Governing Party Flexes Muscles, Sacks Health Minister

UNCLAS SECTION 01 OF 02 ULAANBAATAR 000019 SIPDIS SENSITIVE SIPDIS E.O 12958: N/A TAGS: PGOV PREL ECON MG SUBJECT: Governing Party Flexes Muscles, Sacks Health Minister REF: Ulaanbaatar 461 SENSITIVE BUT UNCLASSIFIED - NOT FOR INTERNET DISTRIBUTION. ¶1. (SBU) SUMMARY: The Mongolian People's Revolutionary Party (MPRP)'s victory in a by-election last September gave them an absolute parliamentary majority. Pundits said it was only a matter of time before less cooperative, non-MPRP members of the coalition government, in place since January 2006, were shown the door. Last week, the MPRP made its first example out of Minister of Health L. Gundalai, who was squeezed out ostensibly for refusing to follow cabinet policy. Gundalai, generally popular but strongly disliked by members of the health profession and international organizations, had long topped the list of those expected to be tossed after the MPRP's victory, the only question was when. There is some speculation that now that he is gone, others may follow. END SUMMARY Parliament Pulls the Plug -------------- ¶2. (U) On January 4, Mongolia's State Great Hural (parliament) voted by a wide margin to sack Minister of Health L. Gundalai. The vote came after Prime Minister Enkhbold, with President Enkhbayar's consent, asked lawmakers to remove the Gundalai from his post, citing Gundalai's failure to work as a team player in the coalition cabinet, refusing to follow cabinet policy and his inability to properly manage the health sector. ¶3. (U) Gundalai was appointed Minister of Health in January 2006 as a reward for his support to the MPRP in bringing down the Democratic Party-led (DP) coalition government. While still a DP MP, Gundalai cast the deciding vote against his party's rule, defected from the DP to create his own political party, the Mongolian Popular Party (MPP),and was subsequently given the job as Health Minister under the MPRP-led coalition. ¶4. (U) MPRP reps now argue the MPRP is under no obligation to replace Gundalai with another member from the MPP as Gundalai's actions have invalidated any agreements that might have been reached between them when he was originally given the job. The erstwhile minister's sacking comes as no surprise to political observers in Ulaanbaatar, who fully expected the MPRP to rid itself of its more troublesome coalition government elements after MPRP gained an outright parliamentary majority in a by-election victory in Hovsgol Aimag this past September. ¶5. (SBU) Health professionals and international aid organizations have long been critical of Gundalai. Earlier this year he reportedly fired the heads of key hospitals, accusing them of corruption for renting out hospital space to private businesses and pocketing the rent. He removed the Mongolia Millennium Challenge Account Health Project Working Group head allegedly because she refused to agree to design and channel projects to match Gundalai's own corporate interests. (Note: She also happens to be the spouse of the President's Foreign Policy Advisor.) Apparently seeking to capitalize on popular sentiment against foreign miners, Gundalai also led an unsuccessful "occupation" of Boroo Gold's (a Canadian firm) mine seeking "Mongolia's share" of the US$40 million in "good will" listed in Boroo's prospectus. The MPRP recalled then Minister Gundalai to UB and distanced itself from his actions. These various moves were seen as political blunders that tarnished the government's image. ¶6. (SBU) Gundalai also forced Mongolia's health care system and professionals to hold "open clinics" on weekends, a move generally well received by the public but castigated by health care professionals as largely a waste of time in terms of delivering needed health care. ¶7. (SBU) Since his dismissal, Gundalai has aligned himself with the anti-corruption lobby group Healthy Society-Citizen's movement and is reshaping himself as a crusader against corruption, a platform he intends to run with in the 2008 parliamentary elections. To prevent Gundalai from becoming a political martyr, the MPRP appears to have cranked up its political hit squad, launching a smear campaign against him in the country's media. COMMENT: Alright! Who's next?!? -------------- ¶8. (SBU) It appears that the MPRP, with its one-vote majority, has so far maintained the fagade of a "National Solidarity Government," ULAANBAATA 00000019 002 OF 002 as several coalition minority partner members are still part of the government. But now that the ruling MPRP is no longer dependent on their support, it is free to dispose of less supportive coalition cabinet members. By firing Gundalai, the MPRP sent a strong message to its coalition partners, "Play ball or else." ¶9. (SBU) Several non-MPRP ministers are now seen as potentially vulnerable to future purges. Chief among them is the Minister of Industry and Trade B. Jargalsaikhan. Dogged by rumors of corruption, he has angered many in the international business community, especially the mining sector, by making grand, un-deliverable promises and claiming to have the authority to revoke mining license when he clearly doesn't. His US$18 million (USD) debt to the Japanese company Marubeni is viewed as a major conflict of interest. Only his populist appeal has thus far shielded him from MPRP action. ¶9. (SBU) Some say Minister of and Energy Erdenebat of the Motherland Party is also accused of conflict of interest because of his ownership of the Erel Mining Company. His manufactured political base consists mostly of his company's 3,000 or so employees. ¶10. (SBU) For its part, the DPR and other opposition parties are flummoxed that only non-MPRP members of the coalition are being targeted for house-cleaning in what the ruling party says is a campaign to force ministers to become more responsible in their positions. Calls for the resignation of Minister of Transport Ts. Tsengel last year after a rail accident killed three rail employees SIPDIS and more recently for the Minister of Social Welfare and Labor after he was accused of misappropriating close to US$4 million were apparently blocked when their MPRP comrades closed ranks around them. Minton