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New President, new equations

8th of 8, 2017
Photo by B.Rentsendorj

This year’s Presidential election was the first time a second round of polling was necessary, but apart from that, what was most notable about this election was that if the candidates’ expenses ran into hundreds of billions of MNT, the campaign promises exceeded that amount by several times. Welfare payments, stopped because of the economic crisis, were restored. While the ruling party distributed MNT160 billion as childcare money, the opposition promised to repay citizens’ bank loans. It was sad to see how the candidates competed with one another in making monetary promises.

Such pandering to populism made many wonder if Mongolia had become Venezuela or Cuba. All our three million citizens were promised free shares of Erdenet Mining Corporation, besides the shares they already have in Erdenes Tavan Tolgoi. Nobody seemed to remember we were in an economic crisis until only the other day and had just started to come out of it with IMF help. All the hardship of the past months, a whole year’s work with the IMF to stand up again, all the decisions taken and the discipline promised -- they vanished as parties made the election a contest of offering largesse.

Mongolians have thus paid a high price to have a new President. There is now both local and international interest in the answer to the question: What kind of a President will Kh.Battulga be? Among the first foreign guests who Battulga officially met were the Ambassadors of the Russian Federation, China, Japan and the USA. Our new President asked the last for assistance in bringing back to Mongolia money now in offshore accounts. After this, he told Parliament that he would like to recall the Mongolian Ambassadors to the UK and Sweden, the former being ex-Prime Minister S.Bayar.

 BATTULGA VS THE MPP

Even with the formal end of a longish election season, politics will continue to be important. President Battulga would need to assert his position vis-а-vis the Mongolian People’s Party (MPP), which has a large majority in Parliament. He has already started building his own team by appointing an ex-Speaker of Parliament, Z.Enkhbold, to head the President’s Office, a move seen as preparing for “battle” over the next four years. Both the President and the Democratic Party would also be closely watching the moves by the ruling MPP to control the new power structure.

M.Enkhbold, who lost to Battulga, has already announced that the MPP will hold its conference in September. Taking responsibility for his defeat in the election, he may have to step down as party leader, which might mean a new leader having a new leadership group around him. That way, the MPP conference is likely to shape the country’s political outlook in the coming years.

The autumn session of Parliament would coincide with the MPP conference. The agenda for the session is ready. Discussion of the draft amendments to the Constitution is listed as the fourth item. This important issue did not receive due care as everyone was busy with the election campaign and, uncertain of its success in the election, the MPP did not wish to draw public attention to it. However, now that they have lost, they are likely to focus on diluting the President’s authority, weakening the new President’s capacity to trouble the ruling party.

The working group set up by the Speaker conducted studies on the proposed amendments, as procedurally required, and submitted its report and conclusions on 25 May. Now, they will be presented for public discussion, and the feedback will be incorporated in the final draft that is to be placed before Parliament in September. Since the amendments will affect some basic principles of the Constitution, the public discussion is expected to be robust, and could significantly alter the present draft.

In their present form, the proposed amendments refer to
-    the division of power between Parliament and the Government, ensuring a proper balance between them, and monitoring the way it is expected to work;
-    clarity in demarcating the rights and responsibilities of the President;
-    the composition of the General Council of Courts to ensure the independence of the courts and judges; and to clarify the principles to govern the appointment of judges and the Chief Justice.

It is clear that the focus is on “pulling out the President’s teeth” one by one, and the overall goal is to increase the powers of the Government and the party with a majority in Parliament.

One proposed amendment would take away the President’s present right, granted by Article 26.1 of the Constitution, to initiate a law, instead limiting it only to members of Parliament and the Government.

Another calls for deletion of Article 33.1 of the Constitution, which reads, “The President shall give directions to the Government on issues that are under his full rights.” The Head of State will be left with no authority to give such directions, allowing the Government, usually run by the majority party in Parliament, a free rein.

Several amendments are aimed at drastically curbing the President’s ultimate power to appoint the chief justice and other judges of the Supreme Court and other courts. At present, in most of these cases, a list of names is sent to Parliament by the General Council of Courts and after Parliament approves all or some of the names, it is the President’s prerogative to make the final appointment(s).
Basically, the proposed amendments seek to give the authority to make the choice of judges to Parliament – and, by extension, to the party which has a majority there --seeing the President as a rubber stamp to make the actual appointment. “The President shall appoint Supreme Court judges, within 72 hours of Parliament choosing them from a list submitted by the General Council of Courts,” runs one amendment, while others propose fundamentally the same procedure for the appointment of other judges. 

It is premature to speculate on the final form of the amendments, but it is fair to guess that the MPP will go all out to make the President a figurehead as also that the new President will not surrender his prerogatives without a good fight, even though the numbers are stacked against him. The autumn will most likely see a nationally elected President pitted against a nationally elected Parliament. To make the contest more even is the fact that the number of votes received by Kh.Battulga to become President is almost the same as was together polled by the 65 MPP members to get into Parliament last year.

BATTULGA AND MINING

The active role Ts.Elbegdorj played in mining matters caught many in political circles by surprise. He was not much on the scene when the investment agreement for Tavan Tolgoi was being discussed, but we now understand that this is because he always had his Motherland Gift plan. We all know what happened later and the fate of Erdenes Tavan Tolgoi is still not clear.

We cannot guess how and how fast the new President can and/or will flex his muscles. After all, eight years ago Elbegdorj’s Democratic Party had 28 MPs and was part of a coalition Government, while now Battulga faces a parliament where the MPP has an absolute majority, and more, with 65 seats. All depends on how aggressive President Battulga will be in exercising his truncated powers.

We have to wait and see how he moves on Oyu Tolgoi and the other large projects but it is almost certain that Energy Resources will not be part of any Tavan Tolgoi project. Not just Battulga, a group in the MPP also favours a Mongolian state-owned enterprise – and not a private company -- as partnering the Chinese side in the Tavan Tolgoi consortium. Their wish is to make Erdenes Tavan Tolgoi another Erdenet Copper. However, even if Battulga and the MPP agree on keeping Energy Resources out of Tavan Tolgoi, there could well be other issues about the mega project on which the Government and the President could lock horns.

President Battulga’s involvement in the mining sector could very well match his immediate predecessor’s. Several paragraphs in his manifesto referred to the mining sector, and he has made known his strong feelings on a number of issues such as holding on to licences without any activity on the ground, illegal ownership of resources, putting revenues from mineral resources into a special fund and using the fund to promote the development of non-mining sectors to generate employment, encouraging proposals and initiatives to give citizens equitable share of ownership of natural resources, and enjoying the benefits.

The following two paragraphs from the manifesto are significant.
-    To support industrial investment and mega projects aimed at establishing an industrial complex including steel plant, copper smelter and petrochemical plants, and followed by development of processing and light industries in Mongolia;
- To support the policy of establishing a local railway network approved under the State policy on railway transportation, building railway routes directed to the markets of the two neighbours and the world market.

One of these can mean fresh negotiations on the Sainshand industrial complex, and some conflict with the Government’s already made decisions on the construction of a steel plant in Darkhan, a copper smelter in Khanbogd, and an oil refinery in Sainshand.

And we most certainly should not forget the railway. During the campaign Battulga defended himself and his company against charges of non-performance in building the 200-km Tavan Tolgoi-Gasuunsukhait railway by saying that “a billion-dollar railway cannot be built for $200 million”. That is the sum he had been paid by the Government – admittedly, for only a small part of the project – and many do agree with him that much construction work had been completed. Actual construction of the narrow gauge railway is yet to begin, and it would be interesting to see how the President, who had been opposing the choice of the narrow gauge for almost all his life, now reacts to decisions of the Government. And that will not be the only issue where the Government and the President find themselves on opposite sides.

BATTULGA AND PUTIN, XI JINPING

Russia and China have signed 40 agreements in recent times, and their partnership is marked by frequent meetings between their leaders. So how will our President fit into this club of neighbours? Elbegdorj was lauded for his role in conceptualizing the huge trade network called the “Mongolia-Russia-China economic corridor”. Will the corridor idea continue to flourish under Battulga. His manifesto said the following:

-    To develop the regional economic corridor connecting the two neighbours, expand re-exports, intensify the activities of free economic zones, increase the trade cooperation with third neighbours, and initiate the reform of the legal environment that supports investment;
- To deepen the strategic partnership with Russia and China, support the policy of developing and expanding the mutually beneficial economic cooperation.

This should clearly reassure those who see threats to the expansion of the mutually beneficial partnership with the two neighbours from the new President’s perceived nationalistic views. The economic corridor is an ongoing project that was initiated and developed by some influential members of the Democratic Party. By developing this project further, Battulga will enhance his party’s reputation and create the base for success in coming elections.

S.Bold-Erdene


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