Mongolian PM and cabinet voted out by parliament over corruption affair

Mongolian PM and cabinet voted out by parliament over corruption affair
Mongolian PM Jargaltulga Erdenebat.
By bne IntelliNews September 8, 2017

Mongolian MPs voted on September 7 to dismiss the prime minister and his cabinet after allegations were raised of incompetence and corruption in relation to the awarding of government contracts worth MNT800bn ($330mn) to companies linked to three government members. 

Prime Minister Jargaltulga Erdenebat and his 14-month-old cabinet were informed that they must step down after a majority of lawmakers from the ruling Mongolian People’s Party (MPP) joined with members of the opposition to pass a motion demanding their resignations over the granting of the contracts, news agencies reported. In the vote, 42 of the 73 MPs present backed the motion presented in the Great Hural (Mongolia’s parliament).

The MPP controls 65 seats of the 76-member assembly, with the opposition Democratic Party and independents sharing the remainder.

Democratic Party lawmaker Batzandan Jalbasuren said the government had failed in the fight against corruption, and accused Erdenebat’s administration of “stealing”, the Japan Times reported. It said supporters of the motion cited contracts signed with the justice minister, who owns a large construction company, a cabinet secretary with interests in a road building company, and the minister of labor and social protection whose family owns a large mining company.

The contracts were reportedly for roads and power transmission equipment, including substations for the mining industry.

Erdenebat, in office since 2016, also faces accusations that prior to the July presidential runoff election he distributed millions of dollars to families with children in an effort to win votes for his party’s candidate, who lost to populist business tycoon and ex-judo champion Khaltmaa Battulga of the Democratic Party.

The MPP leadership has also been castigated for refusing to punish senior representatives who allegedly had roles in a $25mn conspiracy to sell government positions. That claimed conspiracy has been cited as one of the main reasons that cost the MPP the presidency.

Following the vote, parliament is to appoint a new PM and cabinet within 45 days. The current officials will continue serving in the interim.

Mongolia has a tradition of dissolving governments before the end of their term - all governments bar one, under ex-Prime Minister Nambaryn Enkhbayar, have been dismissed in this manner. As many as 15 prime ministers have led governments in Mongolia since the peaceful democratic revolution of 1992.

Mongolia’s economy has improved under Erdenebat’s government, growing 5.3% y/y in the first half of 2017 on the back of spiked demand for Mongolian coal in China. But the landlocked country of 3mn, has, despite its vast mineral wealth, struggled to attract foreign investment in an environment of plunging commodity prices and big disputes between ministers and major investors such as mining giant Rio Tinto.

The government is trying to formulate a recovery on the back of a $5.5bn bailout led by the International Monetary Fund.