Elbegdorj at Bloomberg

This post has received a buzzload of comments on its reposting on Mongolia Web News.

So it might be true. The president is presured by the foreign investors to get the deal in this session of parliament. But Elbegdorj only just comes in and wants to put his mark on the deal. “An equity share is not a good proposal,” he said in the interview. Indicating he want to change some basic rules of the game.  This leaves him between a rock and a hard place. So hee came in right in time to be able to be part of the deal, but it seems the choice is a deal he doesnt like or no deal at all. But it seems he doesnt want neither: He is asking the investors to hang on and give him time to get the deal he wants.

So if indeed the hard deadline is for July 10, what will happen if there is no deal struck? Will Ivanhoe Mines (IVN) leave? Will Rio Tinto back off? The future is unsure, but it looks like we will know a lot more when the horses start racing and the wrestlers are slapping their thighs on Mongolia’s natioanl Naadam holiday on July 11th.

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The Shoe Thrower?

Do you remember the Iraqi journalist Muntadhar al-Zaidi throwing a shoe at George W. Bush? The story and images were spread all over the media and internet. Brilliant entertainment. Though probably frowned upon by some, it must have been an inspiration to quite a few in the world as well.

Well, no we fast worward to Mongolia 2009. There is just a new President elected. Elbegdorj. And he is happy, celebrating his win with a crowd on Sukhbaatar square. You would expect people might throw their hat in the air. But then suddenly a guy in the crowd throws a shoe at Elbegdorj. He is captured by the police and later explains (from Mongolia Web News):

I was drunk and at one point I had to throw my shoes. I did not have any intentions. Just wanted to throw. When President George W.Bush visited Iraq, he was thrown a shoe as well.

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An overview of events is seen at OpenDemocracy:

There is an echo here of the events of January 2006 when a similar demonstration had led to forced entry into the MPRP building. Then, the same Elbegdorj had just lost his job as prime minister in a reshuffle prompted by the MPRP leadership’s desire to form a new cabinet with a range of other political leaders. The MPRP was accused of hijacking democracy, and popular protests led to occupationof and serious damage to its headquarters. Elbegdorj said at the time that “there was no risk of the situation escalating into unrest” (see “Mongolia’s democratic puzzle“, 18 January 2006).

But this time it went haywire exploding into destructive violence. But was this still a political protest? Most believe it had turned into vandalism possibly routed in unrest but definately not in election claims. Talking about those claims. The Asia Foundation releases their report on the election producure:

In 6% of the stations, observers identified individuals seemingly trying to influence the voting behavior of others. Most of these cases occurred in the Bayanzurkh district, and involved middle-aged adults. When queried at one station, the individuals denied any involvement in voter manipulation or influence, and they did not disclose their party affiliation.

In 86% of the station visits, there was no loitering near the station by local government or party officials. However, in 18 of the station visits, party officials and candidates were observed 4 times in different stations in Khuvsgul Aimag, and in 5 discreet stations in the Bayanzurkh district.

Irregularities, indeed. But seemingly not at the scale as the opposition have claimed. Now what is the effects of all this. For some more analysis have a look at Michael Kohn’s Ulan Bator Battles:

The electoral uncertainty comes at a particularly bad time. Foreign investors were excited by the prospect of a one-party majority, rather than a “unity” government, which was often mired in political infighting. The mining law, in particular, needs to be changed to ease heavy taxes — mining companies are eager to get new projects off the ground.

Now, investors are stuck in a “wait and see” mode until the country’s political strife dies down. Both Prime Minister Sanjaagiin Bayar and President Nambaryn Enkhbayar have called for calm in their respective addresses to the nation last week. But it will be Mr. Elbegdorj’s moves that matter most.

Reuters provides some background on the Mining controversy that has at least amplified the unrest:

The current law gives the state either a 34 percent stake or a controlling 51 percent stake in mining projects. An investment agreement with Ivanhoe Mines (IVN.TO: Quote, Profile, Research, Stock Buzz) and Rio Tinto (RIO.L: Quote, Profile, Research, Stock Buzz)(RIO.AX: Quote, Profile, Research, Stock Buzz) for the Oyu Tolgoi project, still under negotiation, would be the first such deal.

“I don’t think ownership stakes are a good idea,” said Julian Dierkes, a specialist in resources and public policy at the University of British Columbia.

“I wish the government would just collect cash and throw it in postal savings. If they make 3 percent on it, they’re set.”

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technorati: mongolia

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