Parliament Fires Controversial Trade Minister

UNCLAS SECTION 01 OF 02 ULAANBAATAR 000085 SIPDIS SENSITIVE SIPDIS STATE PASS USTR, USTDA, OPIC, AND EXIMBANK STATE FOR EAP/CM AND EB/IFD/OIA USAID FOR ANE FOR D. WINSTON MANILA AND LONDON FOR ADB, EBRD USEDS TREASURY FOR USEDS TO IMF, WORLD BANK E.O. 12958: N/A TAGS: EINV PREL ETRD EMIN ENRG MG SUBJECT: Parliament Fires Controversial Trade Minister Ref: (a) Ulaanvaatar 080, (b) 06 Ulaanbaatar 0870, (c) 06 Ulaanbaatar 0875, (d) Ulaanbaatar 0080 Sensitive But Unclassified - Not for Internet Distribution. Contains proprietary and confidential business information ¶1. (SBU) SUMMARY: On February 6, the State Great Hural (SGH, Mongolia's parliament) voted to sack controversial Minister of Industry and Trade B. Jargalsaikhan. Although many in and out of government -- particularly in the mining community -- greeted the ex-minister's dismissal with unconcealed glee, some Mongolians see Jargalsaikhan as a compelling speaker and populist who rails against "evil foreigners" who steal from Mongolia. Jargalsaikan's party is also likely to be removed from the ruling coalition, and his former ministry is at risk to consolidation in an upcoming government reorganization. END SUMMARY. Voted Out -------------- ¶2. (SBU) After a televised debate, the SGH voted by a 34-15 margin on February 6 to dismiss controversial Minister of Industry and Trade B. Jargalsaikhan. The motion to sack Jargalsaikhan was submitted by recently dismissed Minister of Health Gundalai, who charged that Jargalsaikhan was involved in corruption. Adding to the spectacle of the parliamentary debate, Gundalai unsuccessfully sought to withdraw his motion, which the Speaker declined to agree to, noting that the motion had already been approved by the Economic Standing Committee and submitted for plenary discussion. With considerable support from MPs from the MPRP, the majority and dominant party in the ruling coalition, the SGH then voted to oust Jargalsaikhan. Jargalsaikhan immediately convened a press conference where he termed his sacking illegal and swore to challenge the SGH's action before the Constitutional Court, lamented the absence of Prime Minister Enkhbold from Parliament during the vote ("I felt like a fatherless child," Jargalsaikhan said),and said he meant to hold the PM to the coalition government agreement that the ministry should be filled by someone from his Republican Party. Since Jargalsaikhan is the only MP from the party, however, most observers believe that the Republican Party soon will be removed from the coalition. The Ding Dong the Witch is Dead -------------- ¶3. (SBU) Mining companies have recently gone public (ref D) with their view that Jargalsaikhan's ministry, by embargoing transfers of mining licenses, had engaged in conduct effectively amounting to expropriation. Consequently both foreign and domestic firms were singing hosannas when the news broke yesterday. One long-time mining consultant greeted CommOff's call with a hearty rendition of "Ding Dong the Witch is Dead." More seriously, an American lawyer expressed hope that expulsion would allow the administrative apparatus to restart immediately, as she had several multi-million dollar deals that could only be signed if licenses could be transferred and reformatted. A more cynical miner worried about Jargalsaikhan's replacement, although he felt that the GOM would be hard put to find someone as wretched as the ex-minister. However, overall he called the dismissal, "the single most business friendly gesture" the GOM had executed in over a year. ¶4. (SBU) More restrained in their comments, GOM contacts at the Ministry of Industry and Trade were no less pleased at the outcome. MIT official D. Zorigt (protect),an up and coming member of the Mongolian People's Revolutionary Party, offered a nuanced view of the dismissal. (Note: Jargalsaikhan unsuccessfully attempted to sack Zorigt last spring -- undoubtedly to put Jargalsaikhan's own crony into the job.) Zorigt recalled that Jargalsaikhan, never an early riser, would routinely start work at 3:00 PM and often called meetings with staff and businesses anytime between 6:00 PM to midnight. Zorigt expressed pleasure that he would no longer have to ULAANBAATA 00000085 002 OF 002 attend late night meetings where the minister would accuse him and others of being foreign pawns and order them to undertake acts without any commercial basis or value to the people of Mongolia. Professionally, Zorigt explained that the passing of Jargalsaikhan would not affect US-Mongolia trade relations and policies. Deputy Minister Sodbaatar would continue to supervise these efforts. However, Zorigt noted that MIT's future as ministry is in doubt as government restructuring and a reduction in ministries is considered in coming weeks. During its year-long tenure, Zorigt noted, the Enkhbold government had eroded and redistributed the MIT portfolio in an effort to neuter the troublesome Jargalsaikhan. A Popular Populist -------------- ¶5. (SBU) Reviled though he was by those who had to deal with his ministry, Jargalsaikhan is popular with a slice of Mongolians. One middle-class Mongolian professional told CommOff that she thought the ex-minister is a thorough rogue, as corrupt and thieving as any Mongolian politician. Nevertheless, she admired his flair with words and agreed with their content. She found merit in his attacks against Chinese and Russian interests bent on robbing Mongolia of its treasures. Did she realize that Jargalsaikhan was perhaps guilty of attempting to peddle mineral rights and other goodies to the same Russian and Chinese malefactors that he so virulently criticized? Yes, she did know and believe these charges against the man; but, even so, that did not make his attacks less right or less entertaining to hear. As with fellow populist Gundalai, however, Jargalsaikhan's exit from the Cabinet does not mean they have left the Mongolian political scene -- just that they have been freed from whatever minimal discipline either adhered to as members of the government. Minton