Sluggish Economy Casts Shadow Over Mongolian Elections

By Grace Browin 29 June 2016

ULAANBAATAR, Mongolia — Mongolians vote in parliamentary elections Wednesday with sentiment weighed by a sharp downturn in the landlocked Asian nation’s crucial mining sector, rising unemployment and political disillusionment.

The Democratic Party could lose its majority in parliament, known as the State Great Khural, to the opposition Mongolian People’s Party a year ahead of the 2017 presidential election. But with no major policy offerings on the table and an economy pummeled by the global slump in commodity prices, it’s unclear what options Mongolia has for reviving its fortunes.

The parliamentary elections are the seventh since the country made a peaceful transition to democracy in 1990. Yet disillusionment with the political process in the country — recently dubbed “an oasis of democracy” by U.S. Secretary of State John Kerry — is growing among younger voters, whose turnout has steadily declined in recent years.

Amgalan Sukh-Ochir, 30, who works in marketing, said he plans to boycott the elections.

“In the last elections when the DP made all these great promises for prospering, I decided to support them, but look where we are now. I don’t think they’ve achieved much,” he said.

Mongolia’s mining- and animal herding-dependent economy has been dragged down by weak domestic demand and a sharp decline in exports, impoverishing thousands of former herders who had moved to its few cities looking for jobs. Economic growth has slipped from 17.5 percent in 2011 to just 2.3 percent last year in the resource-rich nation of 3 million people, one-fifth of whom live in poverty.

Both the ruling Democratic Party and its main rival have campaigned on the promise of more jobs.

“The main issue is, No. 1, to revive the economy,” said Bulgantuya Khurelbaatar, secretary of the opposition Mongolian People’s Party. She said the party aims to build 100 factories in 21 provinces that would create about 40,000 new jobs, though she didn’t say how.

It’s unclear what measures or resources are available to stimulate the flagging economy.

Coal, copper and other mineral resources make up 94 percent of Mongolia’s exports. But with demand in China weakening as its economy cools, Mongolia’s own growth is forecast to fall below 1 percent this year.

Foreign investment in the country has slowed to a trickle, though mining giant Rio Tinto announced in May the launch of the next stage of a multibillion-dollar gold and copper mine.

Still, critics of government agreements with mining companies complain that too little of Mongolia’s mineral wealth benefits the general public.

Some observers see recent changes to the electoral process as handicapping smaller parties and female candidates.

“They have closed some space for smaller political parties, as majoritarian systems do tend to benefit two main political parties,” said Ashleigh Whelan, country director for the International Republican Institute, a U.S.-based group with the stated aim of promoting democracy globally.

“This can reduce the opportunity for lesser-known candidates, new candidates, youth, women and those candidates who may not be a guarantee in terms of winning,” Whelan said. Her organization does not expect either party to secure an overwhelming majority.

In its latest National Human Development Report, the United Nations Development Program found that only about 45 percent of Mongolians aged 18-34 have voted in recent elections, compared to an overall turnout of 65 percent in 2012.

Skepticism has grown after the ruling party recently offered citizens 300,000 tugriks ($155) to sell 30 percent of their promised shares in the state-owned coal mine, Erdenes Tavan Tolgoi. So far 1.2 million of 1.65 million shareholders have applied to sell their shares to the government.

“I think it’s illegal to tell you the truth,” said Khurelbaatar of the opposition party. “This is right before elections. It seems to all political parties that they’re actually trying to buy off votes.”

The Democratic Party did not respond to requests for comment.