Mongolia's new PM starts putting together 'super coalition' government

By bne IntelliNews December 3, 2014

bne IntelliNews -


Mongolia's Prime Minister Chimed Saikhanbileg submitted to parliament on December 3 a new government structure that will serve as the foundation for his proposed “super coalition” government.

The steady pace at which Saikhanbileg builds his government provides further evidence that the government transition will be a smooth one, and will raise hopes that he will be able to  lift up again Mongolia's fallen mining industry.

Saikhanbileg's “choice of a new cabinet over the next two weeks will be critical,” writes Marius Toime, a projects partner at international law firm Berwin Leighton Paisner, in the Financial Times' beyondbrics blog. “Including more professionals and experienced bureaucrats, rather than officials elected for political reasons, would signal a recognition that corruption must be addressed.”

Already dubbed the “Government of Unity” by Saikhanbileg, it will include the once-opposition Mongolian People's party. The idea is to forge out of multiple pacts an effective government, all working towards a single goal: restoring the economy to levels comparable to 2011, when Mongolia experienced peak growth of 17.5%.

If parliament approves, the new cabinet will have 19 posts divided between five parties. The government will have 16 ministries, the same as before, compared to the 13 proposed  by former premier Norov Altankhuyag Norov just before he was ousted in November.  

Noticeably absent, however, is the Environment and Green Development Ministry, which had been praised internationally for having the mission of  steering development in a clean, environmentally friendly direction.

What's new is a mysterious post with no description at all, (the job is simply referred to as “minister”). That role will be anyone's guess. “The real reason I suspect is to find a middle ground with the coalition partners who all wanted a different structure,” says Badral Munkhdul, the chief executive of market analyst firm Cover Mongolia, in a note alerting clients to the news of Saikkhanbileg's proposal. He reckons that the job will be to manage a few key national programmes.

Quick action is needed as Mongolia's deadlines for its two largest mining endeavours approach. Moving forwards in both, says Saikhanbileg, is essential to his strategy to reboot the economy.

Foreign investment was down 57% for the first 10 months of the year compared with the same period in 2013, reported Mongolia's central bank. That is a large reason why the World Bank is predicting only 6.3% growth this year, which is still respectable but less than half of three years ago.

Activity at both the Oyu Tolgoi copper and the Tavan Tolgoi coking coal mines would help return some of that lustre from 2011. Construction of an expansion project at Oyu Tolgoi has been on suspension since August 2013 because of disputes between the government, which owns 34% of the $6.5 billion project, and 66% stakeholder Rio Tinto. The diversified Anglo Australian miner needs the government to consent to a $4bn project financing package that would pay for the expansion.

Also underway is a bidding process in which private companies take part in mining of the country's largest coal mine, the Tavan Tolgoi basin, owned by Erdenes Tavan Tolgoi. Hong Kong-listed Mongolian Mining Corp, which is owned by Mongolia's largest local holding company, in addition to companies from Japan and China are bidding for the rights to mine as a consortium. Mongolia plans to release a shortlist for the bidding by December 15.

Related Articles

COMMMENT: Great challenges for Eurasia call for decisive solutions

Juha Kähkönen of the IMF - The Caucasus and Central Asia (CCA) region continues to navigate a wave of external shocks – the slump in global prices of oil and other key commodities, the slowdown ... more

IMF calls for Central Asia to tighten monetary policy

Naubet Bisenov in Almaty -   Caucasus and Central Asian (CCA) countries need to tighten their monetary policy to anchor inflation expectations, but excess tightening may weaken financial ... more

Business leader-turned-technocrat ready to mine Mongolia's “treasures”

Terrence Edwards in Ulaanbaatar -   One of Mongolia's premier dealmakers has taken on the supreme task of putting the country's mining and infrastructure projects back on track after years of ... more

Register here to continue reading this article and 2 more for free or 12 months full access inc. Magazine and Weekly Newspaper for just $119/year.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

IntelliNews Pro subscribers click here

Thank you. Please complete your registration by confirming your email address. A confirmation email has been sent to the email address you provided.

Thank you for purchasing a bne IntelliNews subscription. We look forward to serving you as one of our paid subscribers. An email confirmation will be sent to the email address you have provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

If you have any questions please contact us at

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

IntelliNews Pro subscribers click here

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

Thank you. Please complete your registration by confirming your email address. The confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.