Last week Mongolians went to the polls to vote for a new President. The Mongolian Presidential elections saw the victory of former Prime Minister Ukhnaa Khurelsukh of the Mongolian People’s Party (MPP). Khurelsukh won in a landslide, securing 68% of the votes against the 20,1% and 6%, won by Sodnomzundui Erdene of the Democratic Party (DP), and Dangaasuren Enkhbat of the Right Person Electorate Coalition, respectively.

Khurelsukh will take over from Khaltmaa Battulga, who was prevented from seeking reelection after a controversial attempt to amend the Mongolian Constitution. The MPP had in 2019 modified the Constitution in an effort to consolidate power and inserted a clause that limits presidents to one six-year mandate. The Mongolian Presidency is a largely ceremonial position; most power is held by the State Great Khural, Mongolia’s parliament, as well as Prime Minister and cabinet. Since 2016 the MPP holds a supermajority in the State Great Khural and consequently determines who the Prime Minister will be and who will make up the cabinet. Erdene, the DP candidate, had warned the Mongolian population against the possibility of a dictatorship under the MPP during the elections. Indeed, Khurelsukh is expected to grant the MPP a higher degree of control over the country’s levers of power.

Background to the Elections

Khurelsukh was forced to resign with his Cabinet on January 21, 2021, due to protests sparked by Mongolia’s response to Covid-19. By November 2020 the Mongolian State Emergency Committee imposed strict countrywide measures in response to community spread of Covid-19. However, these restrictions sparked public anger which stoked widespread protests demanding freedom and the right to assembly. Subsequently, protesters demanded the ousting of various authorities, including the Cabinet and the Prime Minister.

The Prime Minister’s resignation prompted skepticism; his position was stronger than ever, given the MPP’s control of the Cabinet and the Great Khural. It has become evident now that his resignation as Prime Minister was a tactic aimed at bypassing a constitutional requirement that would have otherwise barred him from running as President.

Khurelsukh’s actions have caused many concerns to arise within the general public, the opposition, and foreign observers. Polarization, court rulings, constitutional amendments, and presidential decrees, coupled with Khurelsukh’s background with the Mongolian military (of which he is now commander-in-chief as the President), show the fragility of the current political situation. Furthermore, Mongolia’s election took place during a critical time for its already suffering economy deeply affected by the pandemic.

Ulaanbaatar’s Balancing Act

Mongolia’s geo-economic positioning makes it extremely difficult for Ulaanbaatar to operate without factoring in Moscow and Beijing. In fact, despite extensive attempts undertaken by the various Mongolian governments, Moscow is still Mongolia’s primary energy provider, and Beijing buys circa 90% of Mongolia’s core exports. Additionally, given the country’s current economic crisis, it is to be expected that the government will decide to lean more toward either Moscow or Beijing.

It is yet to be seen whether Khurelsukh will follow Battulga’s foreign policy focused only on Russia while begrudgingly acknowledging China’s growing prominence to its south. However, there might be a turn in Ulaanbaatar’s foreign policy. In fact, during his previous mandate, Khurelsukh seemed to be willing to deepen cooperation with China, as he underscored in a meeting with Wang Yi in 2020. Notably, Khurelsukh also expressed his support for the one-China policy and its domestic and foreign policy.

Additionally, Mongolia’s possible turn to China is dictated by other factors as well. First, Beijing has offered major Covid-relief: Mongolia has so far signed deals for 4.3 million vaccine doses, the bulk of which is produced by China’s Sinopharm vaccine. Second, China has been Mongolia’s primary commercial partner since the fall of the Soviet Union. Back then, Ulaanbaatar, desperate for new economic partners, restructured its economy to meet China’s needs for raw materials. Then as now, the Mongolian mining industry remains vital for Ulaanbaatar to maintain a stable relationship with Beijing. As a result, China remains Mongolia’s top export destination and import supplier in the first quarter of 2021, according to data released by the Mongolian National Statistics: 92.5% of Mongolia’s total exports and 39.1% of its total imports. The mining sector occupies more than 50% of Mongolia’s GDP and roughly 70% of its exports.

Mongolia after the Elections

But overdependence on China’s willingness to buy from Mongolia is extremely dangerous. If Beijing were to close border-crossings, preventing the trade of goods, it would devastate Mongolia’s economy, as the Covid-19 outbreak has shown. Mongolia’s reliance on the mining industry also results in environmental strain and degradation that will, in the long run, engender more economic burdens. Mongolia has seen a gradual degradation of its land, 20.9% of which is available for mining while 44% to 90% is affected by desertification, partially due to mining externalities. It also comes as no surprise that Chinese firms partially own the companies charged with inflicting environmental damage on Mongolia. Therefore, China holds considerable stakes over Mongolia’s mining companies, on top of being its primary export destination.

Mongolia’s dependence on China will probably increase in the years to come. Beijing’s Belt and Road Initiative represents a unique opportunity for Ulaanbaatar to act as a logistical transit hub, given that it lies perfectly in between China and Inner Asia. The MPP has called for increasing Mongolia’s focus on expanding its mining sites, especially the Oyu Tolgoi and Tavan Tolgoi (the closest mines to the Chinese border), and expedite cross-border trade. This decision would grant China power to directly access Mongolia’s land (given Chinese companies own shares in the companies that control the mining sites). Another project that would increase Ulaanbaatar’s reliance on Beijing is Mongolia’s attempt to access the port of Caofeidian in Hebei province. Use of this harbor, which is three times closer than the only other alternative, the port of Vladivostok, would grant Mongolia maritime access; however, Beijing will become Ulaanbaatar’s gateway to conduct commerce with the rest of the world, hence increasing the risk of Mongolia becoming a sort of Chinese province in the future.

Khurelsukh will assume office on July 10th. Alongside his cabinet and Mongolia’s legislature, the new President will need to make tough decisions confronting climate change, geopolitical shifts in East Asia, and domestic challenges. The former MPP candidate, despite his ceremonial position as President, will still play a key role in directing Mongolia’s course of action during his term.

by: Riccardo Villa