Mongolian PM kicked out by MPs

Opponents charge incompetence, corruption in economic downturn

Mongolian lawmakers voted on Wednesday to remove Prime Minister Norov Altankhuyag amid concerns about a serious economic downturn as a result of the falling prices of gold, copper and coal, and a slump in foreign direct investment.

Of the 66 members of parliament who voted, 34 were in favor of ousting Altankhuyag, Mongolian television showed. Ten members of the body, including eight in his own coalition government, did not show up.

It will now be up to the coalition government to select a new candidate, who will have to be approved by the president and confirmed by parliament.

Altankhuyag was also criticized for incompetence, cronyism and corruption by the opposition Mongolian People's Party and some factions within his party - the Mongolian Democratic Party.

The government has been in turmoil in the past month, as seven ministers, including the ministers of mining and foreign relations, resigned after Altankhuyag won parliamentary approval to consolidate ministries from 16 down to 13.

That led to calls from the opposition MPP for the prime minister to stand down. Eventually, people from his own government demanded his resignation.

The political fight has distracted the government of the resource-rich country, landlocked between Russia and China, from passing a budget.

Parliament rejected a budget proposal for the second time on Oct 31, amid criticism of exorbitant spending and overly optimistic economic projections. Mongolia's fiscal stability law takes full effect next year and will cap debt at below 40 percent of gross domestic product.

Big troubles

"It's quite clear that whoever will run next year will have big, big troubles even paying state employees' salaries," said Luvsanvandan Sumati, head of the Sant Maral Foundation polling group.

One key to reviving foreign investment, which has slumped 59 percent this year, is the resolution of a long-running dispute over the huge Oyu Tolgoi copper mine whose ownership is shared between Mongolia and mining giant Rio Tinto's Turquoise Hill Resources arm.

Rio suspended construction of a $5.4 billion underground expansion project in August 2013 because of disagreements that included construction costs.

Altankhuyag was expected to sign a memorandum of understanding before bankers released $4 billion in project financing to help pay for the expansion.

Reuters - Xinhua

(China Daily 11/06/2014 page12)