SELECTION OF NEW MONGOLIAN FOREIGN MINISTER

C O N F I D E N T I A L ULAANBAATAR 000329 STATE FOR EAP/CM E.O. 12958: DECL: 11/13/2034 TAGS: PGOV PREL MG SUBJECT: SELECTION OF NEW MONGOLIAN FOREIGN MINISTER HIGHLIGHTS ASSERTIVE YOUNG RULING PARTY WING REF: A. ULAANBAATAR 308 ¶B. ULAANBAATAR 293 Classified By: Political Section Chief Andrew Covington, Reasons 1.4 (b) and (d) ¶1. (C) Summary: On November 12, Parliament approved the nomination of G. Zandanshatar as foreign minister. The new foreign minister represents an assertive young wing of the Mongolian People's Revolutionary Party (MPRP) intent on having its turn at the helm. The leading candidates over which Zandanshatar triumphed were established members of the MPRP already in significant positions of power, whereas Zandanshatar was merely an MP with a minor committee chairmanship. His selection reflects the waning power of former Prime Minister Bayar, who is back is Seoul for medical treatment. End Summary. ¶2. (C) On November 12, Parliament easily approved the nomination of G. Zandanshatar as the new foreign minister of Mongolia. Zandanshatar's selection comes more than two weeks after the resignation of former Prime Minister Bayar for health reasons resulted in the elevation of then-Foreign Minister Batbold to the PM position (reftel A). This relatively long period indicates Batbold has had more difficulty determining the composition of his cabinet than had been the case for his predecessor. Bayar's strength stemmed not from loyal blocks within his party, but rather from his forceful character, which was largely responsible for establishing a coalition with the Democratic Party in fall 2008 and for the passing of the Oyu Tolgoi Investment Agreement (reftel B) in October this year. Batbold, who is seen as a good compromise candidate as PM, has not shown the same forcefulness but may yet rise to the occasion. -------------- THE FIELD -------------- ¶3. (C) During these two weeks, several candidates from Bayar and Batbold's party, the MPRP, emerged to seek the FM slot. At the same time, the MPRP entreated the Democratic Party (DP) to obtain the DP's coveted Finance Ministry seat. Despite an internal MPRP vote in favor of seeking the Finance slot, the DP refused to surrender such a plum position. ¶4. (C) Batbold emerged as the incoming PM in the last week of October, immediately after Bayar announced that he was stepping down. Bayar had the advantage of knowing his own plans, and as such began to position Batbold as his heir weeks in advance. On November 2, Batbold began to push for a new FM in earnest. Even at this early stage, it was clear that that two parties sought to maintain the coalition in its present form. On the same day, Batbold requested that Parliament retain the same ministries and cabinet positions as Bayar's government, with no shifting of titles or responsibilities among ministries. This request did not detail if the 9-to-6 MPRP-to-DP distribution of cabinet seats would remain or even who might occupy those seats, but the lack of shifting indicated little change would occur. ¶5. (C) On November 2, two names topped the FM candidacy list: Deputy Speaker N. Enkhbold and MP G. Zandanshatar. Long-serving MP N. Enkhbold represents an established and experienced wing of the party, while Zandanshatar, at age 39 and with the DPRK parliamentary group chairmanship his most senior responsibility, stands for a young, highly ambitious wing of the MPRP seeking its turn at the helm. Observers and even contacts within the MPRP at that point considered N. Enkhbold to have the edge due to his experience and reputation, which is why Enkhbold's name came up as part of an MPRP offer to the DP to have Finance Minister Bayartsogt (DP) move to the Foreign Ministry and allow N. Enkhbold to take over Finance. As noted, the DP did not bite, instead telling the MPRP to fill the FM slot with an MPRP candidate, full stop. ¶6. (C) Once the DP's position on the Finance Ministry became clear (despite a few half-hearted MPRP approaches in the days that followed),the FM debate shifted back to N. Enkhbold and ¶G. Zandanshatar. The fact that Enkhbold was not elevated quickly into the FM position meant that Bayar's persuasive power was much reduced (he is now in Seoul again for medical treatment) despite his continued role as an MP and as Chairman of the MPRP, and that Zandanshatar's faction within the MPRP was stronger than his internal party opposition had reckoned. Zandanshatar is closely aligned with a group of similarly young, ambitious, and aggressive politicians centered around Khurelsukh, Secretary General of the MPRP. -------------- A COMPROMISE CANDIDATE EMERGES... -------------- ¶7. (C) As of November 4, neither candidate had emerged victorious from the internal party wrangling, which became increasingly heated. That day, a compromise candidate emerged: R. Bold, head of the General Intelligence Agency (GIA) and former Ambassador to the United States (not to be confused with Defense Minister Lu. Bold). For some 24 hours, Bold appeared to be the frontrunner, likely because MPRP moderates wanted the dispute to end quickly. Although N. Enkhbold may have been satisfied with this option given his already powerful position as Deputy Speaker, Zandanshatar's faction reasserted itself, which kept N. Enkhbold in the fight. -------------- ...AND DISAPPEARS -------------- ¶8. (C) R. Bold, sensing the morass the party would be in by expanding this to a three-way fight, pulled his name from consideration on November 5. Bold's reasons for pulling out also include his concern that the DP will soon succeed in inserting one of their own as deputy at the GIA, now that Elbegdorj is president and head of the National Security Council. Furthermore, as GIA Director, R. Bold already has ministerial rank. ¶9. (C) After Bold's retreat, the Enkhbold-Zandanshatar dispute reignited and continued over the weekend of November 7 and 8. On Tuesday, November 10, with speculation growing as to why Batbold had not yet put an FM in place, Zandanshatar's name was suddenly on everyone's lips. At an NDI event on November 10, former FM Erdenechuluun (MPRP) asked MFAT Americas Department Director Odonjil who the FM would be, to which Odonjil replied it would be Zandanshatar. Erdenechuluun was surprised. On the same day, Presidential Foreign Policy Advisor Purevsuren called the Charge's office and poloff's cell to indicate Zandanshatar was the one. ¶10. (C) Zandanshatar's sudden victory was the result of another MPRP caucus meeting that selected Zandanshatar for the FM slot. With the MPRP in control of Parliament and the DP uninterested in interfering in the FM decision at the risk of its Finance slot, the MPRP's decision guaranteed the FM job to Zandanshatar. How the tie was broken is not yet clear, but N. Enkhbold, with his Deputy Speaker title, had less to lose, and PM Batbold had everything to gain by ending an intra-party conflict that threatened to portray him as ineffectual and which would expose MPRP internecine strife to wide-scale public scrutiny. (Note: During the November 10 conversation between Odonjil and Erdenechuluun, both agreed that N. Enkhbold had little to be upset about because the Deputy Speaker position was far more desirable, given Parliament's status as the most powerful branch of government. End Note.) -------------- ONE MINOR PORTFOLIO CHANGE -------------- ¶11. (SBU) One other ministerial position also changed: The Chair of the Cabinet Secretariat (similar to a Chief of Staff position) has shifted from Ms. Dolgor, whose popularity had been waning in recent months, to MP Ch. Khurelbaatar, Chair of the Parliamentary Standing Committee on Budget. Both are MPRP, keeping the MPRP-to-DP ratio intact. Khurelbaatar recently returned from a weeklong parliamentary exchange in Washington through the House Democracy Partnership. He has since told poloffs he is looking forward to implementing budget and legislative reform ideas stemming from his visit to Washington -------------- COALITION STABLE -------------- ¶12. (SBU) What was clear throughout this period is that the MPRP and the DP were both determined to maintain the coalition government more or less in the format Bayar had established. Despite discussions on trading the Finance seat for the Foreign Ministry and perhaps also the Chief of Staff positions, neither party was willing to let the coalition collapse. ¶13. (SBU) In the MPRP's case, with the election of Elbegdorj as president in May 2009, the DP now has veto power over the MPRP, which, does not have sufficient MPs to override a presidential veto, despite its comfortable majority. (Of 76 seats, the MPRP has 46, with 39 being the absolute majority threshold and 51 being the two-thirds required to override.) ¶14. (SBU) As for the DP, the majority of the party supports staying in the coalition over retreating to the role of opposition party in Parliament, despite the weight of Elbegdorj's veto. Elbegdorj, who initially resisted a coalition with the MPRP last fall when he was an MP and the DP chairman, has also voiced support in recent weeks for maintaining the coalition. -------------- COMMENT -------------- ¶15. (C) The MPRP is far from monolithic, as the past two weeks of wrangling illustrate. Bayar, despite his continued leadership of the party, had the inertia to install only Batbold. This inertia was insufficient to get his childhood friend, R. Bold, installed as foreign minister. The selection of Zandanshatar, who has little in common with Bayar, is an indicator that the MPRP is beginning the process of yielding power to the younger generation. This younger generation is split between a brash and aggressive wing represented by Zandanshatar and Khurelsukh, and an apparently smoother but no less ambitious wing represented by Minerals and Energy Minister and recently elected MP Zorigt. ¶16. (C) Zandanshatar carries baggage that may allow enemies within his party to replace him relatively easily in the future. He, Khurelsukh, and another MPRP member were implicated in a gambling scandal involving embezzlement of USD 11 million from a formally state-owned bank and other misuses of state property from 2005 to 2007. Consequently, few in the public believe him to have clean hands. Others who have worked with Zandanshatar report him to be malleable and having the tendency not to follow through on projects and commitments. Moreover, many Mongolians were surprised to hear Zandanshatar will be the new FM, since he has a reputation as a poor manager and does not have extensive foreign policy credentials. In conversations in 2007 with a previous poloff, Zandanshatar noted his interest in changing the MPRP's name, ideology and party program. More than two years on, little of this ambitious program has entered the MPRP's discussions or Zandanshatar's public statements and legislative record. END COMMENT HILL