MONGOLIAN DEMOCRACY IN ACTION: PARTIES MULL JUNE 29

C O N F I D E N T I A L SECTION 01 OF 05 ULAANBAATAR 000320

SIPDIS

STATE FOR OPS CTR, EAP/CM, EAP/EX, DRL, INR/EAP
STATE PASS TO DEPT OF AGRICULTURE

E.O. 12958: DECL: 06/27/2018
TAGS: PREL ECON SOCI MARR PGOV MG
SUBJECT: MONGOLIAN DEMOCRACY IN ACTION: PARTIES MULL JUNE 29
PARLIAMENTARY ELECTIONS PROSPECTS

REF: A. ULAANBAATAR 0290

B. ULAANBAATAR 0305

Classified By: Classified by Ambassador Mark C. Minton.
Reasons 1.4 (A),(B),(D)


1. (C) SUMMARY: Mongolian voters head to the polls on Sunday,
June 29, to elect all 76 members of its parliament. This
will be the fifth election since Mongolia peacefully cast
aside its authoritarian, communist system in 1990/91,
beginning its democratic transformation. With public
frustration running high over unemployment, soaring prices
and corruption, ruling Mongolian People,s Revolutionary
Party (MPRP) senior officials were cautious about their
prospects ahead of June 29 parliamentary elections, while the
opposition Democratic Party (DP) was expecting (rightly or
wrongly) to make a strong showing. It was unclear whether
the MPRP, which holds 38 of parliament's 76 seats (compared
with 25 for the DP),would lose enough ground for there to be
a shift in the balance of power. It is also difficult to
predict the prospects of smaller parties, including Civil
Will, Motherland, New National and Republican (as well as
independents, who account for 45 of the 356 candidates).


2. (C) The ostensibly independent General Election
Commission (GEC),often criticized by opposition parties,
said the infrastructure was in place for free and fair
elections. In the last Parliamentary elections, in 2004,
voters in 76 districts cast ballots for a single candidate.
This time, each voter will pick two, three or four candidates
in one of 26 multi-member districts (six are in Ulaanbaatar,
20 in the provinces). The GEC said this change might confuse
voters, and many observers expected vote-counting to be
protracted (one polling station official predicted 20 to 30
hours). Some parties expressed concern over runoffs, which
they felt were likely; the Election Law was vague on how
runoffs should be carried out. Sixty-six women were seeking
office, the largest such field in Mongolian history. At least
120 foreign election observers, from at least 17 countries,
plan to observe the elections, including 16 delegates of the
Asia Pacific Democracy Partnership and 23 observers from
Embassy UB. END SUMMARY.

POLLING STATIONS PREPARE FOR SUNDAY ELECTIONS
--------------


3. (C) From 7 am to 10 pm on Election Day, July 29, voters
will visit the country,s 1,700 polling stations strewn
across three time zones and a space the size of Alaska to
select all 76 members of Parliament. Eleven parties and one
three-party coalition are contesting the elections. (Note:
Some observers put the party total at 15, but the People's
Party, which registered for the elections, has since been
"folded into" the DP, according to the GEC. End Note.)
The GEC anticipated heavy voter turnout. (In the previous
elections, in 2004, turnout was roughly 80%.) At polling
stations in Ulaanbaatar, home to nearly 39% of Mongolia's
1,561,248 registered voters, post's election observers
reported no major problems in early voting on June 26 or 27
(for those unable to vote on June 29 due to work or illness).


FINAL CAMPAIGN MOOD AND ATTITUDE: MORE MUD-SLINGING
-------------- --------------


4. (C) Reftels describe the first few weeks of Mongolia's
month-long campaign season. With just a few days before the
polls and the day before campaigning ceases (campaigning is

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not allowed by law on Saturday, the day before election, the
mud-slinging continued, as the country's two biggest parties
) the ruling MPRP and opposition DP ) each had taken to
promising citizens a share of the mining wealth in Mongolia,
which remained underdeveloped but rich in coal, gold and
copper.

MANY DISSATISFIED WITH PARLIAMENT, INFLATION
--------------


5. (C) Voters looking back after MPRP Chairman S. Bayar
became Prime Minister in November 2007 will recall his first
priority, after setting up a new Government, would be to
focus on rising consumer prices. Since then, however, food
and fuel prices have continued to increase (as in many other
countries and not as a result of Bayar's polices or
actions). The MPRP argued that Bayar's administration has
laid the foundation for long-term growth )- per-capita
income has more than doubled since 2004, and GDP growth has
averaged more than 9% annually -) but MPRP members privately
conceded that public frustration was running high.
Mongolians identified inflation as among their top concerns,
along with unemployment and corruption. A survey carried out
by the International Republican Institute (IRI) in May found
80% of surveyed voters dissatisfied with Parliament,s
performance (up from 68% two months earlier). It remains to
be seen to what extent this dissatisfaction will result in
anti-incumbent action at the ballot box, but the MPRP, with
38 seats in Parliament, has the most to lose.

MPRP LEADER'S CAUTIOUS ASSESSMENT...
--------------


6. (C) In a June 26 meeting with the Ambassador, PM Bayar
seemed to acknowledge the high level of public frustration,
by identifying "living conditions" as the most important
issue facing the Mongolian people and noting that citizens
are unhappy with the performance of civil servants. "People
also want to know why Parliament hasn't been able to pass
the mining legislation," he added. Bayar said it was
difficult to predict the outcome of the elections, but said
MPRP Secretary General Otgonbayar expected the MPRP to win
between 36 and 38 seats (30 of them in the provinces, where
the MPRP has traditionally derived much support). The PM
conceded that the MPRP was "not doing well in UB," adding
that he expected the DP to wrest two or three seats from the
MPRP in southwestern provinces. Bayar said he had heard the
DP,s Chairman (and former Prime Minister),Elbegdorj,
speculate that the DP would win 50 to 55 seats; the PM said a
reality check was in order. Bayar said that in some ways, he
would welcome a DP election victory because it would force
the DP to act responsibly, after consistently obstructing all
MPRP initiatives ) even mutually agreed upon and worthy
ones, particularly those related to mining. Bayar also said
he believed that among DP Members of Parliament, those most
likely to win re-election belonged to the DP,s "Polar
Star" faction, which has not always cooperated well with the
DP faction led by Elbegdorj (and is perhaps closest to the
MPRP politically). (COMMENT: Post believes Bayar is also
concerned that the absence of a clear majority for either
party will lead to an impasse and the parliament's continued
paralysis at a time when Mongolia must set clear goals and
enact important, future-shaping legislation on mining. END
COMMENT.)

... AND DEMOCRATS CAUTIOUSLY HOPEFUL
--------------


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7. (C) Although some DP officials privately expressed
optimism about their party's election prospects, Elbegdorj
has generally struck a more cautious tone. On June 19, he
told post,s E/P Chief and other USG officials that it was
difficult to compete against the MPRP, which he said
"controls most local governments." Elbegdorj said more
than 90% of all local-government officials and local-assembly
members in Mongolia are members of the MPRP, noting that
pensions and many other payments are disbursed through local
governments. Regarding election outcomes, Elbegdorj saw two
plausible scenarios. In one, either the DP or the MPRP would
"win big," capturing 60 or 70 of the 76 seats in
Parliament. In the other scenario, the DP would win roughly
36 seats, the MPRP 33 and smaller parties around seven seats.
(Note: To be able to form a Government without teaming up
with other parties, a single party would have to win at least
39 seats in Parliament. End Note.) The DP chief said one
encouraging sign for his party was that MPRP voters who
switched parties tended to join the DP, while DP voters who
switched parties tended to join smaller parties.

SMALLER PARTIES AND INDEPENDENTS
--------------


8. (C) Although the MPRP and DP dominated Parliamentary
proceedings and accounted for 63 of the 76 seats in
Parliament, five other parties held Parliamentary seats.
Civil Will and New National were junior partners in the
MPRP,s coalition Government. Joining the Democratic Party
in the Parliamentary opposition were the Motherland and
Republican parties. (The People,s Party, led by populist
Gundalai, held a single seat in Parliament, but effectively
ceased to exist following its absorption by the DP.) PM
Bayar of the MPRP told the Ambassador on July 26 that he
expected Civil Will ( MP and Foreign Minister Oyun,s party)
and other small parties to do poorly on Election Day, adding,
"This could push them into street protests." Also in
Parliament were three independent candidates, all affiliated
with the DP. Forty-five of the country,s 356 candidates are
independents; according to one long-time observer of
Mongolia's political scene, five of these 45 were likely to
win office (Sairaan, Jargal, Baasan, Altai and Tsogt). Many
of the smaller parties and independent candidates criticized
the move to a multi-member-district system, saying it
benefited only the two big parties. (Note: If, as post
suspects, neither the MPRP nor the DP wins 39 or more seats,
and if, as Elbegdorj has made clear to Post, the DP,s
leadership has repeatedly stressed it would not form a
coalition Government with the MPRP, the smaller parties and
independents elected to Parliament could play a
disproportionately large king-maker role in determining the
formation of the next governing coalition. End Note.)

ELECTION COMMISSION CITES CONCERNS
--------------


9. (C) The General Election Commission, accused of pro-MPRP
bias (seven of its nine members are or have been affiliated
with the MPRP),has generally met key legal deadlines in
preparing for these elections, and said the electoral
framework was in place for free and fair elections. On June
19, the GEC,s Chairman, Battulga, told us that he had three
areas of concern. The first was that voters, used to picking
a single candidate, would be confused by the new
multiple-selection ballots used for the multi-member
constituencies. The second was that fewer than 50% of voters
might cast ballots in a given district, thus invalidating the
vote under Mongolia's Election Law. The third, he said, was

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the Election Law requirement that to win election to
Parliament, a candidate had to win at least 25% of the votes
cast. While this would not present a challenge in a
single-seat district, Battulga said, it could easily cause
runoffs in the new multi-member districts. (Note: The
Election Law is inconclusive on how runoffs should be
handled. The GEC has requested that the Supreme Court
interpret this statute, but as of June 27, no such opinion
had been made public. Some election observers worried that
due to uncertainties regarding the timing and implementation
of runoffs, the final election results could be delayed,
perhaps for an extended period. Other observers expressed
concern that vote-counting could be prolonged at many polling
stations. Indeed, one poll worker predicted his district,
with 19 candidates, would require 20 to 30 hours to complete
its tabulations. End Note.)

MPRP, DP TRADE ACCUSATIONS OF ELECTION FRAUD
--------------


10. (C) The MPRP and DP were less restrained in articulating
their election-related concerns. "The MPRP has rigged
elections in the past, at the local level," Elbegdorj told
us, wondering aloud what would stop the MPRP from doing the
same this time. The DP Chairman also accused the MPRP of
receiving "cheating advice" from Kremlin officials, a move
that he said "shows Mongolia's importance to Russia."
MPRP Sec Gen Otgonbayar, for his part, told us that
Democratic operators were systematically and illegally
transferring UB-based workers to two hotly contested election
districts in the provinces. Otgonbayar also said the MPRP
was very concerned that parties other than the MPRP would
resort to multiple voting, and using voter IDs of the
deceased. He called it incomprehensible that the GEC decided
not to take off the voter lists the names of Mongolians
residing overseas. He said UB alone is home to 30,000 such
people, and that the GEC,s decision opens the door to fraud.

IT,S DEBATABLE ) GEC SAYS NO IT,S NOT
--------------


11. (C) Late on June 26, the MPRP and DP Chiefs, PM Bayar and
former PM Elbegdorj, held their first and only debate,
televised live on commercial TV. The debate was intended to
be broadcast by Mongolian National Television (with
nation-wide coverage),but the latter balked after the GEC
informed it that if MNTV were to broadcast the event, the
network would be violating Election Law requirements that all
parties and candidates receive equal airtime on public
broadcasters. In the debate, Elbegdorj criticized the Bayar
administration for failing to hold the line on prices; Bayar
shot back that Elbegdorj,s DP deserved responsibility for
blocking MPRP efforts on this front.

SURVEY RESULTS
--------------


12. (C) The last IRI election survey, in May, found support
for the DP running at 32%; the MPRP, 28%; Civil Will, 3%;
other parties, 4%; and undecided, 26%. A slightly more
recent Sant Maral survey saw the DP's modest lead declining
and a slight improvement in the MPRP's standing.
Regionally, the survey found the DP stronger than the MPRP in
UB and the east, and the MPRP much stronger than the DP in
the west. The MPRP held a slight advantage in the northwest,
while in north-central Mongolia, the DP held a slight edge.
The survey also found that although support for the DP and
MPRP is evenly mixed among the lower and working classes,

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middle-class Mongolians are more likely to support the DP,
and more upper-class Mongolians are more likely to support
the MPRP. On the question of whether the country is headed
in the right direction, those who responded in the
affirmative were most likely to cite the existence of press
freedom, construction and infrastructure improvement,
increased quality of life, freedom of travel and increased
wages/growth. Those who responded negatively were most
likely to cite improper work by government officials,
poverty, inflation, corruption/bureaucracy and unemployment.

INTERNATIONAL OBSERVERS
--------------


13. (C) At least 120 foreign election observers, from no less
than 17 countries, were deployed to observe the Mongolian
elections, including 16 delegates of the Asia Pacific
Democracy Partnership and 23 observers from Embassy
Ulaanbaatar. The APDP's Election Observation Mission,
organized by IRI, has dispatched observers to the cities of
Darkhan, Sukbaatar (Selenge Province),Erdenet and Ondorkhan
(Khentii Province),as well as UB. Post's election
observers have been dispatched to the cities of Khovd,
Bulgan, Tsetserleg (Arkhangai Province) and Baganuur (Tov
Province),as well as the capital. According to the GEC, the
Chinese, Estonians, French and Russians also deployed
observers, as did Germany.

EMBASSY'S ELECTION OPERATIONS
--------------


14. (U) Embassy Ulaanbaatar,s Election Monitoring Team
consists of four mobile units in the provinces, two mobile
units in the capital, and a Command Center at the Embassy.
Post will contact the Ops Center with periodic updates on and
immediately after June 29. The Command Center's telephone
number is 9756-11-329-095, ext. 4747.
MINTON