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Three party 75:25 coalition Government will be formed by DP, CWGP and JC

According to leading Mongolian news portal news.mn on July 19, 2012 (http://politics.news.mn/content/114650.shtml) heads of negotiations taskforces of Democratic Party of Mongolia, Civil Will Green Party and Justice Coalition have made statement regarding outcome of negotiations to form a Coalition Government as a result of Parliament Elections of 2012

  • Head of DP Taskforce Kh.Battulga has introduced that , as a result of negotiations, three political entities have reached decision to establish Coalition Government and signed a Declaration
  • The Declaration states, among other things, “ Activities of Coalition Government of DP, CWGP and JC will be based on “ Mongolian person” platform of DP and reflect certain clauses of election platforms “ Life “ of CWGP and “ Five Revolutions to Save Mongolia” of JC. Action program of Coalition Government has been prepared. Implementation of action program will be informed openly and transparently to citizens.”
  • Coalition Government will be formed in 75:25 proportion with 75 % to DP and CWGP and 25% to JC. The platform leaves open the right to independents to join
  • Tomorrow united session of Parliament will be done and after electing Parliament Speaker(Chairman) , Prime Minister will be proposed and bill on Government Structure proposed which will clarify how many ministries will be there, how many Ministers will be from Parliament and how many from outside
  • Coalition Agreement reflects fundamental principles till 2016, so Coalition Government will not fall apart on the way
  • Main principle will be stability and productivity of Coalition Government during its full powers
  • Opposition will not be discriminated against and there will be cooperation with it

Further according to news.mn, (http://politics.news.mn/content/114651.shtml), Mongolian People’s Party Steering Council and Caucus representatives stated

  • Steering Committee proposed and the Caucus approved nominating U.Enkhtuvshin as Party Chairman, M.Enkhbold as Deputy Parliament Speaker and N.Enkhbold as MPP Caucus Leader
  • Issue of Party Chairman will be discussed at the MPP Conference in July 24,2012
  • MPP is against dividing Minerals Resources and Energy Ministry, Social Protection and Labor Ministry, Justice and Interior Affairs as proposed by DP
  • MPP is against increasing number of ministries
  • MPP supports that  one third of cabinet members to be from Parliament or that other than Prime Minister cabinet members don’t have to be MP-s
  • MPP is strictly supporting its two successful nominees that were not allowed to sworn in(in that case number of MPP MP-s would be 27). MPP Caucus leader stated that depending on the outcome of this issue MPP Caucus will decide how to participate in first united session of Parliament
  • After revote in two districts and 2 MP-s from Ovorkhangai come in DP:MPP ratio would be 31:29. Therefore revotes should be done urgently

Frontier Securities comments

  • In line with our expectations in our research note “POST ELECTION POLICY ANALYSIS: UNCERTAINTY FOR FOREIGN INVESTMENT, POPULIST AND RESOURCE NATIONALIST PRESSURE ON POLICIES” of July 17,2012 DP was successful in making Coalition Government broad based, effectively isolating MPP in the Parliament except independents. It remains to be seen if isolation of MPP will work and Mongolian state machinery will function smoothly
  • Communications from MPP are also in line with our expectations of increase in politization, polarization, confrontation and divisiveness in Mongolian politics to come
  • It is still not clear what settlement has been reached between DP and JC on crucial issue of prosecution of controversial ex-President, Chairman of MPRP N.Enkhbayar on corruption charges as well as role for ex-Prime Minister, Chairman of MNDP M.Enkhsaikhan
  • For investors, development partners and other stakeholders never-ending change in Government structure everytime Mongolian authorities change signals inconsistency and instability of Government structures

Dale Choi | Chief Investment Strategist | Frontier Securities | #705, Blue Sky Tower, Peace Avenue 17, 1st khoroo, Sukhbaatar district, Ulaanbaatar, Mongolia| Office: +976 7011999 | Mobile: +976.99103371 | Email: This email address is being protected from spambots. You need JavaScript enabled to view it.">This email address is being protected from spambots. You need JavaScript enabled to view it.