Parliament Fires Controversial Trade Minister

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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

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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