Mongolian Politics, Up Close

Julian Dierkes is one of Canada’s foremost authorities on Mongolia.

An assistant professor in Asian studies at the University of British Columbia, Dierkes served as an election monitor in the recent Mongolian presidential election.

Speaking via telephone from Germany, Dierkes says while there were some administrative irregularities, there was no evidence of systematic fraud in the May election — a key reason why there was no repeat of the violence that marred last year’s parliamentary elections.

It was only last summer that riots broke out after the incumbent president Nambaryn Enkhbayar’s Mongolian People’s Revolutionary Party (MPRP) won a majority of seats in parliament.

Tsakhiagiin Elbegdorj, the winner of the presidential election and member of the MPRPs main rival, the Democratic Party (DP), was said to have given a speech after last year’s loss that played a part in inciting the riots.

Despite the closeness of the presidential race this year, there was no debate from the losing Enkhbayar over the results.

But how did Elbegdorj pull out a victory when polls leading into the election had Enkhbayar escaping with a narrow win?

Dierkes says for once, Elbegdorj had the unified support of his party.

Where in the past, the MPRP was unified in its support for Enkhbayar, and the DP was weakened by in-fighting, this time the roles were reversed.

It was Elbegdorj that enjoyed not only the support of his party, but also the support of the independent members of parliament.

Tellingly, the prime minister of the country, Sanj Bayar, a member of the MPRP, was rumoured to favour Elbegdorj.

While the reasons for this aren’t entirely clear, the word on the streets of Ulaanbaatar was that Bayar was eager to rid parliament of Elbegdorj’s maverick spirit and the best way to do so was to elevate him out of parliament and into the president’s office.

The peaceful handover of the presidential office bodes well in the country’s efforts to restore its reputation.

“One big advantage Mongolia has had is that in international relations it can say, ‘Look around at our neighbours, we’re doing the best.'” Dierkes says. “And compared to Central Asia, they are doing quite well.”

He adds: “The riot was a bit of a blip and they were eager to demonstrate stability to investors.”

But investor reaction to the election was confused. Shares of miners in the country suffered heavy losses after Elbegdorj was declared the victor.

A strange phenomenon considering that in the 1990s, the Democratic Party carved out a reputation for itself as being the more business-friendly of the two main parties.

“But Elbegdorj has an independent streak and a bit of an in-it-for-himself streak,” Dierkes says, and pointed to his speeches after his election loss last year as an indicator of that.

Overall, though, Dierkes says given that both Enkhbayar and Elbegdorj agreed in a televised debate on the Thursday before the election that an investment agreement between Ivanhoe Mines and the government needed to get signed fast. Ivanhoe and Rio Tinto jointly hold the Oyu Tolgoi copper-gold project in Mongolia.

Much has been made of the presidential position in Mongolia being more of a ceremonial position. But Dierkes explains that while it is difficult for the president to directly guide parliament, he can rule in a passive aggressive way, thanks to a presidential veto. The president can continually veto any bill proposals from parliament, essentially sinking the government into a quagmire.

As a check on this, however, the president’s veto can be overridden by a two-thirds majority in parliament. Although the MPRP has a clear majority in parliament, it doesn’t have two-thirds, so any veto from Elbegdorj should be safe provided he maintains the support of his party and the independents.

As for the investment agreement, Dierkes contends that it isn’t the details of the agreement that have slowed down its approval, but rather the grandstanding of individual members of parliament. Standing up and demanding that certain points be included in the agreement has been an easy way for politicians to grab headlines in the country.

But Dierkes points out that because the parliamentary elections were just last year, and members are elected to four-year terms, there should be more than enough time for all members to voice their concerns and still get the agreement passed.

“Long term,” Dierkes says, “I’m still confident the agreement will happen.”

As for the contention of Ivanhoe’s president and chief executive, John Macken, that the fallout from the global economic crisis would push the country towards a quick resolution of the agreement, Dierkes is ambivalent.

“There is a sense now that the economic hurting is happening very actively,” he says. “There are half-constructed buildings throughout the capital that are not being worked on and the sense of crisis is relatively real. To what extent that will hasten the agreement, I’m not entirely sure.”