Author: Julian Dierkes, UBC

Thanks to a cabinet change and a presidential election, the Mongolian People’s Party (MPP) consolidated its dominance in 2021. Consistently high COVID-19 infections finally began to decline late in the year, just as where an offer from RioTinto has arrived to potentially strike a (re)new deal(s) to restart the underground construction of the giant Oyu Tolgoi copper mine.

Ahead of the June presidential election, Ukhnaagiin Khurelsukh used minor demonstrations against his COVID-19 policies as an excuse to step down as prime minister. Looking back, it seems clear that this was a strategic decision rather than any contrition for the failures of the pandemic. Khurelsukh was replaced as prime minister by his cabinet secretary, Luvsannamsrain Oyun-Erdene.

This castling reduced Khurelsukh’s risk of being closely associated with any deterioration in the COVID-19 situation and appears to have enabled his landslide victory in the June 9 presidential election.

The election campaign has sparked democratic fireworks that seem to be turning into an ominous pattern in Mongolia – someone or a political event crosses a line that raises fundamental doubts about the stability of democracy. If so, then-president Khaltmaagiin Battulga claimed in April that the country was heading towards one-party rule. After observing an MPP-dominated parliament with an MPP president, so far it seems that these fears were unfounded and perhaps said more about Battulga’s reluctance to hand over the presidency.

Perhaps more concerning were the shenanigans surrounding the fratricidal unrest within the Democratic Party. A lack of clarity over legitimate leadership has led to a battle over the nomination of a presidential candidate. This delayed the nomination and therefore the party’s ability to campaign effectively.

Yet that challenge was largely within the party and the result of uncertainty over whether Battulga would be allowed to run for re-election under 2019 constitutional amendments that limited the presidency to one term. In the end, the party’s candidate, Sodnomzundi Erdene, received the support of less than 7% of voters.

Politically, perhaps the most interesting aspect of the presidential election was the result achieved by Dangaasuren Enkhbat, nominated by the upstart National Labor Party. A technological and social entrepreneur who was a deputy from 2008 to 2012, Enkhbat won more than 20% of the vote. While some have dismissed him as a candidate reserved for urban elites, he received some support across the country, and votes far beyond a small professional class in city neighborhoods.

While this suggests some momentum and the possibility of the National Labor Party supplanting the Democratic Party in the long run, the party’s candidate did not come close to winning a majority in October’s by-elections.

Prime Minister Oyun-Erdene was confirmed as chairman of the MPP party in December and appears firmly focused on his Vision 2050 agenda for comprehensive development and e-government programs. During the review of Nationally Determined Contributions ahead of COP26, a heightened awareness of the need for greater policy and regulatory attention to the climate emergency emerged. Discussions about the foreseeable end of the coal industry have at least begun.

COVID-19 infections have continued to drag the economy down, although at least industrial mining has been able to resume. China’s extremely cautious regime on the Mongolian border shut down the country on several occasions, leading to spikes in consumer goods prices and slowdowns in mineral exports, but these were temporary, as was a fuel shortage at the end. of summer. Inflation and persistent poverty remain significant challenges for fiscal and economic policy.

The darkest cloud over Mongolia’s economy has been dissatisfaction with agreements signed with RioTinto on the giant Oyu Tolgoi mine. An offer in December to write off government debt stemming from a 34% stake in the project appeared to be enthusiastically received by the MPP and suggests negotiations could move forward quickly.

Like much of the world, Mongolia is watching closely to see if the American-Chinese rivalry is evolving towards a bipolar situation that would leave the country at risk of being forced to choose sides between its instinctive affinity with democracies and its total economic dependence on China. Fortunately, President Khurelsukh signaled his focus on international relations during his attendance at the UN General Assembly, suggesting that this area of ​​policy-making which had languished under Battulga will receive particular attention. One option is for Mongolia to lean even more towards the UNsomething a proposed peacekeeping training center could accomplish.

Given the political constellation of an MPP president and prime minister and a sedentary party leadership, 2022 is likely to be a politically calm year that could lead to some implementation of the many development plans foreseen by Vision 2050, especially if a reconfirmed deal for the Oyu Tolgoi mine secures the long-term fiscal outlook. COVID-19 will continue to threaten Mongolia’s economic development, challenging the recovery of its tourism industry, but possibly also boosting the growth of agricultural production.

Julian Dierkes is an Associate Professor in the School of Public Policy and Global Affairs at the University of British Columbia. He is one of the main authors of the Focus on Mongolia Blog.

This article is part of a EAF Special Feature Series on 2021 in review and the year ahead.