Mongolian government dissolved (January 16, 2006)

Vancouver – The pull out of the Mongolian People’s Revolutionary Party (MPRP) from the country’s ruling coalition has prompted dissolution of the government.

MPRP, the largest political party in Mongolia, announced its withdrawal from an alliance struck in late-2004 supporting Prime Minister Tsakhilganiin Elbegdorj, whom it accuses of failing to effectively fight corruption and accelerating poverty in Central Asian country. Parliament voted 39-to-0 to dissolve government, albeit after the protest of 37 members who left prior to the tally, including 20 from Elbegdorj’s Democratic Party.

The move creates a temporary void for Mongolia and concern for the numerous foreign mineral exploration companies operating in the geologically rich country.

MPRP was the party that led Mongolia, under Soviet Communist direction, up until 1990 then transitioning into the democratic process. The party currently sits with 38 seats in Government House, one shy of control in the 76-seat parliament.

The next stage will see MPRP moving to form a new coalition to govern the country, a task it will have to achieve without the Democratic Party’s 25 seats. MPRP is headed by Nambarum Enkhbayar who also serves as President of Mongolia, a primarily ceremonial position.

Mongolian parliament has recently been debating proposed changes to the country’s mineral policy. Initial drafts prompted foreign company concern when proposals for government participation in mineral projects were put forward. Fears were quelled when the government announced it would not seek state participation in mineral projects discovered by foreign companies.

With no doubt, those foreign companies will be keeping a very anxious eye on Mongolia’s Government House over the upcoming weeks.