1 RUSSIA WORLD CUP TROPHY ARRIVES IN MONGOLIA WWW.ECNS.CN PUBLISHED:2018/04/24      2 DODGY DOLLARS SEIZED BY MONGOLIAN CUSTOMS WWW.NEWS.MN PUBLISHED:2018/04/24      3 NEARLY 100 FOREIGN NGOS ACTIVE IN MONGOLIA WWW.NEWS.MN PUBLISHED:2018/04/24      4 CENTRAL BANK APPROVES REGULATION ON DIGITAL CURRENCY WWW.MONTSAME.MN PUBLISHED:2018/04/23      5 TOURIST ARRIVALS TO MONGOLIA UP 11 PCT IN Q1 WWW.XINHUANET.COM PUBLISHED:2018/04/23      6 CENTRAL ASIA TRIO TEST INVESTOR CONVICTION WWW.FINANCIALTRIBUNE.COM PUBLISHED:2018/04/23      7 YARMAG TWIN BRIDGES PLANNED TO OPEN IN NOVEMBER WWW.THEUBPOST.MN PUBLISHED:2018/04/23      8 TAKING A CLOSER LOOK AT MONGOLIAN CASHMERE INDUSTRY WWW.THEUBPOST.MN PUBLISHED:2018/04/23      9 CHINA TRASH BAN IS A GLOBAL RECYCLING WAKE UP CALL WWW.CNN.COM PUBLISHED:2018/04/23      10 INSURANCE SECTOR IN GDP WWW.GOGO.MN PUBLISHED:2018/04/23      МОНОС ГРУПП: ХАВДРЫН ЭМИЙГ ҮХРИЙН ЭЛЭГНЭЭС ТУСГАЙ ТЕХНОЛОГИОР ГАРГАН АВСАН WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2018/04/24     ОЛОН УЛСЫН ҮЗЭСГЭЛЭНД МОНГОЛЫН ПАВИЛЬОН ШИЛДГЭЭР ШАЛГАРЛАА WWW.GOGO.MN НИЙТЭЛСЭН:2018/04/24     БНЭУ-ААС ГАДААД ХЭРГИЙН САЙДЫН ТҮВШИНД 42 ЖИЛИЙН ДАРАА ХЭРЭГЖИЖ БУЙ АЙЛЧЛАЛ WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2018/04/24     МОНГОЛ, ОХУ-ЫН ХАРИЛЦАА ХОЛБООНЫ АСУУДАЛ ХАРИУЦСАН ТӨРИЙН БАЙГУУЛЛАГУУД ХИЛ ОРЧИМД АШИГЛАХ РАДИО ДАВТАМЖИЙН ЗОХИЦУУЛАЛТЫН УУЛЗАЛТ ХИЙЛЭЭ WWW.DNN.MN НИЙТЭЛСЭН:2018/04/24     АНЭУ-ЫН ЗАСГИЙН ГАЗРААС МОНГОЛД 200 МЯНГАН ДОЛЛАРЫН ТУСЛАМЖ ҮЗҮҮЛЖЭЭ WWW.EAGLE.MN НИЙТЭЛСЭН:2018/04/24     ТОП 100 ХК 2017 ОНД ₮1.45 ИХ НАЯДЫН ОРЛОГО ОЛЖЭЭ WWW.NEWS.MN  НИЙТЭЛСЭН:2018/04/24     ЖОНШНЫ ЭКСПОРТ I УЛИРАЛД ӨНГӨРСӨН ОНЫ МӨН ҮЕЭС 2 ДАХИН НЭМЭГДЖЭЭ WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2018/04/24     “ОЮУ ТОЛГОЙ” ХХК: 2018 ОНЫ ЭХНИЙ УЛИРАЛД МОНГОЛ УЛСЫН ЗАСГИЙН ГАЗАРТ 51 САЯ АМ.ДОЛЛАР ТӨЛСӨН WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2018/04/24     МОНГОЛЫН СПОРТЫН ХАМГИЙН ТОМ ГЭРЭЭ WWW.UBINFO.MN НИЙТЭЛСЭН:2018/04/23     ТАВАНТОЛГОЙ ХК: IV/26-НД 2017 ОНЫ НОГДОЛ АШИГ ХУВААРИЛАХ ТУЗ-ИЙН ШИЙДВЭР ТАНИЛЦУУЛНА WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2018/04/23    

A Cabinet Reshuffle Adds Volatility To An Ailing Mongolian Economy www.forbes.com

The ouster this month of Mongolia’s prime minister may not bring the small Central Asian country to ruin, but the parliamentary decision Sept. 7 to remove Jargaltulga Erdenebat over suspected graft detracts from the image of the dominant Mongolian People’s Party. The party, Mongolia's oldest and once the singular party under Mongolia’s pre-1990s socialist government, oversaw a quick economic rise through 2013 due to foreign investment in Mongolian mining. But from 2014 it saw the same economy slide to all-but-zero growth expected this year over falling prices and an exodus of Chinese capital.

In July, Mongolians elected President Battulga Khaltmaa of the country’s opposition Democratic Party after he pledged to stand up against the Mongolian People’s Party's massive rule in parliament. About 85% of legislators belonged to the party, better known as MPP, after elections in 2016. The party is considered friendly toward investors and its win last year prompted some analysts to predict economic rebound. Investors, including foreign mining firms, will be keeping two wary eyes on the MPP government's ability to govern during the economic crisis years.

In the boom cycle before 2014, mining firms from Australia, Canada, China and Russia were fervently digging up gold and copper in the country. They provided jobs and steady incomes to common Mongolians. After that year, investment tapered along with the world decline in commodity prices. The pullback in Chinese money particularly stung because China was Mongolia’s top source of investment. The International Monetary Fund has forecast growth in Mongolia of around 1% this year, less than half the rate of 2016 and the lowest of seven frontier economies that it tracks in Asia. The economy had “performed well” under Erdenebat’s government, says Alicia Garcia Herrero, chief Asia Pacific economist with the French investment bank Natixis.

“Political instability has been a long-standing problem for the country, so it is less a problem for existing investors but more or less frustrates new entrants,” she says. Erdenebat was thrown out under suspicion of signing government contracts with companies linked to cabinet members. “Although the ouster may help deter corruption, it also leaves investors with more uncertainty regarding dealing with the government in the future,” Garcia says.

The Democratic Party president, a real estate baron and former wrestling star, can influence policy decisions on public finances and investment in the mining sector. His calls will “have some bearing on the direction and pace of Mongolia’s economic recovery,” says Anushka Shah, assistant vice president and analyst with the Sovereign Risk Group at Moody's.

It’s unlikely, however, that anyone at the top will do anything to throw off development of large mining projects or compromise an IMF program that's designed to turn the economy around, Shah says. The IMF approved in May $5.5 billion for aid to the 3 million-population, largely poor landlocked country between China and Russia.

The impact of the PM’s departure should ease off shortly. Although thirty-three legislators from the PM’s own party voted for the ouster, his party still has what pundits call a “supermajority” in parliament. In any case, no Mongolian prime minister since 2004 has finished a four-year term, so Erdenebat's dismissal sets no records. The party should soon nominate a new candidate for prime minister, which may lead to a cabinet reshuffle within 45 days. The existing cabinet is unlikely to adopt major policies or reforms before then, Shah says.

“Our expectation is that as long as the MPP retains its supermajority, policy direction in Mongolia should remain largely unchanged,” she says.



Published Date:2017-09-13