Tuesday, July 9, 2013

Strategic Mongolia

On July 10, the eve of Mongolia's National Day, Tsakhiagiin Elbegdorj will be sworn in for his second term as the country’s president. The election was held June 26th. July 11 through 13 is Mongolia's festival of Naadam. In 2010, Naadam was inscribed on the Representative List of the Intangible Cultural Heritage of Humanity of UNESCO.

An emerging democracy squeezed between Russia and China, Mongolia is a strategic conundrum rich in coal, minerals, and rare earths. This situation has made the country pivotal in Asian power and economic calculations. Both Japan and South Korea are working hard to strengthen their relationship with Mongolia. Prime Minister Shinzo Abe visited Mongolia in March and an economic partnership agreement is in negotiation. Abe's his close friend and Minister of Abduction Furuya Keiji is attending the inauguration of the president.  South Korean President Park Geun-hye sent her Senior Secretary for Foreign Affairs and National Security Ju Chul-ki.

Mongolia, with its good relationships with North Korea and Russia, has the potential to play a significant diplomatic role in the region. As one of the region's fastest growing economies, it may soon have the means to use its political advantages. Recently, the Mongolian government has been spending public relations money in Washington by funding think tanks, research, and trips. Expect to hear more from this country. Below is an essay from the Jamestown Foundation that has long followed the country and the region.

Avoiding the “Resource Curse” in Mongolia by Theodore H. Moran, nonresident senior fellow, Peterson Institute for International Economics, PIIE Policy Brief 13-18, July 2, 2013, 8pp.

World Bank Group’s new Country Partnership Strategy (CPS) for Mongolia, May 22, 2013
An excellent blog that follows contemporary Mongolia is: Mongolia Focus.

By: Mendee Jargalsaikhany
First published in the Jamestown Foundation's Eurasia Daily Monitor, Volume: 10 Issue: 124, July 8, 2013.

On July 3, the Mongolian parliament endorsed Tsakhiagiin Elbegdorj’s second term as the country’s president, based on the General Election Commission’s report (Press Release of the Mongolian parliament, July 3). The swearing-in ceremony will be organized on July 10, on the eve of the three-day national holiday, Naadam.

According to the General Election Commission, the incumbent President Elbegdorj, nominated by the Democratic Party (DP), was re-elected by a narrow majority of 50.23 percent in the first round. The opposition Mongolian People’s Party (MPP) nominee Member of Parliament (MP) Badnaanyambuugyn Bat-Erdene received 41.97 percent; and the third candidate, Mongolian People’s Revolutionary Party (MPRP) nominee Natsagyn Udval collected 6.5 percent of votes. Turnout was 66.5 percent (http://www.gec.gov.mn/election2013/flashresults.html). The opposition parties have acknowledged the DP victory, thus creating a stable political atmosphere and ruling out any claims for a run-off election (Ugluunii Sonin, 24tsag.mn, June 28).

This was the first Mongolian election monitored by the Election Observation Mission of the Organization for Security and Cooperation in Europe (OSCE) since Mongolia became an OSCE member on November 21, 2012. Despite some areas needing improvement, the OSCE observers concluded the election was competitive and free in their interim report (http://www.osce.org/odihr/elections/103142). By highlighting the areas still in need of improvement, the OSCE election monitoring mission’s report will provide extra leverage to Mongolian political leaders who are working to improve the country’s democratic political institutions. Moreover, the OSCE’s involvement will almost certainly help to enhance mutual understanding between Mongolia and its European partners.

As a result of the presidential election, the DP will dominate Mongolian politics until 2016 and continue to play a determinative role in directing major political and socio-economic policies. In addition to a majority in the parliament, DP currently holds the posts of parliamentary chairman, prime minister, as well as president. Moreover, the DP controls the governorships and boards of citizens’ representatives of most provinces as well as the capital city, Ulaanbaatar. Nevertheless, Elbegdorj’s pre-campaign strategy and actions actually highlighted his party’s internal challenges to present the DP as a transparent, responsible, and democratic political force. These challenges include a separation of legislative and executive bodies, upholding the rule of law, and overhauling the country’s mining policies.

The separation of Mongolia’s legislative and executive branches has become blurred since the end of the 1990s, as successive majority and coalition parties have had to defend their fragile cabinets. Although Elbegdorj criticized and rejected endorsing a number of cabinet members of the MPP-led governments, he has remained silent when his own party filled 17 out of 19 cabinet posts with serving parliamentarians. The opposition and the public have called on a clearer separation between the legislative and executive branches in order to improve government accountability and transparency. To satisfy their demands, just before the presidential election, Elbegdorj submitted a draft bill that would only allow the prime minister to simultaneously serve in the cabinet and as an active member of parliament. The chairman of the parliament agreed to discuss the bill, but even if passed and signed into law, the actual separation would not apply until the cabinet following the 2016 parliamentary elections (MONTSAME News, June 10). In order to hold the fragile coalition government together, the DP is unlikely to separate the legislative and executive authorities.



Another major reform initiated and strongly advocated by Elbegdorj has been judicial reform and countering corruption. Because of its politicization by the political parties, the influence of various business factions, and a lack of long-term vision since the beginning of the 1990s, the judiciary has become one of the main obstacles for the consolidation of new political institutions. Meanwhile, corruption has become a widespread social phenomenon. Under Elbegdorj’s presidency, comprehensive judicial reform has begun and the Independent Authority against Corruption began investigating high-ranking government officials, including former President Nambaryn Enkhbayar, parliamentarians, governors and officials of state-owned enterprises (e.g., Mongolian Airlines and the Erdenet copper mine). However, both the politicization of the judiciary and the targeting of opposition party-affiliated members in corruption cases have come under criticism from the opposition parties and the public. In a long overdue response, the DP took some measures to answer this criticism just before the presidential election. Prime Minister Norovyn Altankhuyag sacked one of his deputies in the Government Secretariat in light of a corruption investigation, and the General Prosecutor’s Office permitted the anti-corruption agency to investigate incumbent MP Sangajav Bayartsogt’s offshore income case (MONTSAME News, June 13; NEWS.mn, June 28). The latter’s offshore account was disclosed earlier this year by the International Consortium of Investigative Journalists (http://www.guardian.co.uk/uk/2013/apr/03/offshore-secrets-owners-unmasked).

The unfinished business of Elbegdorj’s first term is the reform of mining regulations. Using his authority as the head of the National Security Council, the president suspended the issuance and processing of both mining and exploration licenses in 2010 until comprehensive revisions were made to the existing regulations (see EDM, March 6). Although the presidential administration has taken the lead in revising Mongolia’s mining regulations, its first draft encountered criticism from miners and investors for increasing the state’s involvement as well as creating unclear procedures for redistributing mining licenses. Because of the growing influence of entrepreneurs and pro-business factions in the political parties—especially of the DP and MPP—and parliament (the 2012–2016 parliament has the largest, visible representation of business leaders), the presidential office seems to be caught between business interests and public pressure for “responsible mining.” Since 2010, several officials of the Mineral Resources Authority of Mongolia (MRAM) have been prosecuted for corruption charges; but, notably, these measures were only applied to activities in the last two years and against officials affiliated with the MPP (see EDM, March 6).

These challenges will continue to test Elbegdorj during his “lame duck” term. However, with the growing importance of Mongolia’s natural resources and commitment to democracy, he will continue to play an important role in the foreign policy realm. And, thanks to the increase in state funds (particularly from the operation of major mines like Oyu Tolgoi and Tavan Tolgoi), Elbegdorj will not face major obstacles to fulfilling his pledges to provide financial assistance to students, mothers, the elderly and public servants. His fights against alcoholism, protection of the environment, and for direct democracy will earn him extra points. But the public will judge most closely how he deals with factional interests both within and outside his own party: separating legislative and executive authority, reforming the judiciary and eradicating corruption, as well as establishing a comprehensive legal regime for responsible mining.

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