It is not about OT, it is the Power Politics

By Mendee Jargalsaikhan

The Mongolian anti-corruption agency, known as the Independent Authority Against Corruption (IAAC), arrested former Prime Ministers Bayar and Saikhanbileg, Finance Minister/MP Bayartsogt, and several other former executives.  The Mongolian politics is presenting similar patterns of other East Asian democracies, such as South Korea or Taiwan, where former presidents are often brought to the justice.  But, in the Mongolian case, it is more likely the result of the power politics between two major parties (MPP and DP) and also factions within these parties.

Is it about OT?

Although many assumed and attempted to link these corruption allegations to the Oyu Tolgoi investment agreement, it doesn’t look like all about the OT.  Unless, the IAAC investigators present strong evidence of the investors bribing these influential politicians.  Otherwise, the OT agreement was openly debated in multiple rounds and approved by the parliament within the revised legal framework, namely the 2006 Mining Law. Since this was the country’s first-ever agreement with a global giant, Rio Tinto, many criticize the negotiated settlements (both initial and second-phase agreements).  Therefore, the re-negotation attempts would remain on the table for all succeeding governments and the OT agreement would be criticized by populist politicians and concerned civil society organizations.  Thus requires more transparency from the investors in this already perceived unequal match.

Power Politics – Intra and Inter Parties 

These arrests are effects of the power politics.  First, it is a struggle among three power centres – Speaker M. Enkhbold (MPP), whose faction controls the half of the parliament and the cabinet, Prime Minister Khurelsukh (MPP), who recently secured the control of cabinet as well as the MPP, and President Battulga (DP), seeking all ways to increase his influence over the judiciary and law enforcement.  The recall of former Prime Ministers Bayar and Enkhsaikhan from ambassadorial posts in UK and Sweden was initiated and pursued by President Battulga.  Battulga’s pressures to change the head of the IAAC might have resulted in the IAAC’s quick arrests.  One could easily see these collaborative moves of the IAAC and Chief Prosecutor’s Office for these recalls, 72 hour arrests, and the extension of detentions.   Even though initially, these investigations were perceived one-sided (i.e., only going after DP members), the arrest of former Prime Minister Bayar indicates the transactional cooperation between these power centres although it is hard to prove.

Second, the DP Chairman Erdene’s decision to expel Bayartsogt from the party and Speaker Enkhbold’s twitter statement of not interfering in the criminal investigations were quite new in the Mongolian party politics.

In the past, political parties usually either aggressively defend their influential members or  avoid issuing any types of statements.  However, this time, it is clear that both parties are experiencing intense power struggles among their major factions.  The MPP, albeit its dominance of the parliament, is divided between two major factions – of Speaker M. Enkhbold’s versus Prime Minister U. Khurelsukh’s (one controls the parliament and the  other controls the cabinet). Back in 2007, former Prime Minister Bayar marginalized Enkhbold’s faction and later a similar competition occurred between their successors Khurelsukh and Erdenebat in 2017.  The DP is also having similar fate.  The Polar Star faction, for which Bayartsogt and Saikhanbileg belong, dominated the DP politics from 2008 – 2015, and then shattered due to its own internal power struggle. Now the DP comes under the control of the Falcon Faction (former Speaker and current presidential secretariat Z. Enkhbold and S. Erdene) jointly with the MDU faction of President Battulga.  It seems that factions with access to some type of state power are attempting to increase their control  and influence over the party by simply marginalizing their opponents.

True Causes

Clearly, it is challenging to make assumptions about causes for current political events.

First, it is not a fight to clean the party or a move to improve the party’s institutions.  It is a struggle to improve their standings before the 2020 parliamentary and 2021 presidential elections.  These factions are no longer driven by shared political values or ideological commitments rather than shared economic interests.  Although recently there have been several noticeable attempts of strengthening the party institution within the MPP, it seems these efforts are running out of steam as the majority of members inside and outside the parliament/cabinet have started pursuing their self-interests of running in upcoming elections and competing for public offices.

Second, it is not an attempt of eradicating the corruption or bringing those to the justice.  If these arrests finally resolve all allegations – (i.e., hidden offshore accounts of Bayartsogt, seven houses of Bayar, non-transparent rush take-over of 47 percent of the Erdenet copper factory, money-laundering through Erdenet, and kickbacks for the OT investment agreements), it would be victorious, historic, and landmark steps towards Mongolia’s dream of becoming Inner Asian Tiger or Qatar. But, given today’s political dynamics, it is unlikely.  Those, who are in power, are trying to defend their economic interests and to marginalize potential opponents within and outside of their respective parties.

At the end of the day, the politics of Mongolia appears to be the power politics – in order to (1) control the state institutions for factional advantages and protection, (2) take over the state-owned enterprises, ranging from the Erdenet factory, to railroad, airline, infrastructure, and, of course, to Tavan Tolgoi mine, and (3) gain access to big loans, bonds, tenders, and grants.

Things would look differently – only when political leaders with true morale commitments of not making or involving in these alleged corruptions in the first place and same political leaders invest into formal institutions by endorsing and upholding the written, formally agreed rules.

About mendee

Jargalsaikhan Mendee is a Deputy Director of the Institute for Defense Studies of Mongolia. He holds a PhD in Political Science from the University of British Columbia, and MAs in International Relations from the US Naval Postgraduate School and in Asia-Pacific Policy Studies from the Institute of Asian Research of the University of British Columbia.
This entry was posted in Corruption, Economics, Erdenet, Judiciary, Oyu Tolgoi and tagged . Bookmark the permalink.

1 Response to It is not about OT, it is the Power Politics

  1. CH says:

    Thank you for these insights. Hopefully not too many people will suffer.

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