The Wall Street Journal recently had a very interesting Op-Ed analysis of how resurgent Russia – steadily expanding its influence in Eurasia – may become a strategic challenge to the U.S. in one of the world’s most resource-rich regions. As the piece notes:

“…Russia’s main target of late is Mongolia, one of Asia’s most vibrant democracies. Since first holding elections in 1990, Mongolia has developed a stable electoral system with more than 15 political parties and seen two peaceful handovers of power. Mongolians will vote on June 29 to elect a new parliament. Polls suggest the ruling ex-Communist Mongolian People’s Revolutionary Party, which regained power in 2000, could lose power to the opposition Democratic Party.

Regardless of the election outcome, Mongolia’s relationship with Moscow will take centerstage. Russia’s nationalized oil company, Rosneft, supplies more than 90% of Mongolia’s oil. Over the past three months, it has increased prices twice — by an average of 20% each time. This comes on top of surging prices that, since 2006, have pushed inflation in Mongolia to over 15% annually. Rosneft recently told Mongolian officials that it would “lower” oil prices if given the rights to “run oil production” in the country. Moscow also wants to build 100 gas stations throughout the country, which would solidify its overwhelming presence there and reduce consumers’ energy choices even further.

Similar tactics are afoot in other sectors of Mongolia’s economy. Russian enterprises already own 49% of Mongolia’s national railway and its largest copper and gold mining companies. An industrial group founded by Russian Prime Minister Vladimir Putin wants to consolidate the Russian-controlled shares of all three companies, effectively giving Mr. Putin’s cronies a near-stranglehold on key players in the Mongolian economy. Officially, Mongolian officials express confidence in the benefits of deeper economic relations with Russia. Privately, they admit to feeling pressured into opening up their markets to Moscow, and wish more Western companies would invest.

Despite these misgivings, Mongolian president Nambaryn Enkhbayar visited Moscow last month and agreed to discuss further joint uranium production and nuclear cooperation. New Russian President Dmitry Medvedev stated that bilateral trade will soon exceed $1 billion, cementing Russia’s position as Mongolia’s largest trading partner after China. If these trends continue, Mongolia may become an economic satellite of Mr. Putin’s newly expansive Russia.

The stakes are high for fledgling Asian states, especially democracies, which must balance satisfying Russian demands with proving to their own people that they can protect their independence. If Russia succeeds in blackmailing Mongolia into economic subservience, then it can try to extend this tactic to other Central Asian nations.

Imagine the precedent that would set. China could also decide that painstaking negotiations and diplomacy are a waste of time when it can bring its export and import power to bear. Democratic Japan and South Korea could feel greater pressure to join exclusive trading blocs led by authoritarian regimes. Finally, Mongolia and other states might be asked to make strategic concessions to Russian security forces to “protect” Moscow’s investments. In this way, Russia could gain new opportunities to expand its military footprint beyond its own borders….”