Spotlight on Mongolia’s upcoming UN summit: emergency austerity, travel warnings and queues for fuel

As COP17 opens in Ulaanbaatar on 17 August, a fuel crisis, an emergency austerity drive and a run of corruption scandals are testing the host government’s promise of renewal. 

Five days before it hosts a UN summit on restoring the world’s degraded land, Mongolia has thrown its own government onto an emergency footing. On 6 August, Prime Minister Nyam- Osoryn Uchral announced austerity measures “at all levels” and the suspension of state spending. 

“All events, including regional conferences, sectoral conferences, forums and meetings, will be cancelled,”

he said, with the money saved redirected toward

“winter preparedness, energy and fuel supplies.” 

This is the first such summit held in East and Central Asia and is close to a remarkable spectacle: the host cancelling its own conferences even as it prepared to convene one of the year’s largest. 

Under the banner of “Restoring Land. Restoring Hope.”, delegations from the 197 parties to the UN Convention to Combat Desertification will gather to discuss how to mobilise finance and governance to reverse land degradation. This is particularly relevant to Mongolia which – according to the official host site – is among the countries most affected by desertification, with nearly 77% of its land degraded. 

Local context 

Behind the announcement lies a fuel crisis that has left Ulaanbaatar queuing overnight for petrol. By 5 August, national reserves of petrol had fallen to between 11 and 13 days of consumption, diesel to about 18 and aviation fuel to just ten. With jet-fuel stocks that thin as delegates begin to arrive, the US Embassy in Ulaanbaatar advised Americans to delay or defer non-essential travel – a warning it reiterated on 7 August, citing nationwide shortages and long lines at fuel stations. 

On the streets, the authorities have rationed sales by odd and even number plates, capped a single purchase at 50,000 tögrög – about fourteen US dollars, or roughly 14 litres – and banned the filling of portable containers, even as summer demand runs two to three times higher with peak tourism. By 11 August, officials said Russia had agreed to ship an extra 25,000 tonnes of petrol and 5,000 tonnes of jet fuel by the end of the month – supplies the industry minister said would remove “any need for rationing” – while the state petroleum authority expects the situation to stabilise from mid-August.

A deeper governance test  

The fuel crisis has done more than create inconvenience for delegates, and has thrown a harsh light on the way Mongolia is governed, at a moment when the political weather was already unsettled. Uchral, confirmed in March, is the third prime minister in nine months, and his appointment came amid renewed foreign-investor concern over political instability, frequent policy changes and some degree of a reputation for corruption. 

Mongolia scored just 31 out of 100 on Transparency International’s 2025 Corruption Perceptions Index, ranking 124th of 182 countries and on a consistent downward trend since 2012, and it sits 67th of 143 on the World Justice Project’s 2025 Rule of Law Index. 

That reputation is not abstract. The defining scandal of recent years is the 2022 “coal theft” affair, in which coal was moved illegally across the Chinese border with the involvement of figures around the state miner Erdenes-Tavan Tolgoi, with losses estimated at between $11 and $13 billion. The anti-corruption authority later confirmed that former president Khaltmaagiin Battulga was under investigation, with 35 people charged. 

The public anger has not faded: in May 2025, young Mongolians demonstrated for the resignation of then prime minister Oyun-Erdene over corruption allegations. 

International companies’ hesitancy 

Mongolia’s governance risk is borne by the international companies operating there as well as by its citizens, and several have reported serious misconduct inside their own local operations. It is companies like this that will likely be asked to come to the table and discuss how to help ease the fuel shortage. 

The most public case surrounds Oyu Tolgoi, the vast copper-and-gold mine two-thirds owned by Rio Tinto (coincidentally, a sponsor of the COP17 summit) and a third by the Mongolian state, and the country’s largest foreign investment. In October 2025 its operator confirmed an internal investigation into alleged procurement corruption at the mine; months of parliamentary hearings followed, and in March the then prime minister, Gombojav Zandanshatar, warned Rio that the deal felt as though “the Mongolian people and the parliament are being deceived”. 

The pressure produced results. On 30 June, Rio agreed to cut the shareholder-loan interest rate, and Prime Minister Uchral announced fee and interest reductions the government values at 8.4 billion dollars, with Mongolia’s first dividends due this year. Yet much remains unresolved: the government is still pursuing corruption allegations against Rio in a London-seated arbitration – claims the company calls “unfounded” – and in February the tax authority issued a fresh 1.6-trillion-tögrög reassessment. The risk extends to other companies: Trafigura took a $1.1 billion provision after uncovering serious misconduct in its Mongolian business, where its top local oil trader is reported to have loaned more than $500 million of company money to Lex Oil, a firm owned by his aunt. 

A summit built on the theme of restoration is due to convene in a capital rationing petrol, cancelling its own conferences and fielding fresh questions about how its resource wealth is managed.