Enkhbayar is a proponent of both domestic privatization and economic globalization. His administration stresses the importance of international cooperation, both for regional political stability and for the economic opportunities it can offer to this land-locked country. During the 1970s and 1980s, the Soviet Union (which broke apart in 1991) was Mongolia's dominant ally. When the Soviet Union collapsed and Russia experienced grave economic dislocations, Mongolia suffered a loss of foreign aid. As a result, Mongolia's post-communist governments sought to rely less on Russia by reaching out to the West and to other Asian nations, including China and South Korea.
These new relations produced increased trade and investment in Mongolia, further driving the domestic privatization effort. In turn, the newly developed commercial ties have improved diplomatic relations with these trading partners. While it is crucial for Mongolia to have good relations with both Russia and China and to promote foreign investment by both (since the two countries are its sole neighbors), Enkhbayar recognizes the importance of reaching out to nations elsewhere in Asia and throughout the world. Under his leadership, Mongolia overhauled an endangered state bank and brought in foreign management for it, rather than closing it as the World Bank recommended, and saw an increase in the number of jobs and higher salaries as a result. In 2003, Mongolia sold the bank to a Japanese company. This sale brought US $6.9 million to the nation's coffers and will no doubt lead to increased Japanese investment and tourism in Mongolia.
Mongolia's trading partners include China, the United States, Russia, South Korea, and Japan. Enkhbayar has discussed the state of Mongolia's future with other notable heads of state, among them Tony Blair and Chancellor Schröder of Germany. As industrial growth is likely to be a key factor in integrating Mongolia's economy into the global marketplace, direct foreign investment will be key to ongoing modernization efforts.