Ruling party defeated in Mongolian parliament elections

ULAANBAATAR, Mongolia – The opposition Mongolian People’s Party has won a decisive victory in parliamentary elections in the landlocked nation where a fall in commodity prices has sent the economy into a sharp decline.

The head of the national election commission said Thursday that the MPP won 65 out of 76 seats in the national legislature, formally known as the State Grand Khural. The ruling Democratic Party won just nine seats while independents and smaller parties won two seats.

The MPP is the former communist party that ruled Mongolia for 70 years before the country’s transition to democracy and a free market economy after the collapse of the former Soviet Union.

Under Mongolian law, the majority party in parliament forms a new government and appoints the prime minister and speaker of the legislature.

“The Mongolian people have put their trust in the MPP,” party chairman Enkhbold Miegombo said in a speech early Thursday. “We understand there is a huge responsibility behind this trust. We will work hard to improve the current economic situation and falling reputation of Mongolia in the international arena,” he said.

Enkhbold Zandaakhuu, speaker of the parliament and head of the Democratic Party, accepted the result, saying “the Mongolian people have made their choice. We will respect this choice.”

It was the seventh parliamentary election since the country peacefully transitioned to democracy in 1990, and the result puts the MPP in a prime position to retake the presidency in a vote next year.

Rising unemployment, billions of dollars in government debt and disillusionment with the political system were considered major factors in the election in the nation of just 3 million sandwiched between China and Russia.

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 per cent in 2011 to just 2.3 per cent last year, leaving one-fifth of the population in poverty. Amid declining demand for coal, copper and other mineral resources that make up 94 per cent of Mongolia’s exports, growth is forecast to fall below 1 per cent this year. Foreign loans begin coming due next year, posing another potential crisis.

With the decline in resource prices, foreign investment has slowed to a trickle, although mining giant Rio Tinto in May announced the launch of the next stage of a multibillion-dollar gold and copper mine.

Mongolia’s lively democratic system is a rarity in a region characterized by one-party states and authoritarian leaders, although its integrity was questioned after the ruling party recently offered citizens 300,000 tugriks ($155) each to buy back 30 per cent of their promised shares in the state-owned coal mine, leading to accusations of vote buying.