Can Mongolia’s elections shun democratic backsliding?

Authors: Byambajav Dalaibuyan, Mongolian Institute for Innovative Policies and Julian Dierkes, UBC

On 24 June 2020, Mongolia will hold its eighth parliamentary election since adopting its 1992 democratic constitution. This election is significant at a time when democracy worldwide increasingly appears under threat. It will assess the state of Mongolia’s democracy — which has exhibited signs of weakening — and whether the country can buck a global democratic backsliding trend.

A total of 606 candidates, representing 13 political parties and 4 coalitions as well as 121 independents, will compete in the election. Both the incumbent Mongolian People’s Party (MPP) — which won 65 of 76 seats in 2016 — and the opposition Democratic Party (DP) are running candidates in all 76 election districts.

The record number of 121 independent candidates is a response to perceptions of failure of the Mongolian party system. Public trust in the two established political parties and parliament has dropped. Frustration and anger has been building over the incompetence of many members of parliament and their direct involvement in the embezzlement of state funds in recent years.

Last November, the MPP-dominated parliament adopted amendments to the 1992 constitution intended to strengthen Mongolia’s parliamentary system of government, judicial independence and government stability. The amendments are particularly important as President Khaltmaa Battulga has become increasingly hostile towards parliamentary democracy and judicial independence. The next parliament will need to adopt further laws to fully implement the amendments.

Five candidates, two from the MPP and three from the DP, have been arrested since the election campaign started. These arrests are politically motivated and target politicians who have been in conflict with either Prime Minister Ukhnaa Khurelsukh or President Battulga. The General Election Committee has not reacted to these violations of candidates’ rights.

For more, go to following links.

https://www.eastasiaforum.org/2020/06/22/can-mongolias-elections-shun-democratic-backsliding/

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Alcohol sales to be banned in Mongolia during upcoming parliamentary elections

ULAN BATOR, June 22 (Xinhua) -- Sales of all types of alcoholic drinks will be forbidden across Mongolia during the upcoming parliamentary elections, local media reported Monday.

Mongolia is expected to hold the parliamentary elections on Wednesday.

There will be a 72-hour ban on the sale of alcohol from Tuesday to Thursday in the capital city of Ulan Bator, which is home to more than half of Mongolia's population of 3.2 million.

Meanwhile, sales of alcoholic beverages will be prohibited in all 21 provinces of the country on the eve of the elections and polling day, namely Tuesday and Wednesday.

Mongolia's parliament is unicameral, consisting of 76 lawmakers each serving a four-year term.

The landlocked Asian country last held parliamentary elections in June 2016. Enditem

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Six parliamentary candidates detained in Mongolia

ULAN BATOR, June 20 (Xinhua) -- The Mongolian authorities have recently detained six parliamentary candidates amid the ongoing campaign for the upcoming parliamentary elections, according to local reports.

Four of the detained politicians are candidates from the country's opposition Democratic Party and the remaining two are independent candidates.

Among the arrestees are former Finance Minister Sangajav Bayartsogt, and Bayanjargal Byambasaikhan, chairman of the Business Council of Mongolia, who are allegedly implicated in a large mining deal involving foreign investment.

The sudden decision to detain the parliamentary candidates on the last few days before the legal deadline for the election campaign is an "illegal act" and "politically motivated," said attorneys of the candidates and some Mongolian netizens.

Mongolia is expected to hold general elections on Wednesday.

The country's parliament, the State Great Khural, is unicameral, consisting of 76 lawmakers serving a four-year term. Enditem

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China-backed AIIB approves $100 mln loan for Mongolia's virus fight

BEIJING, June 19 (Reuters) - The Beijing-backed Asian Infrastructure Investment Bank (AIIB) has approved a loan of $100 million to help Mongolia battle the coronavirus pandemic, the bank said on Friday.

The project, cofinanced by the Asian Development Bank, will support a government program covering public health funding, protection of vulnerable groups, support for businesses and fiscal stimulus measures, the bank said in a statement.

The loan is part of the AIIB's $10 billion funding facility to help public and private sectors fight the outbreak.

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IMF Executive Board Approves US$99 Million Disbursement Under the Rapid Financing Instrument to Mongolia to Address the COVID-19 Pandemic

• The COVID-19 pandemic has taken a large toll on economic activity in Mongolia, giving rise to urgent budget and balance of payments needs.
• To support Mongolia, the IMF has approved the request for emergency financial assistance under the Rapid Financing Instrument (RFI) of about US$99 million.
• This emergency financial assistance will help support foreign exchange reserves, create fiscal space for essential pandemic-related expenditure, and catalyze donor support.

WASHINGTON, DC – The Executive Board of the International Monetary Fund (IMF) approved Mongolia’s request for emergency financial assistance under the Rapid Financing Instrument (RFI) equivalent to SDR 72.3 million (about US$99 million, or 100 percent of quota) to meet urgent budgetary and balance of payment needs stemming from the outbreak of COVID-19 and to support the most affected sectors and vulnerable groups.

Following the Executive Board’s discussion of Mongolia, Mr. Mitsuhiro Furusawa, Deputy Managing Director and Chair, made the following statement:

“Mongolia has successfully avoided a domestic outbreak of COVID-19 thus far, helped by the early introduction of social distancing and tight health protocols for cross-border flows. Nonetheless, the pandemic has sharply reduced economic activity due to both the economic cost of the containment measures and the fall in external demand. There is now an urgent balance of payments need and a fiscal financing gap.

“The authorities have already taken a number of measures to limit the economic contraction and help the most vulnerable. Recent revisions to the budget allow for higher health and social spending as well as tax relief to affected households and businesses. In addition, the Bank of Mongolia has eased monetary and financial policies to help prevent a disorderly contraction in bank lending to the private sector.

“Emergency financing under the IMF’s RFI will provide much needed support to respond to the urgent balance of payments and budgetary needs. Additional assistance from development partners will be required to support the authorities’ efforts and close the financing gap. The authorities’ commitment to high standards of transparency and governance in the management of financial assistance is welcome.

“As the immediate threat to the economy subsides, it will be critical to resume key reforms begun during the recent Extended Fund Facility arrangement. These include a return to fiscal consolidation to reduce still high public debt, a more flexible exchange rate to build up foreign exchange reserves, remedying AML-CFT deficiencies, and stronger supervisory enforcement to ensure that all banks have sufficient capital.”

IMF Communications Department

MEDIA RELATIONS

PRESS OFFICER: KEIKO UTSUNOMIYA

PHONE: +1 202 623-7100EMAIL: MEDIA@IMF.ORG

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Mongolia throws a power station curveball at Rio Tinto

The cost of expanding Rio Tinto's Mongolian copper project could decline by almost $US1 billion ($1.5 billion) under a surprise Mongolian government plan that could increase the host nation's long-term influence over Rio and the project.

The Mongolian government has told the Rio subsidiaries building the $US6.8 billion Oyu Tolgoi copper expansion that it plans to build a state-owned coal-fired power station that would provide a long-awaited domestic power source for the mine.

The latest curveball from the Mongolian government comes barely a month before parliamentary elections in the developing nation, and a week before Mongolian courts hear charges against the government officials who signed the 2015 agreement that underpins the Oyu Tolgoi expansion.

The existing mine at Oyu Tolgoi is powered by coal-fired electricity that is imported from neighbouring China, but Mongolia has demanded that Rio find a domestic power source before June 30, 2023.

Rio flagged in February that a $US924 million coal-fired power station was the most likely domestic solution, although it indicated it would not be finished before June 2024.

The Mongolian government disagreed with Rio's $US924 million power station proposal, and has since told Rio and its subsidiaries that it plans to build a state-owned power station at the Tavan Tolgoi coalfields.

The surprise move has both short-term and long-term ramifications for Rio and the Rio subsidiary that owns 66 per cent of Oyu Tolgoi, Turquoise Hill Resources.

Leverage over the project

A government-funded power station would reduce Rio and Turquoise Hill's near-term spend on the project; a prospect that would appeal to minority investors in Turquoise Hill given the company needs to raise "at least $US4 billion" in further funds to cover cost and schedule blowouts on the Oyu Tolgoi expansion.

But a government-controlled power station would give the government a long-term source of leverage over the mine project, which could be important given the fractious nature of Mongolia's relationship with Rio.

The government is also understood to believe it can build such a power station cheaper than the $US924 million price tag suggested by Rio and its subsidiaries.

Turquoise Hill said it was broadly supportive of the government-owned proposal, subject to further agreement over the commercial terms for the supply of power and construction timelines.

Rio and its subsidiaries would likely need a guarantee they can continue importing power from China until the Mongolian government power station was built, suggesting the June 2023 deadline for Rio to find a domestic power source could be extended.

Signatories in court

The surprise proposal for a government-owned power station comes a week before scheduled court appearances by the two men who in 2015 were the Mongolian government signatories to an agreement that allowed the Oyu Tolgoi expansion to go ahead.

Bayanjargal Byambasaikhan was chief executive of Mongolia's sovereign wealth management company Erdenes Mongol in 2015 when he joined Rio Tinto's now chief executive Jean-Sebastien Jacques in signing the expansion agreement in a Dubai hotel.

Known in Mongolia as Byamba, he has since been accused of abusing his authority in signing the deal, which effectively kick-started the project without requiring approval from the Mongolian parliament.

Byamba is now chairman of the Business Council of Mongolia, a lobby group that counts Oyu Tolgoi as a member, alongside Australian companies such as Orica, Worley, Aspire Mining and the Australian embassy to Mongolia.

Similar charges, which relate to matters of process rather than any suggestion of corruption, have been filed against another signatory to the Dubai agreement and former Oyu Tolgoi director Ganbold Davaadorj.

The charges against both men are similar in nature to those filed against former Mongolian prime minister Chimediin Saikhanbileg,

Rio and Turquoise Hill warned in July 2019 that expansion of Oyu Tolgoi was running between 16 and 30 months later than the most recent guidance, and the cost of construction was likely to be between $US1.2 and $US1.9 billion higher than previous guidance.

Turquoise Hill refined that guidance last week, saying the delays would be between 21 and 29 months late, with the company's best guess at this stage being a delay of 25 months.

The cost blowout range was tightened to between $US1.3 billion and $US1.8 billion, with $US1.5 billion being the company's best guess at this stage.

If Turquoise Hill is correct on those estimates, the construction cost would amount to $US6.8 billion excluding the cost of the power station, and first sustainable production would occur about the middle of 2023.

In 2012, Rio was expecting to have the Oyu Tolgoi underground expansion complete and in production by 2015.

Source:www.afr.com

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