Jun. 28 – Today is the day for Mongolians to vote in the 2012 Parliamentary Election. The Mongolian 76-member legislature – the Grand Khural – is sovereign with ultimate power over laws.
The Parliamentary Election of 2012 is scheduled to be carried out from 7 a.m. to 8 p.m. today, June 28. Due to the election, 11 political parties and two coalitions have submitted their platforms and nominated their candidates for new proportional representation party lists and majoritarian electoral ridings.
But the main fight will be between two major parties – the Mongolian Democratic Party (MDP) and the Mongolian People’s Party (MPP). The latest polls suggest the MDP has now snuck ahead of the center-left MPP.
The other remarkable entity in this year election is the former Mongolian president Nambar Enkhbayar, who was arrested in April on corruption charges that he insists were fabricated.
After Enkhbayar’s defeat in the 2009 presidential elections, he fell out with the MPP and formed his own party using the MPP’s old name, the Mongolian People’s Revolutionary Party (MPRP). Many in the MPP’s left wing jumped ship with him.
“He has become a protest leader representing the rebels in both major parties,” according to local Pollster Sumati.
However, with respect to foreign investment, the main players on both sides of the election remain broadly supportive of foreign capital.
“Even with popular voter support for resource nationalism, authorities are still realistic and will not push it too far, because obviously they need high economic growth,” Frontier Securities, an Ulaanbaatar-based firm, said in a note to clients.
Over the last 20 years, the voter turn-out for parliamentary elections in Mongolia has been gradually declining. In 1990 it was 98 percent, in 2000 it stood at 82 percent, while the last parliamentary election in 2008 was only 74 percent, according to date from the Institute for Democracy and Electoral Assistance.
In accordance with the new election law, which passed parliament last December, in order to gain a seat in the parliament, a political party must get 5 percent of the total national vote.
For the last 20 years, Mongolia has had a conflated democracy and a market economy, and is now experiencing what Fortune magazine called “Mongolia’s wild ride to capitalism.” This “wild ride” has prompted Transparency International to rank Mongolia 120th in terms of perceived public-sector corruption out of the 183 countries surveyed in 2011. A gold and copper-mining rush has also contributed to cupidity and lawlessness.
As Professor Morris Rossabi of Inner Asian History at Columbia University writes in one of his items about the country, “the government’s sweetheart deals with foreign mining companies, with the attendant corruption and environmental depredation, have plagued the country.”
He argues that Mongolia nowadays is not the success story often portrayed in official reports and in the Western media.
In 1990, when the country broke away from communism and turned to international financial agencies for assistance, a very few Mongolians who understood the operation of a market economy became the principal beneficiaries of its privatization, while the vast majority of the population gained nothing.
As a result, Mongolian society has faced an increasingly inequitable distribution of income. Unemployment has grown to at least 20 percent of urban residents. Homelessness, alcoholism, crime and domestic abuse have also increased sharply.
The disparity between rich and poor is only widening in spite of the national economy expanding at the fastest pace in all of Asia last year.
As for the foreign investors, the majority of them are just waiting.
“We’re in a pre-election phase in Mongolia, so the investment community is waiting to see what happens,” Chris Mardon, managing director of Australia-based Modun Resources, told Reuters.
Others believe that there is “a risk that in the future, companies will be required to transfer more funds to ordinary people in the form of corporate social responsibility.”
Mongolian Mining Corp., the nation’s biggest coking coal exporter, slumped to a record low on speculation investment rules will be tightened after this week’s parliamentary elections.
The Hong Kong-listed coal producer fell 3.1 percent to HK$4.70 at the close, the lowest since the shares started trading in October 2010.
Mongolia has already imposed restrictions on mining in forests or river areas, a moratorium on new licenses, and a new law designed to limit foreign ownership of “strategic” sectors.