MONGOLIA’S MINING WEALTH AND ITS EXPANDING INCOME GAP
Mongolia's economy exploded in the 2010s as foreign investors and mining giant Rio Tinto began exploiting the country’s huge and largely untapped reserves of coal, copper and gold. At the same time corruption has also rose, soared. The Mongolia economy grew by 17.3 percent in 2011 thanks to a booming mining sector, but on Transparency International’s corruption perception index the country regressed from 116th place to 120th in 2011. Sumati Luvsandendev, the director of a polling organization in Ulaanbaatar, told the Guardian: "Our society worries that things are not going that well in terms of social justice, that there is a growing gap between rich and poor, and that there is an oligarchic class."
AFP reported: “Although foreign investment has quadrupled to nearly $5 billion, the least well-off among Mongolia's 2.8 million people often complain that they are reaping few benefits of the boom. "I don't think any of the ruling political parties have shown the ability to handle the the big miners," said Amitan Ulam-Undrakh, a herdsman from the south of the country. "I want to choose a party who has a clear idea on the coexistence of mining and the wider economy. Not a party that will just focus on the mining industry." [Source: AFP, June 29, 2012 ^^^]
“The enormous sums pouring into Mongolia have also led to accusations of large-scale graft levelled against political figures including former president Nambar Enkhbayar, who was charged with corruption in 2012. But the ruling Mongolian People's Party (MPP) and the main opposition Democratic Party, which have shared power in recent years, both insist they can ensure a fairer distribution of wealth across the vast nation. ^^^
Li Narangoa of Australian National University wrote: “While the mining boom is bringing great wealth to the country, it is also creating social inequalities. The wealth is not distributed evenly across the country, but remaining with the small number of people who hold power. The sudden shift from a closed and planned socialist economy to a free market economy occurred without a transparent system of government, and the potential wealth from resources has accelerated corruption in the country. Thus, those with money have become powerful and those with power have accumulated more wealth. The poor have become even poorer because there was no adequate welfare system to look after them after the collapse of the communist system. The presence of foreign mining companies creates another layer of inequality, because local employees are paid less than their foreign (Western) peers for the same job. Mongolian people also consider it unfair that foreign companies own so much of the strategically important copper and gold mine, Oyu Tolgoi, and feel threatened by the possibility that Mongolia might lose its resources to foreign companies, especially to China. [Source: Li Narangoa, eastasiaforum.org, July 10, 2012 <=]
“The new government will face many social and economic challenges, including distributing wealth equitably across the nation, and using the revenue gained from the mining sector to build a sustainable welfare system, infrastructure and education. Developing the mining industry while promoting the Mongolian traditional pastoral economy and tourism will also be an important issue in years to come. Stamping out corruption and creating a transparent government are crucial to building the sustainable democracy that will maintain Mongolia’s reputation in the world amid growing resource nationalism and the growing economic and political influence of its two neighbours.” <=
Mining Deals and Mongolian Politics
Mongolia is in dispute with Anglo-Australian mining giant Rio Tinto over how it will repatriate profits from the giant Oyu Tolgoi gold and copper mine. Controversial new mining bills have been championed by Mongolia’s major parties and leaders.
William MacNamara wrote in the New York Times, “In October 2009, Rio Tinto and Ivanhoe Mines, a Canadian exploration company, negotiated a deal with the Mongolian government about developing Oyu Tolgoi, the crown jewel of the country’s mining sector and the world’s biggest new source of copper. The copper and gold mine would cost more than $10 billion to build, and the potential investors wanted assurances. Under the so-called Oyu Tolgoi Investment Agreement, taxes and royalty payments to the government would be fixed for 30 years. At the time, it was considered “the initiation of a new stage in Mongolia’s history,” said Oliver Belfitt-Nash, an analyst at Monet Capital, a Mongolian investment bank. [Source: William MacNamara, New York Times, December 10, 2012 <|]
“Rio Tinto spent billions of dollars to buy out Ivanhoe’s stake in the project and build the Oyu Tolgoi mine. Investors followed, encouraged by the cooperation between a multinational corporation and a coalition government. Some investors financed smaller mines. Others imported mining equipment or Hummers to sell to newly minted millionaires. Skyscrapers rose in central Ulaanbaatar.” <|
Terrence Edwards of Reuters wrote: “Resource-rich Mongolia is in the middle of a mining boom that is set to transform its tiny economy, but political uncertainties have threatened to overshadow its efforts to attract the foreign investment needed to develop mines and build vital infrastructure.” Parliamentary elections in June 2012 “left more than a quarter of parliament in the hands of politicians who advocate local control of mines. Investors said the latest episode could worsen the political gridlock and increase uncertainty for foreign investors. Key decisions pending for major mining projects, such as the development of the massive Tavan Tolgoi coal mine, may also be delayed. [Source: Terrence Edwards, Reuters, August 3, 2012 -]
The Mongolian Democratic Party heads a coalition government keen to regulate foreign investments. Mongolian president Tsakhiagiin Elbegdorj is a free-market advocate, but his government has increasingly adopted a more "resource nationalist" approach, with laws to give the country a bigger stake in "strategic assets", such as mines. It also aims to rework a landmark 2009 investment pact to develop the massive Oyu Tolgoi copper and gold mine. [Source: Reuters, June 27, 2013]
Nambaryn Enkhbayar, who served as president of Mongolia from 2005 to 2009 but was jailed for corruption in 2012, called for the $13 billion Oyu Tolgoi copper and gold mine project with Ivanhoe Mines to be renegotiated to grant better terms to the government, and also wants to keep the coveted Tavan Tolgoi coal mine, potentially one of the world's biggest coal suppliers, in local hands. Rio Tinto has a majority stake in Ivanhoe and has full operational control over the Oyu Tolgoi mine, which was due to start production in 2012. -
Mongolian People's Revolutionary Party (MPRP) Versus Mongolian People's Party (MPP)
In 2010, the Mongolian People's Revolutionary Party (MPRP) — the Communist Party that had ruled Mongolia during most of its existence as and independent country — voted to retake the name of the Mongolian People's Party (MPP), a name it used in the early 1920s. Shortly thereafter, a new party was formed by former president Nambaryn Enkhbayar, which confusingly adopted for itself the MPRP name.
The Mongolian People's Revolutionary Party (MPRP) used to refer to Mongolia’s long entrenched Communist Party. In March, 1920, the Mongolian People's Party was formed. It established links with the Communist International and Soviets a few months later. Mongolia won its independence in 1921 with Soviet backing and a communist regime was installed in 1924. August 1924, the Mongolian People's Party becomes Mongolian People's Revolutionary Party.
The MPRP led Mongolia under communism until 1990, when it ended one-party rule after street protests, but was elected into office in 1992. In 1996, the Communists (MPRP) were unexpectedly ousted after being in power for more than 70 years. They returned to power in the parliamentary elections in 2000
The Mongolian People's Party reverted to its original pre-1924 name ("Mongolian People's Party", without the word "Revolutionary") in 2010. The new Mongolian People's Revolutionary Party was created in 2010, when its whose members split from the original party after the name change. The party is led by Enkhbayar, who for all intents and purposes kicked out of the MPP after serious corruption allegations were made against him.
In the 2010, the distribution of mining wealth became a major political issue. The Democratic Party said it would create a fund to distribute mining profits evenly throughout society, including via pensions. The MPP — Mongolia's oldest party — made similar promises although also without giving much detail. "We will have a national sovereign wealth fund created that would benefit the people equitably," an MPP spokeswoman said. "We will also support seriously education and health systems, which would contribute to the quality of life of the ordinary people." [Source: AFP, June 29, 2012 ^^^]
The MPP was hurt by the acrimonious split with Enkhbayar, who broke away from the party to form his own organisation. He was barred from standing for a seat in parliament amid the fall-out of a corruption scandal. Enkhbayar denies any wrongdoing and despite the fact he cannot personally run. ^^^
Enkhbayar Arrested and Jailed
In April 2012,Nambaryn Enkhbayar, the president of Mongolia from 2005 to 2009 and one of the country's best-known politicians, was detained on corruption charges, triggering clashes between police and supporters. AFP reported: “Enkhbayar has been charged with several misdemeanours, including mis-using television equipment donated to a monastery to set up a television channel, Mongolia's anti-corruption agency said at a news briefing. The raid on his house early Friday morning was televised, as Enkhbayar was able to call journalists and TV crews to his home when it took place. [Source: AFP, April 14, 2012 ^^]
“Dramatic video footage posted on media websites showed hundreds of policemen forcing their way into his house and clashing violently with his supporters. The former president told TV9 -- a 24-hour television channel that was present at the time -- that he refused to give any form of testimony. He also claims that police are violating his immunity. ^^
“Enkhbayar's arrest has prompted strong support among members of his political party -- the Mongolian People's Revolutionary Party (MPRP) -- and the local population, some of whom protested Friday outside his detention centre. Supporters claim that he may be being punished for information he has about deadly riots that took place in 2008, when he was still president of the impoverished country. ^^ Enkhbayar was hospitalized after refusing water for 10 days to protest his detention on corruption charges. He ended his hunger strike after bail was granted. Enkhbayar and his family said his arrest last month, on charges dating as far back as 2000, was an attempt by the government to keep him from running for parliament. [Source: Bloomberg, May 14, 2012]
Enkhbayar was sentenced to two and a half years in jail for corruption. The sentences was reduced form four years. In August 2012, after the initial sentencing, Terrence Edwards of Reuters wrote: “A Mongolian court has jailed former president Nambaryn Enkhbayar for four years for corruption, a move that could threaten the government's fragile coalition and increase uncertainties for foreign investors. After a three-day trial, Enkhbayar was found guilty of charges that include the illegal privatization of a hotel and newspaper and the misuse of donated television equipment to broadcast from his own television station. The court also ordered Enkhbayar to pay more than 54 million tugriks ($40,000) in damages. [Source: Terrence Edwards, Reuters, August 3, 2012 |::|]
“Enkhbayar, whom some Mongolians see as a fighter for common people, has called the charges groundless and politically motivated, according to local media reports. His lawyers said he will appeal against the sentence. Although Enkhbayar was barred from taking part in the elections, he remains as the chairman of the MPRP, which won the third-largest block of seats in parliament in July 2012. Enkhbayar has called for the $13 billion Oyu Tolgoi copper and gold mine project with Ivanhoe Mines to be renegotiated to grant better terms to the government, and also wants to keep the coveted Tavan Tolgoi coal mine, potentially one of the world's biggest coal suppliers, in local hands.” |::|
2012 Parliamentary Elections in Mongolia
In June 2012, parliamentary elections were held in Mongolia. A total of 544 candidates from 11 parties and 2 coalitions contested for seats in the 76-seat parliament. The Democratic Party received the highest number of votes and seats (35 percent of the vote and 34 seats), followed by the former ruling party, the Mongolian People’s Party (31 percent of the vote and 26 seats), and the Justice Coalition (11 seats). The Civil Will–Green Party won two seats and independent candidates won three seats. [Source: Li Narangoa, eastasiaforum.org, July 10, 2012; Li is Professor at the College of Asia and the Pacific, the Australian National University.]
Li Narangoa of Australian National University wrote: “The 2012 election was epoch-making in many ways for Mongolia, which recently implemented new election laws. For the first time in its history, Mongolia used an electronic voting system to avoid the fraud that had previously occurred during the manual counting process. These measures were meant to achieve an efficient and fair election, but technical problems defeated the hopes of efficiency. The Mongolian People’s Party and eight other small parties petitioned to recount the votes manually, insisting that the traditional system of manual counting would be more accurate. The request seems to stem from their dissatisfaction about the electoral success of the Democratic Party.
Concerns about the income gap and the distribution of mining wealth “were on the minds of voters. The participation rate was at an historical low of 65 per cent. While this shows people’s cynicism about party politics, there is hope that these inequalities will be reversed by having less corrupt leaders. The election campaigns reflected these concerns and the parties variously promised to spread the wealth nationwide and bring about a better quality of life.
Associated Press reported: “The opposition Democratic Party edged out Mongolia's ruling party in a tightly contested legislative election that centered on how best to use the wealth generated by the still poor but fast-developing country's mining boom. The party won 20 of the 48 seats awarded by outright majority, compared with 15 for the ruling Mongolian People's Party and fewer seats for two other parties. Under a new system, the remaining 28 seats are awarded based on the parties' proportion of the overall vote, giving the Democrats a commanding but not a decisive edge in the new parliament. A coalition government between the major parties or with smaller parties would likely perpetuate slow policy-making and partisan bickering that has characterized Mongolia's fledgling democracy. [Source: Associated Press, June 29, 2012 \=/]
“The Democrats and MPP each campaigned on promises that they would use revenues generated by mining mammoth, estimated trillion-dollar reserves of coal, copper and gold to create jobs and narrow a rich-poor gap. The Democrats characterized the MPP as captives of the rich and foreign mining interests. Along the way, a still popular ex-president split from the ruling party only to be arrested on corruption charges. Still, Enkhbayar Nambar's splinter party in league with another minor party took third place, potentially making him a factor in forming the new government.” \=/
To avoid problems that arose in the 2008 parliamentary elections, “the government introduced the mixed system of awarding seats by majority vote and by proportion. It also imported electronic voting machines, though the parties also wanted votes counted by hand. The announcement of results was delayed after the MPP asked for a recount in some districts due to discrepancies between votes tallied by machine and by hand. Mindful of the violence in 2008, ruling party politicians struck a measured tone in doing so, saying they would abide by the law, even as they asked for the recount. "The election should run according to laws. The party election committee has complaints regarding vote counting and we are addressing the issues," said Prime Minister Sukhbaatar Batbold, the ruling party chairman. “ \=/
Political Struggle After the 2008 Parliamentary Election
Following the 2012 parliamentary elections, a coalition of four political parties was formed but then dissolved in November 2014 when Prime Minister Altankhuyag was voted out of office. A new five-party grand coalition was formed in December 2014 under the leadership of Prime Minister Saikhanbileg.
A month after the parliamentary election, The Economist reported: “The month-long wrangle over the make-up of Mongolia’s new governing coalition is almost over. It was announced on July 19th that the Democratic Party (DP), which has 31 of the parliament’s 76 seats and is the party of the current president, will rule in coalition with several smaller parties that have a total of 11 seats. They replace a coalition led by the Mongolian People’s Party (MPP), the main heir of the Mongolian People's Revolutionary Party. The transfer of power marks only the second time the MPP will have been out of direct control in its 90-year history. The June 28th election may have left no party with a majority, but Mongolian politicians can at least take comfort in the fact that it didn’t turn violent: the previous poll in 2008 was marred by several days of post-election rioting that left five dead and millions of dollars in damage. [Source: The Economist, July 30, 2012 ^|^]
“Notable among the challenges facing the coalition is how to deal with the rise of resource nationalism. Many Mongolian politicians want the lucrative mining contracts signed with foreign companies to be renegotiated in the government's favour. According to Dale Choi of Origo Partners, a private-equity company, 25 members of parliament can be classed as “resource nationalists”. They include Nambariin Enkhbayar, the ex-president who is on trial for alleged corruption and who leads one of the smaller parties in the coalition, called, confusingly, the MPRP. Mr Enkhbayar’s presence in the ruling coalition provides an unusual twist. Having accused opponents of waging a politically motivated legal campaign against him, he has not ruled out running for the presidency again in the future, and has been vocal about changing the country’s stake in mining contracts.^|^
“According to Luvsandenvev Sumati of the Sant Maral Foundation, a polling firm, Mr Enkhbayar is not a danger to Mongolia’s sitting president, Tsakhiagiin Elbegdorj, in next year's presidential election, “since the coalition agreement states that they will have a single candidate representing all three parties”—and that is likely to be the incumbent. Mr Enkhbayar could, however, be a danger to relations with the big foreign mining companies such as Ivanhoe and its largest shareholder, Rio Tinto, if his stance on natural resources turns out to be anything other than political posturing. ^|^
“The new coalition will also need to find a better way to distribute Mongolia's mining wealth. Many voters, especially those in the shanty town of "gers"—felt tents—north of the capital, believe too much goes to line the pockets of the powerful, at the expense of the population at large. “This was an election where people actually tried to change the political establishment,” says Mr Sumati in reference to the rise of smaller parties challenging the DP and the MMP. Voters, it seems, were fed up with what they saw as parties only helping those with influence. ^|^
“Following the announcement of the new coalition, the MMP’s main policy-making body, its governing committee, resigned en masse. “They lost the presidential election last time, and now the parliamentary one," says Mr Sumati. "This is a party used to being attached to state machinery so they must feel something is not working for them.” ^|^
Elbegdorj Reelected President in 2013
Mongolia's incumbent president,Tsakhia Elbegdorj, was reelected in Mongolia’s June 2013 presidential elections. Reuters reported: Elbegdorj who wants more controls on foreign mining investments, emerged as the winner with a narrow majority of votes cast. Elbegdorj, 50, who has served as president since 2009, was the overwhelming favorite in the contest, played out amid worries about Mongolia's faltering economy as well as the growing role of foreign mining firms.” Elbegdorj got 50.23 percent of the votes, beating Bat-Erdene Badmaanyambuu, a renowned national wrestling champion and a three-term member of parliament from the former ruling party, the Mongolian People’s Party (MPP). The other was Mongolia’s first female candidate for the presidency, Natsag Udval of the Mongolian People’s Revolutionary Party (MPRP), which splintered from the MPP in 2011. She is the nation’s health minister, and a close ally of Nambariin Enkhbayar. Bat-Erdene received 42.5 percent of the vote and Udval 6.6 percent, according to the Mongolian election commission. [Source: Reuters, June 27, 2013 ; The Economist, June 29, 2013]
“The lower-than-expected margin of victory could be traced to low turnout, said Julian Dierkes, an expert in Mongolian politics at the University of British Columbia, adding that participation was 10 percent lower than the last election. "The consensus was that Elbegdorj was winning and I suspect that a lot of potential voters thought he was winning anyway, and didn't vote," said Dierkes.
“The win preserves the dominance of the Mongolian Democratic Party, which won the most seats, though not an absolute majority, in last year's parliamentary vote, and heads a coalition government keen to regulate foreign investments. Elbegdorj is a free-market advocate, but his government has increasingly adopted a more "resource nationalist" approach, with laws to give the country a bigger stake in "strategic assets", such as mines. It also aims to rework a landmark 2009 investment pact to develop the massive Oyu Tolgoi copper and gold mine.
“The vote took place amid rising concern over Mongolia's resource-dependent economy, with falling commodity prices and weakening demand from China expected to erode growth and undermine spending plans. "The biggest implication is continuity -- his campaign was that he had done well for four years and wanted a chance to do more," said Dierkes. "But mining and resources is on the top of everyone's agenda and here he will keep going."”
The Economist reported: “Voting is no longer exotic. Since throwing off Soviet domination and embracing democracy 23 years ago, Mongolians have got used to electing their leaders. But their sixth free presidential election, marked something of a departure from the high drama of earlier contests. This time there was less acrimony, less campaign buzz, and lower voter participation...Foreign investors are conscious that, in a campaign marked by appeals to resource nationalism from all three candidates, the president’s was the most moderate voice. They, at least, will be relieved at his victory. [Source:The Economist, June 29, 2013]
Democrats Take Control of the Mongolian Government
The Economist reported: “Mr Elbegdorj’s victory cements the DP’s political dominance, giving it control of the presidency, the prime minister’s office and the parliamentary speakership. That dominance will probably last until the next parliamentary election in 2016. Oyungerel Tsedevdamba, a DP member of parliament representing a district in the south of the capital, Ulaanbaatar, said that since her party had only ever enjoyed such control for two single-year stints during the 23 years of democratic rule, it now had an unprecedented opportunity. “The DP finally has the chance to show what it can do. For the first time we will really be allowed to implement our programme,” she said. [Source: The Economist, June 29, 2013 ^*^]
“That programme features promises that were also touted by the other candidates, on issues that are widely recognised by businessmen and development experts in Mongolia and abroad as most important to the nation’s future. These are the management of the vast mining and resource boom, improvements in transport and power infrastructure and coping with the stubborn prevalence of corruption. ^*^
“Another highly touted initiative of Mr Eglbegdorj’s party has been the decentralisation of budgeting decisions. Julian Dierkes, a Mongolia analyst at the University of British Columbia, says moves to devolve spending decisions to province- and county-level authorities have been very popular in rural areas and certainly boosted votes for Mr Elbegdorj. ^*^
“But some in the defeated MPP worry that the concentration of power in the hands of the DP, along with the term limit that prevents Mr Elbegdorj from standing for the presidency again, could prove dangerous. They worry he might engage in an unhealthy attempt to use the presidency’s judicial powers to mount politically motivated corruption investigations. Political rivals have reason to worry.” ^*^
Mongolia’s Stalled Mining Deal
The Economist reported: “The biggest emblem of Mongolia’s stalled development is the Oyu Tolgoi (OT) copper and gold mine in the Gobi desert. Rio Tinto, a mining giant, has invested more than $6 billion in the project but has been frustrated by repeated, highly politicised efforts by the Mongolian authorities to restructure the terms of their investment agreement with Rio’s subsidiary. Twice in recent weeks the government has delayed the mine’s inaugural shipment of copper. Moody’s, a large ratings agency, warns that the delay “lowers investor confidence and underscores institutional weaknesses” in Mongolia. [Source: The Economist, June 29, 2013 ^*^]
“Olivier Descamps, a managing director of the European Bank for Reconstruction and Development with responsibility for Mongolia, sees hopeful signs that the country is improving transparency but says the OT mine “is the ultimate test” of Mongolia’s ability to prove itself a reliable long-term partner for foreign investors. ^*^
“Hopes run high that the DP’s victory will put an end to political squabbling over such projects. A new foreign-investment law has long been stalled. But, as he voted, Mr Elbegdorj predicted that its progress will be quicker after the election. “In the coming autumn session of parliament,” he said, “I hope you will have that law.”“ ^*^
The Financial Times reported: “Mongolia’s economic problems are increasing its dependence on China, and to a lesser extent Russia, despite attempts during the commodities boom to forge new ties by attracting investment from further afield. Neither the MPP or DP have an easy fix for Mongolia’s economy. Previous promises to increase social spending and government salaries are running up against budget limits, while the banking sector is heavily exposed to mining and related industries. [Source: Lucy Hornby, Financial Times, November 21, 2014]
“Foreign investment has plummeted thanks to falling prices for Mongolia’s main exports, copper and coal, as well as a longstanding dispute between the government and mining group Rio Tinto over the terms of investment in the $5bn underground stage of the Oyu Tolgoi mine. In November 2014, Rio Tinto replaced two of the most senior executives in its Mongolian operations. Kay Priestly and David Klinger were chief executive and chairman respectively of Turquoise Hill, the Canadian-listed subsidiary that controls two-thirds of Oyu Tolgoi. Priestly also headed coal miner SouthGobi Resources, which delayed payment of $8.1 million in interest on a convertible debenture owed to China Investment Corp, the sovereign wealth fund. CIC already owns 16.5 per cent of the company.”
Mongolia's Parliament Votes to Dismiss Premier
In November 2014, Mongolia's parliament voted to dismiss the prime minister, who has been under fire for alleged corruption within his administration and who faced criticism for drastically slower economic growth. The ruling Democratic party has been under siege by the MPP since the decision in August by Prime Minister Norov Altankhuyag to consolidate the number of ministries in Mongolia from 16 to 13. The DP has also been affected by damaging internal squabbling. Rinchinnyam Amarjargal, a Russia-educated democracy activist who briefly served as prime minister in 1999, was one of eight DP members who backed the opposition’s no-confidence vote against Mr Altankhuyag.
Ganbat Namjilsangarav of Associated Press wrote: “The parliament voted 36-to-30 to dismiss Prime Minister Altankhuyag Norov, leaving a deputy prime minister temporarily in charge and handing the fractured ruling party and its allies the task of negotiating a replacement. The move undermines confidence in the Mongolian economy among international mining companies and other major investors in Mongolia. [Source: Ganbat Namjilsangarav, Associated Press, November 5, 2014]
"The prime minister even has lost confidence of his own party lawmakers," said Amgalanbaatar Dagdandorj, a political analyst and head of a research firm. "Those close around Prime Minister Altankhuyag have been arrested and investigated by the anti-corruption agency for various shady deals and public confidence in him as an honest prime minister has decreased," he said. The country's anti-corruption agency is investigating one of Norov's senior aides, former Environment Minister Gansukh Luumed, over alleged embezzlement of coal subsidies earmarked for impoverished residents of the Mongolian capital. Norov's critics also accuse the ex-prime minister of nepotism and allowing relatives to enrich themselves through government contracts.
Norov also drew criticism for the country's slowing economic growth, from 17.5 percent two years ago to the current 6.3 percent. Foreign investment in Mongolia has fallen sharply as negotiations between the government and mining giant Rio Tinto have dragged on over financing for the development of a major underground copper and gold mine, the Oyu Tolgoi mine. The ruling Democratic Party of Mongolia must form a new Cabinet within 14 days under Mongolian law. However, that will be a daunting task because the party has been riven with factional fighting over Norov. Some members of the party broke ranks and joined opposition parties in voting for his dismissal.
Two weeks later Mongolia’s parliament elected a new prime minister. The Financial Times reported: “Saikhanbileg Chimed, cabinet secretary for the previous prime minister, was elected by 44 of 46 members of the parliament, although another 32 parliamentary members from the opposition Mongolia People’s party boycotted the election. In a speech, Saikhanbileg said he would seek a $1 billion soft loan from China, promised a rouble swap with the Russian central bank by January and settle fuel import payments in roubles, according to a summary provided by Independent Mongolian Metals & Mining Research, a consultancy. The proposals follow Beijing’s move in August to expand a swap agreement with Mongolia from Rmb10 billion to Rmb15 billion, which helped stabilise the currency, the tugrik. [Source: Lucy Hornby, Financial Times, November 21, 2014]
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Last updated April 2016