Author: Julian Dierkes, UBC
Mongolia’s economy hummed through 2019 on the strength of brown coal exports, regaining some footing following the near-disaster state of government finances in 2017. Repayment of several sovereign bonds looms in coming years and coal and copper prices will have a major impact on Mongolia’s finances, as will the ability of political parties to resist the temptation to buy victory in the 2020 parliamentary election with populist presents.
Some questions linger over the status of the giant Oyu Tolgoi copper project as the saviour of Mongolian finances. In November 2019 Mongolia’s parliament approved a resolution to improve the agreement with operator Rio Tinto. Constitutional amendments also passed in November include provisions that raise the status of ‘strategic deposit’ (potential or operating mines of significance to the nation) to a constitutional level and also specify that Mongolians must receive the majority of benefits from these projects. These largely symbolic amendments do not seem to imply any particular policies but they are now available to future political and populist games. Unexpected and ongoing technical and geological challenges at the Oyu Tolgoi site also spell further potential cost overruns that might strain the relationship between Rio Tinto as the operator of the mine and the government as an equity partner.
Mongolia’s most significant political news came at the end of 2019 as amendments to the Constitution were passed and ratified by President Khaltmaagiin Battulga. These amendments focus on a clarification of the balance of power between the Prime Minister and the President in a hybrid parliamentary-presidential system, but they await a final check by the Constitutional Court. The changes also set the stage for a parliamentary election in June 2020 — a test of the extent to which the landscape for political parties has been reduced to a duopoly, if that.
The changes to Mongolia’s 1992 Constitution were proposed in June and have been discussed somewhat vigorously since then with only a moderate number of blind alleys (a referendum, snap elections) and distractions. The main thrust of the amendments has been to clarify some of the hybrid features of the Mongolian Constitution, tilting it slightly more toward its parliamentarian elements over presidential ones. The Prime Minister, whose power rests on election by parliament, now appoints cabinet members rather than parliament voting on them. Only the Prime Minister and an additional four ministers may be sitting MPs. While the Prime Minister’s independence has been strengthened, parliament is also gaining more oversight powers over the budget and cabinet.
Parliament was also given the power to set up investigative committees, but the budget process was protected from individual MPs’ amendments. Since presidential support was required for these amendments, the apparent bargain between the Mongolian People’s Party-dominated cabinet and parliament and the Democratic Party-affiliated president has been that President Battulga may stand in the 2021 presidential election for what will now become a single six-year presidential term.
A number of the constitutional amendments will require further specification with new legislation. Among the most significant clarifications will be the powers of the General Judicial Council and the newly-created Judicial Disciplinary Committee. Some hope that these amendments will supersede legislation that was hastily passed in March 2019 that gave the National Security Council the power to appoint and suspend judges. It significantly weakened judicial independence at a time when endemic corruption is threatening the ability of the government to make forward-looking policy decisions.
Another amendment curtails civil liberties but is not set to take effect until 2028, raising the possibility of further revisions. This is a provision stating that the registration of political parties is conditional on showing a membership of at least 1 per cent of the electorate (more than 21,000 voters in 2019). Given the longstanding application of minimum electoral thresholds, it is unclear why Mongolians should not be allowed to form small political parties. This amendment reinforces the impression that many political and legislative decisions in 2019 were driven by a desire to preserve the political status quo.
In late December, the revised election law governing the June 2020 parliamentary election was passed. The election will follow the 1992 and 2008 examples in using plurality-at-large voting. As in previous elections, the main question will be whether voters’ frustration can find a constructive outlet in new parties or candidates, or whether legislation will have succeeded in advantaging the Mongolian People’s Party and what remains of the Democratic Party. This question will be important in judging the future fate of Mongolian democracy.
Julian Dierkes is Associate Professor at the University of British Columbia’s School of Public Policy and Global Affairs. He is one of the principal authors of the Mongolia Focus blog.
This article is part of an EAF special feature series on 2019 in review and the year ahead.
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