AS MONGOLIAN PRESIDENT HEADS TO WASHINGTON,

C O N F I D E N T I A L SECTION 01 OF 03 ULAANBAATAR 000598

SIPDIS

SIPDIS

STATE DEPT FOR EAP/CM
STATE PASS DEPARTMENT OF AGRICULTURE

E.O. 12958: DECL: 10/18/2017
TAGS: PREL PGOV ECON SOCI MG
SUBJECT: AS MONGOLIAN PRESIDENT HEADS TO WASHINGTON,
POLITICAL TURMOIL AT HOME

REF: ULAANBAATAR 585

Classified By: Charge d'Affaires Brian L. Goldbeck for Reason 1.4 (d).


1. (C) SUMMARY: As Mongolian President Enkhbayar prepares to
depart for an October 22 summit with President Bush, a fierce
power struggle continues to rage within his ruling Mongolian
People's Revolutionary Party (MPRP),the former communist
party. With the party's approval rating at less than 30%,
the MPRP parliamentary faction that supports the President is
in confrontation with that of Prime Minister Enkhbold, on
issues that have much to do with the domestic balance of
power. While President Enkhbayar is away, the MPRP will
convene, as scheduled, an extraordinary party Congress that
will determine, among other things, whether Prime Minister
Enkhbold can continue to serve concurrently as MPRP Chairman.
If Enkhbold prevails, 13 members of the pro-Enkhbayar
faction may decide to break away from the MPRP and, with the
President, form their own party. Meanwhile, the leader of
the key opposition Democratic Party, former Prime Minister
Elbegdorj, has reappeared in public following an automobile
accident that required his medical treatment abroad. A
number of new political groups have emerged and are trying to
register as political parties. Some, along with the
established smaller parties, fear that the MPRP and the DP,
which together account for 64 of the 76 seats in Parliament,
are conspiring to revise the Election Law in a way that
marginalizes small parties. Women's rights groups worry that
the MPRP and DP will overhaul a quota that currently requires
political parties to ensure that at least 30% of the
candidates are women. END SUMMARY.


2. (SBU) Mongolian President Enkhbayar is preparing to head
to Washington for meetings with the President, Vice
President, Secretary of State and others, and to sign the
long-awaited Millennium Challenge Compact worth $285 million.
He leaves behind an intense power struggle within his ruling
Mongolian People's Revolutionary Party (MPRP),as well as an
ongoing brawl between the MPRP and the opposition Democratic
Party (DP). With Parliamentary elections expected in June
2008 (and a Presidential election, in which Enkhbayar
apparently hopes to participate, in May or June 2009),
Enkhbayar will be hoping his White House visit - covered
heavily by Mongolian media, with GOM encouragement -
translates into greater popularity for himself, his faction
and the MPRP. A boost couldn't come a moment too soon for
the party; results of a recent survey by an independent
research center, Scale, put the MPRP's approval rating at
29.9%.


3. (SBU) In the Great Hural (parliament),where lawmakers are
discussing economic growth and tax revenues, the real
intrigue is playing out behind the scenes, with members of
the pro-Enkhbayar faction in an intense battle with the
faction led by Enkhbold, the Prime Minister and MPRP
Chairman. (A third faction consists of reformists led by the
Education Minister, Enkhtuvshin.) Three key issues lie at
the heart of the struggle between factions loyal to the
President and Prime Minister. One is whether parliamentary
immunity of three MPRP Parliamentarians (all from the Prime
Minister's faction) should be stripped, in connection with an
investigation into the disappearance of millions of dollars
from the State Savings Bank. (The effort was initiated by
the State Prosecutor General, a presidential appointee.) The
second issue is the conviction of a former Government
spokesman named Demberel, who is affiliated with the Prime
Minister and was convicted on August 31 of defaming and
slandering the President and an influential MP from the

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pro-President faction. Human rights activists rallied around
Demberel and said his four-month sentence marked the end of
freedom of speech and expression in Mongolia. Demberel's
sudden and unexpected release from jail on October 11, with a
heavy fine, sparked speculation that the President had
engineered the release, to avoid potentially embarrassing
questions on his U.S. visit (which will take him to
Washington D.C., New York City, Chicago, Anchorage and Los
Angeles.)

MPRP PARTY CONGRESS DRAWS NEAR
--------------


4. (SBU) The third and arguably most important front in the
battle between the President and Prime Minister is an
initiative to have the entire MPRP decide on whether the
party's top position, the chairmanship, may be held
concurrently by the Prime Minister. The initiative was
supported not only by the President's faction but by the
reformists. A decision on whether Enkhbold can continue to
wear both hats will be made at an extraordinary MPRP
Congress, the party's 25th, opening on October 22. Some 678
delegates representing the party's 130,000 members will take
part in the four-day event, where the MPRP is also expected
to decide on whether to change its name, ideology, structure
and bylaws. (Note: Some MPRP members feel that the
"Revolutionary" in MPRP misrepresents the party's current
nature, and favor a different moniker; the "Labor Party," is
one alternative, among others. End Note.)

ELBEGDORJ RETURNS
--------------


5. (U) The undisputed leader of the Democratic Party,
Elbegdorj, has reappeared in public following an automobile
accident that killed his driver and resulted in Elbegdorj's
medical treatment overseas. Buoyant over the rise in the
DP's approval rating to 31.5%, Elbegdorj was back in de-facto
campaign mode, touring a market, chatting with passengers on
a bus ride, and appearing at a popular rock concert.

NEW PARTIES EMERGING
--------------


6. (C) At least three new political groups have applied to
register with the Supreme Court as parties, including the
Mongolian Democratic Union Development Party, the Development
Program Party, and the Civil Movement Party. (Comment: Some
such groups wildly overestimate revenue-sharing from the
future development of mineral deposits. The No. 2 official
of the Civil Movement Party told us on October 17 that if
Mongolia's mineral wealth were fairly distributed, the
average family would receive an annual payment of at least
$10,000. By comparison, one year of salary at the current
minimum wage yields $912. End Comment.)

SMALLER PARTIES FEAR ELECTION LAW REVISION
--------------


7. (SBU) Members of smaller parties, both established and
aspiring, are accusing the MPRP and DP of plotting to ram
through revisions of the Election Law in ways that
marginalize small parties. Neither the MPRP nor the DP has
announced that it would seek such changes, but there has been
heavy media speculation to that effect. Such suspicions were
fueled by recent statements (reftel) by officials of the
General Election Commission (GEC),who said they would invite
Parliament to review the Election Law, as it contains a

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number of inconsistencies and contradictions. (Note: Small
parties say they fear that the MPRP, with 38 of Parliament's
76 seats, and the DP, with 26 seats, will try to change the
electoral system in a way that obliges voters to select
political parties, rather than individual candidates. End
Note.)

QUOTA FOR WOMEN CANDIDATES SEEN AS ENDANGERED
--------------


8. (SBU) Women's rights groups are concerned that the MPRP
and DP might try to revise an Election Law provision that
requires political parties to ensure that at least 30% of
their candidates are women. (Specifically, the law states
that the GEC will not authorize a political party to take
part in an election unless at least 30% of those on the
party's candidate list are women.) Neither the MPRP nor the
DP has publicly indicated any such move, but there is
widespread speculation that they will try to reduce the quota
to 15 or 20%.

COMMENT
--------------


9. (C) Although Mongolians will closely watch President
Enkhbayar as he meets with POTUS ("at the invitation of
President Bush," as local media hasten to add),much
attention will also be focused on the MPRP Congress, where
the stakes are high for the President, the Prime Minister and
the MPRP. Although it is possible that the MPRP will decide
that the Prime Minister will no longer be able to serve as
party Chairman, our sense is that Enkhbold will, in the end,
muster enough support to hang on to both positions. If so,
the 13 members of the pro-Enkhbayar faction may decide to
leave the MPRP and, with the President, form their own party.
This is because under the Mongolian system, a presidential
candidate has to belong to a party that is represented in
Parliament. If Enkhbold wins the crucial vote at the MPRP
Congress, he will almost certainly stay on as party chief for
another two years -- long enough to block, or at least
challenge, Enkhbayar's anticipated bid to stand for
re-election on an MPRP ticket. The Mongolian President, like
his American counterpart, is limited to two terms, and all
indications are that Enkhbayar will be seeking to extend his
time in office. End Comment.
Goldbeck