Miners’ motherlode Mongolia faces instability ahead of June elections

Mongolia is the darling of the mining industry, but there are questions about the country’s stability following the arrest of a former president in the heated political atmosphere ahead of June elections.

Mongolia’s three million people are sitting on untapped precious metal and mineral resources worth an estimated $1 trillion and economic growth is barrelling along in double-digit figures, including 17.3 per cent last year.

But since it emerged from the collapsed Soviet Union in 1990, Mongolia’s early successes with creating a vibrant democracy have subsided into bitter factionalism, outrageous corruption and incompetent government.

The arrest 10 days ago of former president and now leading opposition leader Nambar Enkhbayar by agents of Mongolia’s Independent Authority Against Corruption (IAAC) is being widely seen as more of an example of extreme partisan politics than of an effort by the administration to come to grips with corruption.

The arrest led swiftly to a large demonstration by supporters of Enkhbayar, who was prime minister in the Communist-spawned Mongolian People’s Party government from 2000 to 2004 and then president from 2005 to 2009, when he was narrowly defeated by current President Tsakhia Elbegdorj of the Democracy Party.

Hundreds of people gathered in central Sukhbaatar Square in the capital Ulaanbaatar and mounted a noisy but peaceful demonstration outside the parliament building.

But similar demonstrations in the past have been violent. Officials shut schools in the capital in advance of the latest protest, and embassies closed down and warned their nationals to stay off the streets.

It was the continuing fallout from a similar demonstration after disputed parliamentary elections in 2008, in which five people were killed, that raised fears of more violence, and which is being seen by observers in Mongolia as the true reason for Enkhbayar’s arrest and the responding protest by his supporters.

After Enkhbayar’s defeat in the 2009 presidential race he set up his own party, the Mongolian People’s Revolutionary Party (MPRP), reviving the name of the one-party government in the Soviet era.

Enkhbayar’s MPRP is set to do well in the June parliamentary elections. In preparation for that campaign, on the day before he was arrested, he tried to lay to rest controversy about his role as president in the 2008 riots and killings.

He produced voluminous records of meetings he and other political leaders had with the National Security Council to respond to the postelection demonstrations.

The transcripts produced by Enkhbayar tend to back his contention that it was a collective decision to declare the four-day state-of-emergency.

The papers also tend to support his claim that the feeling was widespread among political leaders that the then leader of the Democracy Party and now Mongolia’s president, Elbegdorj, had incited the violence by claiming the election results were fixed.

Elbegdorj has always denied that allegation, but the timing of Enkhbayar’s arrest 10 days ago has inevitably fuelled speculation that the detention was spurred more by political motives than genuine concern with graft, of which there are few if any Mongolian politicians who are innocent bystanders.

The IAAC, which answers to parliament, insists the timing of the arrest of Enkhbayar was entirely coincidental and came after a year of the former president ignoring repeated summons for interviews.

What exactly Enkhbayar is charged with remains a bit unclear. The basic allegation is that he profited out of the privatization of state property, including a hotel and a newspaper, and that he diverted studio equipment donated by Japan and intended for a monastery to set up his own new television station.

June’s elections are approaching at a time when Mongolia is facing a host of contradictions stemming from its transition to democracy. There are also the tectonic tremors in its economy as it shifts from a basis in agriculture and semi-nomadic herding on the country’s vast grassland steppes to one based on mining.

Political leaders have wrestled with the horrendous problems of trying to develop mining policy and regulations. They continue to struggle with fashioning a mining industry that benefits the country and its people even as hordes of mining company carpetbaggers from Australia, Europe, the United States and Canada clamour at their doors for concessions.

If they can get it right, the country’s three million people could have one of the world’s higher standards of living. But so far Mongolians have seen only widening disparity between rich and poor, and even a climbing poverty rate from 35 per cent in 2008 to 40 per cent in 2011.

In a demonstration of the lack of experience and understanding among Mongolian politicians and officials of how to manage this kind of economy, the government in 2008 decided to try to bring down poverty by distributing from mining revenues the equivalent of $16 a month to every Mongolian.

The result is inflation of over 10 per cent, which is expected to top 15 per cent this year if the government follows through on promises to boost the salaries of all public servants by 53 per cent.

jmanthorpe@vancouversun.com
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