited one such site in Dornogovi Province and installed camera traps. 

“Many khulan attempted to use it, particularly during harsh winters when animals were searching for forage and better conditions,” Bayarbaatar claimed.

What's the difference between zebras and horses?
WCS worked with Mongolian government and railway authorities to institute a safe passage zone at the Zamyn-Üüd border crossing in May 2025. However, the animals may encounter new challenges in this territory.

“In some areas, local communities and authorities have had little prior experience with khulan, creating risks of disturbance, or illegal hunting, particularly where awareness of the species’ protected status is limited,” Bayarbaatar said. “Competition around water and pasture resources with livestock may also emerge, especially as eastern areas can be more vulnerable to drought and have fewer places where khulan can access water.”