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Mongolia: Consolidation of the Mongolian People's Republic, 1925- 28
Country Study > Chapter 1 > Historical Setting > Modern Mongolia, 1911-84 > Consolidation of the Mongolian People's Republic, 1925- 28


Soviet troops ostensibly were withdrawn in March 1925 (although some historians have debated whether all actually departed). Despite the treaty -- between the Soviet Union and China -- that acknowledged Outer Mongolia as an autonomous, but integral, part of China, the Soviet Union explicitly recognized Mongolia's independence of China in internal affairs and its ability to pursue an independent foreign policy. While continuing its cautious relationship with Beijing, Moscow made it clear that it would permit no Chinese encroachment on Mongolia. Mongolia's general foreign policy line was based on strong ties with the Soviet Union, "the reliable pillar of [Mongolia's] independence and prosperity" according to the party line.

Under Moscow's guidance, the leftist leaders of Mongolia began to strengthen their still-weak position. The Mongolian communists, with Comintern help, gradually undermined the rightist elements in the Mongolian People's Revolutionary Party and attacked the power of the two great institutions that had dominated Mongolia for centuries: first the nobles; then, the abbots (whose monastic followers comprised at least one-third of the adult males). In this period of cautious consolidation, the party abolished the aristocracy's feudal privileges, a reform which had the initial effect of influencing wealthy nobles to embark on capitalist ventures, such as investing in the new cooperatives. Gradually, however, the revolutionaries built a state-guided economy supported by Mongolian cooperatives and by Soviet trade.

Moscow's economic hold on Mongolia tightened as exports to the Soviet Union rose rapidly from about 14 percent of Mongolia's total production (chiefly livestock and animal products), in 1923 to 1924, to 85 percent, in 1928 to 1929. By 1929 Mongolia's imports lagged far behind its exports. Aside from the provision of technical and political advisers, Soviet trade policy did not yet provide for economic development aid to newer socialist countries as had been envisioned by Lenin in 1920.

Other areas of the economy showed more progress. The Mongolian National Bank, established in 1924 as a joint Mongolian-Soviet company, issued the tugrik, the new national currency, as part of monetary reform. The cooperative movement, directed by the Mongolian Building Cooperative, began to show impressive results. A standardized tax system was instituted, and other administrative reforms slowly took hold. The army, equipped and trained by the Soviets, was steadily growing and improving The government refrained from a direct attack on the venerated religious establishment, but some higher-level monks were imprisoned and executed.

Although the Mongolian communists had not yet overthrown the conservatives in the government and the economic sectors during this period, they had gained progressively in strength as evidenced by the changes they had made in society had witnessed policy struggles between leftist and rightist elements that presaged the victory of the left.

Data as of June 1989

Last Updated: June 1989

Editor's Note: Country Studies included here were published between 1988 and 1998. The Country study for Mongolia was first published in 1989. Where available, the data has been updated through 2008. The date at the bottom of each section will indicate the time period of the data. Information on some countries may no longer be up to date. See the "Research Completed" date at the beginning of each study on the Title Page or the "Data as of" date at the end of each section of text. This information is included due to its comprehensiveness and for historical purposes.

Note that current information from the CIA World Factbook, U.S. Department of State Background Notes, Australia's Department of Foreign Affairs and Trade Country Briefs, the UK's Foreign and Commonwealth Office's Country Profiles, and the World Bank can be found on

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