I’m about to head to Ulaanbaatar for a very brief visit. While summer is a time of parliamentary recess and Naadam, it has been a bit more eventful than usual with the de facto dissolution of PM Saikhanbileg’s super coalition. About 10 months away from the next parliamentary election, I wonder what’s to come and what political mood I will find in Ulaanbaatar.
The end of the DP-MPP-Justice-CWGP super coalition was not entirely surprising, even if the timing this summer already did surprise me.
Two big reasons make this not terribly surprising:
- the single most important purpose of the coalition was to get resource projects and thus ultimately foreign investment and the economy back on track. This was the first item on my personal Saikhanbileg wishlist, and the announcement reasserting Rio Tinto’s and the Government’s commitment to Phase II of Oyu Tolgoi construction seems to have granted that wish and fulfilled that purpose. Note the parallel here with the grand coalition of 2009 under PM Bayar and the initial signing of the OT investment agreement.
- Grand and super coalitions are a political strategic headache going into elections as they muddy opportunities for parties to make a case for their contribution to government and negate the role of an opposition. Note the parallel to the break-up of the grand coalition under PM Batbold in January 2012.
But why already in the summer of 2015, rather than late this year or early next year?
Current Coalition Possibilities
Since the removal of MPP ministers from cabinet, there has not been an announcement of a re-formed government and new ministers. That would suggest that negotiations with coalition partners are on-going. The two most viable alternative constellations would seem to be either a) a return to a coalition like the one that supported PM Altankhuyag (DP + Justice + CWGP) or b) an MPP-led coalition. Given their crucial seats, this might give Enkhbayar and his Justice Coalition a fair bit of leverage in negotiations with the DP, particularly since the super coalition reduced the MPRP’s role somewhat.
I tend to dismiss the analyses of Mongolian politics that always point to upcoming elections as a deciding factor. Why am I not so happy with these explanations? To paraphrase German football coaching legend Sepp Herberger (“Nach dem Spiel ist vor dem Spiel”), after an election is before an election, meaning that there is always another election coming, so that the fact that there is an election coming explains very little. Sure, MPs might be thinking more about the coming election 10 months out (i.e. now) than 40 months out, but many politicians (in Mongolia as in other democracies) seem to think in terms of coming elections all the time.
However, electoral calculations in Mongolia may have shifted in the past six months.
When Ch Saikhanbileg took over as PM from N Altankhuyag, this seemed like a suicide mission. The DP seemed to be committing very public suicide through factional fighting after they’d made a mess of the economy through decisions on foreign investment and also failed with a number of other reforms projects (judicial reform, anti-corruption). Saikhanbileg was taking a bullet for the party knowing that chances in the 2016 election looked dire and perhaps hoping that this would give him political credibility in a future election as the DP leader that righted the ship and set it on a new course knowing that electoral defeat was coming.
Now, that electoral defeat doesn’t look as certain any more, though still likely. What’s changed? Well, that Oyu Tolgoi announcement primarily. The measurable economic impact until the June 2016 parliamentary election will be negligible, but it has changed perception. The tugrik might well continue to slide, the government still has no money and will struggle to begin repaying bonds (though cleverly playing Indian and Chinese desires for influence off against each other will likely allow them to stall on payments), many people will struggle with inflation in daily lives given lack of employment, but at least there seems to be a light at the end of the tunnel.
Construction at OT will be under way and that means that production will ramp up in five-seven years’ time suggesting at least a future cash flow even if there are struggles at the moment. That decision can also be one element in reviving domestic supply chains and employment as well as in regaining the interest of foreign investors, maybe. [The on-going situation surrounding the Khan Resources arbitration award and Centerra’s Gatsuurt project cast a shadow over any likely revival of FDI from a Canadian perspective, of course.]
This will obviously be the case that Saikhanbileg (or any DP prime minister or Z Enkhbold as party chairman) will make in next year’s campaign.
For the MPP this continues to be a situation of damned if you do, damned if you don’t. If the MPP stays out of government, this makes it easier for the DP to argue that they’ve corrected their past errors and are on the right track, claiming the shift in sentiment due to the OT announcement as their achievement. If they stay in some kind of government, it makes it more difficult to emphasize their own contributions.
This quandary presents itself at a time where there also seems to be some turmoil within the MPP. While the party always represents itself as unified at election time, the split of the reformed MPRP under N Enkhbayar is only the most obvious indication that the MPP is not free from factions either.
Much has been made of the apparent popularity of independent MP S Ganbaatar, but more in terms of a potential presidential bid and someone that might shift debates ahead of the parliamentary election toward populist demands. To have a chance in any presidential contest, Ganbaatar would have to be nominated by a party sitting in the Ikh Khural, of course.
This need has led to speculation about any new parties, perhaps especially the HUN Party that seems to be in formation. We provided a quick sense of this National Labour Party in a post in early June, but I’m eager to learn more about their agenda and potential role in politics on this upcoming visit (not to support their effort, of course, as my interest as a foreigner is in analysis not in influencing politics).
There have been some discussions of a new party law and of changes to the electoral system in recent months. It appears that the latter have become muted somewhat. Proposals had included a shift to 76 newly-created electoral ridings with first-past-the-post voting or a number of other alternatives. For now, it seems that the most likely outcome would be continuity from the 2012 election (for once), i.e. a mixed system of proportional representation and first-past-the-post electoral ridings with the twist of multiple candidates in some ridings. The women’s quota for political candidates also seems to be likely to remain.