A former foreign minister considered a reformer will head up the new government in Mongolia following the ouster of his predecessor, who resigned earlier this month.

Zandanshatar Gombojav, a career politician, was approved on June 12 by the Great Hural (Parliament) after a full day of hearings. His predecessor, Oyun-Erdene Luvsannamsrai, left office after failing a vote of confidence.

Zandanshatar, 55, received 108 votes out of 117 cast in Parliament to become Mongolia’s 34th prime minister. This represents a turn of events from a year ago, when he even failed to win a seat in Parliament.

Julian Dierkes, a Mongolia expert at the University of Mannheim, describes Zandanshatar as a “compromise candidate” between different factions of the ruling Mongolian People’s Party (MPP). Dierkes adds that there may be questions over his mandate due to his loss in Parliament last year.

But while his recent political fortunes were less than stellar, his background offers varied experience. In addition to serving as a foreign minister, Zandanshaatar has been a speaker of parliament. A decade ago, he attended Stanford as a visiting scholar.

He takes over a government left in tatters after the breakup of the last coalition government. Last month, the MPP voted to remove the Democratic Party (DP) from the coalition after DP members called for Oyun-Erdene to step down.

Oyun-Erdene’s exit was sparked by social media posts that raised questions over the source of his family’s wealth. Posted photos led to street protests and calls for his resignation.

Zandanshatar, a former banker, takes the reins of a government that has seen significant economic improvements since the pandemic. The economy grew 6% last year, largely on the back of strong coal and copper sales to China. The World Bank is forecasting 6.3% growth this year.

But challenges lie in wait. Speaker of Parliament Amarbayasgalan Dashzegve said in an address to Parliament early on June 13 that Mongolia faces uncertainty due to unstable geopolitics and soft commodity prices.

He urged Zandanshatar to “find ways to implement mega projects without putting pressure on the economy.”

Zandanshaatar’s economic past includes some nationalist tendencies but most experts agree he has moved to the centre on his economic views.

“Today he presents himself as a reform-minded stabiliser, not a threat to foreign capital,” said Amar Adiya, a political commentator and the editor of Mongolia Weekly, a market intelligence newsletter.

“Investors should watch who he appoints to the finance, economic development and mining ministries. That will say more about his direction than his decade-old positions. His past may raise questions but his recent tone suggests continuity, not confrontation,” Amar adds.

Those sentiments could ease concerns held by Western mining companies and others doing business in Mongolia. Foreign investment has long kept a cautious eye where Mongolia is concerned amid its frequent changes in leadership and shifting rules and regulations.

Chief among those investors is Anglo-Australian mining giant Rio Tinto, which controls the giant Oyu Tolgoi copper and gold mine, the anchor of Mongolia’s economy for over a decade.

Rio, currently negotiating with the government over mining licences, will be keen to engage with the Zandanshatar to move its project forward. One likely scenario is that Zandanshatar stays the course set down by the previous administration, which favoured the development of so-called megaprojects in energy, mining and other sectors.

“I don’t expect any radical turns in policy from the Oyun-Erdene government,” said Dierkes.