Party Implications of SME Fund Scandal

By Julian Dierkes

Since late summer, I have been speculating about different scenarios to bring about a change in political culture and in the party landscape. These speculations focused on trigger evens that might lead to protests which would lead to change.

In a sense, we have had the first of that kind of triggering event and it has hinted at some possible changes in the party landscape already, since the SME Fund scandal has left the MPP and DP somewhat speechless given the involvement of so many of its leading politicians in this scandal or hints at other state funds. And, in the process, the XUH party has enjoyed a bit of attention that has hinted at the possibility of electoral challenges to the MPP and DP.

Given past inability within the MPP and DP to reform themselves, especially under their current leadership, new parties or the revival of previously relevant parties does seem like one viable route to a change in political culture.

Note that I see two changes as needed urgently:

  1. comprehensive anti-corruption, pro-professional bureaucracy policies
  2. renewed political, ideological and policy contestation to offer Mongolian voters a say not just in whom they election, but also what kind of policies those elected will pursue.

Risks in Creating an Anti-Corruption Party

While a party organized around anti-corruption policies may be the most effective way to address systemic corruption and could also attract a fair bit of support in the electorate, I see such a party as a risk to the second element needed to get Mongolia out of the rut of cycles of new, but unenforced legislation and regulation coupled with populism that feeds on a lack of substantive debates.

Let’s say an anti-corruption party would win some non-negligible number of seats in the UIX in the 2020 election. That would give it a platform to hold government to account and to systematically examine policies for their corruption implications. That would be terrific.

But what position would this party take on raising teachers’ or doctors’ salaries, for example? Yes, there is an anti-corruption angle to teachers’ salaries, of course, but the real concern at the moment is grand, political corruption, not the day-to-day level of corruption that may also be plaguing Mongolian society. Sure, that “regular” corruption is also important to attack, but what I mean to say is that I would hope to see more political forces in parliament that offer a substantive position on the whole range of important choices Mongolia and Mongolians are facing. And, political culture would very much benefit from vaguely consistent positions on a range of issues by political actors, say broadly liberal vs broadly social-democratic policies. These ideological mantels are sometimes claimed by the MPP and DP, but so far, those claims have been largely meaningless in policy terms, I think.

Or, take another issue that has more grand corruption implications, perhaps, a sovereign wealth fund. Several such funds have been implemented in the past, and current political leaders have advocated for these again. Well, drawing on the lessons of the SME Fund, governance structures around such a fund should be constructed very carefully and that is an area where an anti-corruption party may be instrumental. But beyond the safeguarding against corruption and conflict of interest, what about the orientation of such a SWF? Would an anti-corruption party choose to emphasize the investment for future profit approach to an SWF (a liberal position that would emphasize taking funds out of Mongolia, basing decisions entirely on profitability criteria), or would it see opportunities for investment in the education of Mongolians or in diversification and employment opportunities within Mongolia (a roughly more social democratic position)?

When you line up MPP policies and compare them to DP policies, there is no ideological pattern to be found in either and voters would be unable to guess what position these parties would take on particular initiatives or challenges in the future.

So, an anti-corruption party would run the risk of being so focused on anti-corruption measures that it would neglect political discourse about other pressing issues.

Opportunities in an Anti-Corruption Coalition

To really give Mongolian democracy a boost, a coalition of two or more new/revived parties that are dedicated to anti-corruption and agree on the measures by which to achieve that goal, but differ in consistent ways on other political issues would offer more promise.

There are several different ways in which such a coalition could work, I think. Here are two:

  1. Planned obsolescence
  2. Elements of a shared platform

Ad 1. A single, true anti-corruption party might pursue an anti-corruption agenda only. It would dedicate any negotiating power it would derive from an electoral result to pushing through an anti-corruption agenda that would be specified in a specific and concrete election platform. If this agenda was passed, MPs could resign their seats, or if this “success” came within a certain short period before the next election, they might serve out their term, but the party would then dissolve for the subsequent election.

Ad 2. What if a coalition of parties agreed to a common anti-corruption platform, but competed over other issues? The practicalities would depend somewhat on the nature of the electoral system adopted, for example in first-past-the-post ridings, members of the coalition would probably want to agree not to compete, while proportional representation would be quite open to competition.

This coalition would agree on very specific platform items aimed at the shared anti-corruption goals, but would then leave it up to coalition members to specify other areas of policy. You might thus have two parties agreeing on public service reforms that would bolster the service’s independent, but at the same time competing with different visions for how to promote rural employment.

In the formation of a government, coalition members would be bound to their original agreement independent of whether they joined in a coalition together, individually or sat in opposition.

For a subsequent election, coalition members could review the anti-corruption achievements and decide whether they would renew the arrangement for another election or not.

[Addition Nov 21:] Parallels to DP Origins

When I was speaking about this more with Mendee, he reminded me that some of what I’ve written about here is instructive to think about in terms of the origins of the DP and thus the current party duopoly.

The foundation of the DP and its original components was focused on opposing the MPRP and bringing about democracy. It was an anti-party just as some parties might emerge now that could be anti-corruption. But that has also been the DP’s achilles heel and, ultimately, one of the weaknesses of the Mongolian political system. Namely, the DP never developed any kind of coherent ideological or policy platform. Yes, there were attempts by some to push the DP in the direction of (economic) liberalism, but these attempts never took root.

For different reasons, the MPRP also abolished its ideological and policy core, so that Mongolia has ended up with two dominant party that stand for nothing in particular in terms of a vision for Mongolia’s development.

Yet, the DP’s obsolescence was not planned for. And, the party’s inability to reinvent itself with a policy orientation has come to haunt Mongolian politics via patronage politics and corruption, as has the MPP’s.

That is precisely the risk that an anti-corruption movement focused on establishing a new political party faces.


I hope that any activists hatching plans for new parties or the revitalization of existing parties consider not only their anti-corruption motivations, but think beyond these to a renewed ideological competition that would offer voters an opportunity to voice their views on particular visions of Mongolia’s development.

About Julian Dierkes

Julian Dierkes is a sociologist by training (PhD Princeton Univ) and a Mongolist by choice and passion since around 2005. He teaches in the Master of Public Policy and Global Affairs at the University of British Columbia in Vancouver, Canada. He toots and tweets @jdierkes
This entry was posted in Civil Will Green Party, Constitution, Corruption, Democracy, Governance, Ikh Khural 2020, Law, National Labor Party, Party Politics, Policy, Politics, Populism, Protest, Social Movements and tagged . Bookmark the permalink.

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