1 MONGOLIA'S AUTOMOTIVE GASOLINE IMPORTS INCREASE BY NEARLY 39 PERCENT WWW.XINHUANET.COM PUBLISHED:2017/11/19      2 HARUMAFUJI-FUNDED MONGOLIAN SCHOOL DAMAGED WWW.NHK.OR.JP PUBLISHED:2017/11/19      3 FITCH REVISES OUTLOOK ON MONGOLIA TO POSITIVE; AFFIRMS AT 'B-' WWW.FITCHRATINGS.COM PUBLISHED:2017/11/18      4 NORWAY'S STATE FUND 'NEEDS TO DROP OIL AND GAS INVESTMENTS' WWW.BBC.COM  PUBLISHED:2017/11/17      5 BASIC GUIDELINE APPROVED TO DEVELOP ULAANBAATAR IN 2018 WWW.MONTSAME.MN  PUBLISHED:2017/11/17      6 GOBI DESERT SEES WORLD'S LONGEST TRAFFIC JAM WWW.NEWS.MN PUBLISHED:2017/11/17      7 AUTOMATED FORGING LINES FOR MONGOLIAN METALLURGICAL PLANT WWW.NEWS.MN  PUBLISHED:2017/11/17      8 SOUTH CHINA COASTAL CITY TO HOST ETHNIC MONGOLIAN CARVINAL WWW.NEWS.XINHUANET.COM PUBLISHED:2017/11/17      9 2018 MONETARY POLICY DIRECTION ADOPTED WWW.MONTSAME.MN  PUBLISHED:2017/11/17      10 COMCAST, VERIZON APPROACHED TWENTY-FIRST CENTURY FOX TO BUY SOME ASSETS: SOURCES WWW.REUTERS.COM PUBLISHED:2017/11/17      НЗДТГ: ИРГЭД САРЫН ТҮРЭЭСИЙН 300 МЯНГАН ТӨГРӨГӨӨ ТӨЛӨӨД 15 ЖИЛИЙН ДАРАА БАЙРАА ӨМЧЛӨХ БОЛОМЖТОЙ БОЛНО WWW.BLOOMBERGTV.MN  НИЙТЭЛСЭН:2017/11/17     ERDENE RESOURCE DEVELOPMENT: ХАЙГУУЛЫН АЖИЛД ЗАРЦУУЛСАН ХӨРӨНГӨ 28 МЯНГАН КАНАД ДОЛЛАРААР НЭМЭГДСЭН WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2017/11/17     11-Р САРЫН 16-НЫ ӨДРИЙН АРИЛЖААНЫ МЭДЭЭ WWW.MSE.MN  НИЙТЭЛСЭН:2017/11/17     ЗАРИМ АЖ АХУЙН НЭГЖИЙН ТЭСЭЛГЭЭ ХИЙХ ТУСГАЙ ЗӨВШӨӨРЛИЙГ ХҮЧИНГҮЙ БОЛГОЖЭЭ WWW.MONTSAME.MN НИЙТЭЛСЭН:2017/11/17     ТӨРӨӨС МӨНГӨНИЙ БОДЛОГЫН ТАЛААР 2018 ОНД БАРИМТЛАХ ҮНДСЭН ЧИГЛЭЛИЙГ БАТАЛЛАА WWW.DNN.MN  НИЙТЭЛСЭН:2017/11/17     ДНБ 5.8 ХУВИАР ӨСӨХӨД ТАТВАРЫН СУУРЬ БААЗ НЭМЭГДСЭН НЬ НӨЛӨӨЛЖЭЭ WWW.BLOOMBERGTV.MN  НИЙТЭЛСЭН:2017/11/17     МОНГОЛБАНК ИНФЛЯЦИЙГ 8 ХУВЬД ТОГТВОРЖУУЛНА ГЭВ WWW.MONTSAME.MN  НИЙТЭЛСЭН:2017/11/17     ХУВЬСАН ӨӨРЧЛӨГДӨЖ БУЙ НҮҮРСНИЙ ЗАХ ЗЭЭЛД МОНГОЛ УЛСЫН ГҮЙЦЭТГЭХ ҮҮРЭГ WWW.MONGOLIANMININGJOURNAL.COM  НИЙТЭЛСЭН:2017/11/16     ҮСХ: НҮҮРСНИЙ ЭКСПОРТ АРАВДУГААР САРД ӨСӨЛТТЭЙ ГАРАВ WWW.MONGOLIANMININGJOURNAL.COM  НИЙТЭЛСЭН:2017/11/16     “АЙТҮҮЛС” ХК-ИЙН ХОЁРДОГЧ ЗАХ ЗЭЭЛИЙН АРИЛЖАА 2017.11.16-НД ЭХЭЛНЭ WWW.MSE.MN  НИЙТЭЛСЭН:2017/11/16    

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