Mongolia: wrestling, coalition building, and resource nationalism
This week Mongolia is celebrating Naadam, a holiday marked by horse races, archery competitions, wrestling, and lots of airag, which is fermented mare’s milk.
But amid the festivities there is also some serious political wrestling taking place. Mongolia’s new parliament, sworn in July 6, has been in the process to see which parties will form a coalition government to rule the country for the next four years.
The next government will shape resources policies at a crucial time for this mineral-rich country of 3m people, where huge deposits of coal and copper are just on the brink of coming online.
Although no formal deal has been finalised yet, the rough outlines of the new government are already clear: It will be led by the Democratic Party, a center-left party that was the junior coalition partner to its larger rival the Mongolian People’s Party for the past four years.
The Democratic Party said this week that it plans to eschew its former partner the MPP, and pair up instead with the Mongolian People’s Revolutionary Party, a breakaway faction of the MPP that is led by former president Nambaryn Enkhbayar. Enkhbayar recently drew headlines because he is on trial facing allegations of corruption – charges he says are false and politically motivated.
The pairing is surprising because Enkhbayar and the Democratic Party are normally fierce political enemies.
But it is also pragmatic: The Democratic Party won 31 seats in parliament, just shy of the 39 that would have granted them a majority, and the MPRP won eight. (The parties could still gain more seats, because four seats in parliament have not yet been finalised due to unrest or legal challenges.)
So what would a marriage of the Democratic Party and the MPRP mean for Mongolia? Analyst Dale Choi of Frontier Securities says that this arrangement, if finalised in coming weeks, has the potential to give a lot of power to politicians who lean towards resource nationalism. He writes in a recent client note that “Enkhbayar is well known to analysts as a larger than life father figure behind radical resource nationalism, such as demands for revision of the Oyu Tolgoi Investment Agreement.”
Choi also cited the MPRP Facebook page, which included the following (Choi’s translation):
When we tell them (authorities) to fix Oyu Tolgoi agreement, their foreign partners pressure them from behind and authorities who are in their pawn fulfill instructions of their “shadow masters” and defend with life Oyutolgoi agreement that is not beneficial to Mongolia. When we tell them give 100% [Tavan Tolgoi] to people as TT agreement is common riches of Mongolia, few oligarchs who are getting filthy rich from this deposit are scared to death.
In interviews with the FT, Enkhbayar has said he welcomes foreign investment, while also advocating citizen ownership of Tavan Tolgoi, a giant coking coal deposit near the border with China.
No formal announcement about the composition of the new government is likely to be made until well after the horse races of Naadam have concluded. But until then, the political jockeying will continue.
But amid the festivities there is also some serious political wrestling taking place. Mongolia’s new parliament, sworn in July 6, has been in the process to see which parties will form a coalition government to rule the country for the next four years.
The next government will shape resources policies at a crucial time for this mineral-rich country of 3m people, where huge deposits of coal and copper are just on the brink of coming online.
Although no formal deal has been finalised yet, the rough outlines of the new government are already clear: It will be led by the Democratic Party, a center-left party that was the junior coalition partner to its larger rival the Mongolian People’s Party for the past four years.
The Democratic Party said this week that it plans to eschew its former partner the MPP, and pair up instead with the Mongolian People’s Revolutionary Party, a breakaway faction of the MPP that is led by former president Nambaryn Enkhbayar. Enkhbayar recently drew headlines because he is on trial facing allegations of corruption – charges he says are false and politically motivated.
The pairing is surprising because Enkhbayar and the Democratic Party are normally fierce political enemies.
But it is also pragmatic: The Democratic Party won 31 seats in parliament, just shy of the 39 that would have granted them a majority, and the MPRP won eight. (The parties could still gain more seats, because four seats in parliament have not yet been finalised due to unrest or legal challenges.)
So what would a marriage of the Democratic Party and the MPRP mean for Mongolia? Analyst Dale Choi of Frontier Securities says that this arrangement, if finalised in coming weeks, has the potential to give a lot of power to politicians who lean towards resource nationalism. He writes in a recent client note that “Enkhbayar is well known to analysts as a larger than life father figure behind radical resource nationalism, such as demands for revision of the Oyu Tolgoi Investment Agreement.”
Choi also cited the MPRP Facebook page, which included the following (Choi’s translation):
When we tell them (authorities) to fix Oyu Tolgoi agreement, their foreign partners pressure them from behind and authorities who are in their pawn fulfill instructions of their “shadow masters” and defend with life Oyutolgoi agreement that is not beneficial to Mongolia. When we tell them give 100% [Tavan Tolgoi] to people as TT agreement is common riches of Mongolia, few oligarchs who are getting filthy rich from this deposit are scared to death.
In interviews with the FT, Enkhbayar has said he welcomes foreign investment, while also advocating citizen ownership of Tavan Tolgoi, a giant coking coal deposit near the border with China.
No formal announcement about the composition of the new government is likely to be made until well after the horse races of Naadam have concluded. But until then, the political jockeying will continue.
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