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An Interview with Bill Bikales

By ucsaar0, on 31 October 2016

In September this year the Emerging Subjects group was lucky to host Bill Bikales as he stopped off in London from Mongolia and China en route to America.  We had a fascinating meeting with Bill and all felt that his unique long-term experience of Mongolia, as well as his reflections on the current economic situation, would be valuable to share on our blog.  In what follows, Bill kindly agreed to respond to a few questions our group posed over email.

 

Bill Bikales

Photo courtesy of Bill Bikales (2016).

 

Bill, thank you for agreeing to share your reflections here. You first came to Mongolia in 1991. Can you describe for us what you had been doing before, what drew you to Mongolia, and what you found distinctive about the country in the 1990s?

I was a grad student in Economics at Harvard, focused in my studies on the Chinese economy.  My undergraduate major in College had been Chinese studies and I had lived and worked in Hong Kong and China before returning to grad school. In 1991, Jeffrey Sachs was asked by the new Mongolian government to give them some advice on their transition, and after his first visit there Jeff arranged for a small group of his grad students to spend a few months in Ulaanbaatar.  My China background seemed relevant, which is amusing in hindsight.  I arrived in early July and stayed until just before Christmas.  1991 was a dramatic year.  I mostly worked with an organization called the Market Research Institute, under the Ministry of Trade.  They were a remarkable group of people.  It was created by future Prime Minister M. Enkhsaikhan, and was headed by future head of the Chamber of Commerce and MP S. Demberel, whose deputy was M. Bold, the CEO of XAC Bank. Staff included many others who later had very important careers.  I taught introductory economics and worked with them on other issues.  I also helped the Statistical Office do their first consumer price index, and worked with other economists in the Finance Ministry and Central Bank and elsewhere.  I fell in love with Mongolia from the start for the reasons many people do: wonderful, warm and open people, beautiful nature, extraordinary history and culture.

 

What a fascinating time to be in Mongolia. Can you describe what the ‘economic atmosphere’ was like then?

The economy was in a tailspin after the sudden end of Soviet assistance and collapse of the old system.  Most key foods, including bread, meat and vodka, were rationed, and there were long lines to get them.  Inflation was taking off.  The government had repeatedly devalued the Tugrik, and the US$ exchange rate was 40:1, but there was a very active black market with rates of 150:1, as I recall.   D. Byambasuren was Prime Minister, from the then MPRP, and a group of economic reformers from the National Progress Party (as they were then known) under Deputy Prime Minister Da. Ganbold were leading economic policy-making. There was still a great deal of uncertainty about policy, and the uncertainty was magnified when the Russian coup was attempted that summer.  Reformers were starting to implement the voucher privatization, run through the newly created Mongolian Stock Exchange.  IFIs were sending their delegations.  That was also the time of the first big economic scandal of the market economy era, when the currency traders at the State Bank International, which had just been hived off from the Central Bank, lost all the country’s foreign reserves, around US$90 million.  That took quite a bit of wind out of the sails of the strong reform faction; the Governor of Mongolbank and the head of State Bank International were both members of that group.

 

That sounds like a very dramatic and uncertain time. The dominant narrative of the 1990s is that Mongolia went through a series of externally-imposed structural adjustments and experienced ‘shock therapy’.  How would you describe them and their implementation in Mongolia at that time? What was your role in this implementation?

That narrative is internally incoherent and, simply, false.

Most importantly, it conflates the very real shock from the collapse of the old system with the impact of the policies that were implemented after it collapsed.   The Mongolian economy — and its government structures – that existed in 1989 had all been built and sustained with massive Soviet financial support.  You may recall that for the first 13 years after democracy, Mongolia had a large Soviet era debt hanging over it, which totalled roughly 10 times Mongolia’s 1990 GDP.  What was that debt?  It was the accumulated massive credits that the Soviets provided for the preceding decades – in increasing amounts through the 1980s – that financed nearly everything in Mongolia.  Budget deficits, trade deficits, infrastructure, construction, rural government offices, etc.  These credits equalled more than 30% of GDP in the years before the whole system collapsed.  30% of GDP per year!   Industry worked under the Council for Mutual Economic Assistance – better known as Comecon – trading bloc network and rules; factories got imported inputs at below world market prices and had guaranteed markets for their goods in Comecon partners like Poland, East Germany and the USSR itself.  Those credits and those markets all collapsed at once in 1990.

This shock was further exacerbated by Mongolia’s geographic and economic isolation.

When you look at the criticisms of ‘shock therapy’ in Mongolia you’ll find that none of them acknowledge this simple reality.  Comparisons with Poland or even Russia, countries that did try ‘shock therapy’, are entirely beside the point.  Mongolia was a poor, landlocked developing country whose massive aid from abroad was cut off overnight and which had no trade links with the markets that it suddenly had to sell to.   There was no way to avoid a very painful shock.  And maintaining the old system was never an option, not because the IFIs forced Mongolia to abandon it, but because it was unviable without the Soviet money.

Even the inflation that was so devastating was much more the result of shortages due to economic collapse and the bad monetary policy and artificial exchange rates of the late planned economy years than of the liberalization program.   If the government had tried to avoid inflation and depreciation by maintaining the planned era prices and rates they would have collapsed before too long anyway, and with even greater trauma.

The narrative also seriously misrepresents the role of the IFIs.  The IFIs did not support ‘shock therapy’ anywhere.  They are in general quite cautious.  To the extent that there was interest in a rapid and across-the-board liberalization and privatization, i.e. ‘shock therapy’, it was on the part of some of the more passionate economic reformers among the Democrats.  It was a Mongolian program, not an externally imposed one.  But there was no strong political support for such an approach.  Price and exchange rate liberalization started off more rapidly, with Resolution 20 at the beginning of 1991, but they were not sustained.  Many price controls on key goods, and a dual foreign exchange market, both classic planned economy policies, were continued for several years.  Privatization, similarly, the other key feature of ‘shock therapy’, also started off rapidly but quickly slowed down and afterwards took place quite slowly and gradually, with lots of stops and starts.  Very few of the large state-owned firms were privatized until several years later.  The largest by far, Erdenet, was kept under state ownership to this day.

‘Shock therapy’ is not the same as ‘transition to market economy’. The IFIs supported the latter, but not the former.  The IFIs are not perfect, of course.  When they make mistakes it is important to speak up.  But their main role in the 1990s was not only positive, they were downright indispensable.  They helped teach Mongolian policy-makers how market economy governments manage monetary policy and fiscal policy and deal with economic relations with the external world.  These were things Mongolian leaders had to learn very quickly.

You ask about my role in implementing IFI programs.  My work in Mongolia was not funded or overseen by any IFI.  Later I worked for the Asian Development Bank for three years, but in their Southeast Asia Department.  At times in Mongolia I sat on the Mongolian side in discussions with the IFIs, as an observer, so that I could share my thoughts later with my government counterparts.  In my work I always viewed myself as accountable first and foremost to my counterparts, not to any outside organization or government.

 

What were some of the main competing economic ideas in the 1990s? Were there, for instance, clear economic policy differences between the two main political parties?

Which two main political parties (he writes with a smile)?  What we now know as the Democratic Party was only formed for the 1996 election, when the Social Democrats and National Democrats merged. The National Democrats were themselves a coalition of various smaller parties. All of them had different ideas.  Under Byambasuren there were clear differences over privatization between Ganbold’s National Progress Party and the MPRP.  There was the famous moment when Byambasuren asked each of those groups to develop privatization proposals so the government could choose between them.  The MPRP never came up with one, while the ‘Democrats’ did.  The rest is history!  Ganbold’s group had a number of quite good economists, which gave them an advantage over the others in coming up with clear proposals quickly. Still, this was a coalition government with the MPRP the dominant partner, and there were also different ideas within the various Democratic parties.

It was only gradually over the course of the 90s that clearer differences between MPRP and Democrats emerged.

During the P. Jasrai government, from 1992-6, the MPRP had a huge majority in the Ikh Khural.  70 seats out of 76, I think?  The various Democratic groups had no influence on policy, and no coherent platform.  The Jasrai regime stabilized the economy gradually and took many steps to create the government structures of democracy and markets, but in terms of overall outlook was quite conservative.  They unified the exchange rate in 1993 – an important step.  But as of June 1996 there were still Price Commissions setting prices for bread, flour, meat, gasoline and quite a few other goods. Privatization had pretty much ground to a halt, housing was still state-owned, there were still a lot of small state-owned shops all over Ulaanbaatar, etc.  I saw the IMF programs in 1993-6 and they were heavily focused on basic macro targets – budget deficit and monetary growth, not on structural reforms such as privatization, which were included but not as core targets.  In 1994 I went with a government official to a meeting with commercial banks at which the government gave the banks a list of loans to various projects and factories and told them that they had to issue those loans.  This was not an economy that had undergone shock therapy.

After M. Enkhsaikhan became Prime Minister in 1996, following the unification of the National and Social Democrats in one party, he took a stronger economic reform approach and the policy differences between Democrats and MPRP became clearer.  He abolished the Price Commissions, quickly privatized urban housing by giving it to its residents, started to develop a new privatization program for large enterprises.  He moved strongly to deal with very serious problems with the commercial banks that had arisen due to the sort of directed lending to unprofitable enterprises that I described above.  He raised electricity prices sharply, trying to address the debilitating debt and inefficiency problems in that sector.  There were many other issues, too many to list here, that he dealt with quite rapidly.  He also oversaw the preparation of Mongolia’s new mining and foreign investment legislation.  During those four years the differences between the two parties were quite stark; more than ever before or since, I would say.

 

What myths about the 1990s do you think are important to dispel?

As already mentioned, the notion that Mongolia experienced so much hardship because of donor-imposed shock therapy is completely wrong.

This is not only a matter of history.  It is highly relevant to the challenges Mongolia faces today.  In 1990 Mongolia became independent, for real.  Mongolian decisions and choices now shape the country’s destiny more than they had for centuries before that.

Look at the last 10 years.  For a few years, Mongolia benefited from a boom in investment in mining.  Government spending soared.   Then, for a few years, as investment fell sharply due primarily to government delays in implementing signed agreements, the government avoided the consequences of that decline by launching a huge fiscal and monetary expansion, even borrowing funds at high interest rates abroad to spend on all kinds of domestic programs.

Receiving a windfall from a boom in investment does not mean you should cast off all restraints and have a big national party with big increases in salaries, transfers, capital spending, whatever.  Borrowing billions of dollars on commercial bond markets in order to live more comfortably today, without concern about how the debt will be repaid is also unsustainable and irresponsible policy-making.

These are quite similar to Mongolia’s Soviet era economy, another time when Mongolians never had to address the fundamental economic policy issue; allocating scarce resources.

In the Soviet era Mongolia had equally unsustainable and illusory ‘development’, ‘growth’, ‘wealth’ – whatever you want to call it.

If Mongolia wants to be a wealthy developed country it needs to act like a wealthy developed economy.  That means setting long-term goals and working, hard, to achieve them, sacrificing short-term benefits for long-term gains.  Not just spending whatever you have today, borrowing even more, and then blaming everyone but yourself when you have nothing left and have debt problems.    Nostalgia for the past is simply another way to avoid facing the real challenges that one faces.

 

When you met with our project in September, you shared some very interesting insights about the way poverty was framed in the 1990s by Mongolian politicians.  Can you talk more about this?  Have you seen changes in the way poverty is addressed in politics? 

From 1993-5 I was working under the UNDP office in Mongolia, and the UN, along with other donors, was actively supporting the creation of a national poverty alleviation strategy and program.  It was quickly apparent that while there were a few Mongolian individuals who supported this effort, the government was not seriously interested: a lot of talk, meetings, photo-ops, but no real action.

The overall attitude then, and later, seemed to be that poor people were responsible for their own problems, and that if they needed help that was their family’s responsibility.  Resources were scarce and government had other priorities.  Those other priorities were different in different regimes, but the attitude toward poverty was quite similar.  Jasrai’s government borrowed $61 million (8% of GDP) to build the Darkhan Metallurgical Factory, at a time when resources were very scarce and despite numerous warnings from the World Bank and others that it would be unprofitable.  The Democrats were facing a collapse in copper prices (Erdenet was by far the most important enterprise in the country) and were fighting to keep the overall economy headed in the right direction, not focused on specific programs for the poor.

That started to change under Prime Minister N. Enkhbayar, who made social programs a bigger part of his platform and agenda.  But to this day there has been a consistent overwhelming preference for universal programs rather than targeted, largely because of the attitudes I’ve described.  It has been very hard to get support for programs that provide benefits only for the poor.

 

How do you think the early democratic period has come to shape the Mongolian economy and society in the present day?

I would say that by far the most important way is the Mongolian people’s strong and resilient commitment to democracy.  Everything else flows from that; the evolution of economic policy, of Mongolia’s external relations, of society in different regions of the country.

The dissolution of the negdel and the flows of population between urban and rural areas has had a key role as well.  It’s a remarkable story, with so many twists and turns.

Unhealthy attitudes about debt that developed under the Soviets, when the government borrowed year after year without any even slight concern about repayment, were further reinforced.  Borrowing from abroad continued to be a normal part of budgeting, and banks were used over and over to provide loan funds to projects and businesses that the government could not afford to support with its own resources, again with no attention to repayment capacity.  Borrowed funds were treated like any other funds, just spent on anything the borrower wanted rather than being invested in projects that were expected to pay enough of a return to allow repayment.  Of course the economic and budget situation were so dire for most of the 90s that some funds to finance daily operations of the government were appropriate.  But a pattern was created that has lasted even after those conditions changed.

A very closely related issue is ‘dependency on donors’, another way in which Soviet era mindset was carried on under democracy.  Again, donor dependency was inevitable and necessary for most of the early years of democracy.  But the danger of donor dependency are well known; undermining of national capacity to govern without support.  Mongolia had been moving out of that mindset after the mining boom took place.  But developments in recent years were a big step backward, and now Mongolia is having to turn to the outside world for help again.  I sincerely hope that government policy-makers understand how serious a reversal of progress this represents, even though they have no choice but to do this to deal with problems that they have inherited from the previous government.

 

In our project we are asking different experts how they would characterize Mongolian capitalism (see our forthcoming workshop on the 16th November at the National University)?  What do you think are three features of capitalism in the country?

Mongolian capitalism has taken off in a country with a small population, where people tend to know each other and where business (and political) competition tends to become highly personalized, which undermines confidence in fairness of outcomes and seems to make people at least as concerned with how well others are doing as they are with how well they are doing themselves.  Instead of making cooperation easier, the small size seems paradoxically to make cooperation much more difficult.  Mongolian capitalism has also been hindered by the difficulty of building effective regulatory institutions; that takes decades.  Lastly Mongolian capitalism has seemed to thrive when times are hard but go a bit off track when conditions improve.

At the same time let’s not lose touch with how much Mongolia has accomplished since those very hard times in the early 90’s!

 

Mongolia has recently gone to the IMF for help with its huge sovereign debt burden. How is this different from previous IMF negotiations? What role will international bond markets and currency swaps with China continue to play in helping to stave off further debt?

The point is not to stave off debts, right?  The point is to have access in the short term to additional low-cost debt in order to smooth the way to a more sustainable economy.  The main difference between this negotiation and previous ones, in my view, is that unlike the ESAF programs of the 1990s, and the last standby program, the need for this one has arisen primarily because of the government’s own policy mistakes, rather than external factors.  This creates a credibility problem; the government has to demonstrate that it will correct and avoid the mistakes that were made.  This same issue arises in Mongolian consideration of issuing further debt on global bond markets. Borrowing from China – whether through the Central Bank currency swap agreement or other means – carries different challenges, without upfront conditionalities but creating an even greater dependence on Chinese good will.

The critical issue now is not whether Mongolia will borrow more funds, but from where.  The IMF would have tougher upfront conditionalities, but their program would be designed to restore and deepen an economic policy framework that is consistent with healthy long-term growth.  China might offer funds with milder or no upfront conditionalities, but aimed at increasing Mongolia’s dependence on China, rather than improving Mongolia’s policy-making.  Does Mongolia want to be another Cambodia – now, possibly, the Philippines as well – a country whose perennially weak economy makes them unable to resist Chinese offers of assistance?

 

How do you think Mongolia could create a better business environment?

First thing would be to show that signed commitments made under one government are accepted as commitments by later governments as well.  The back and forth about OT, especially, but about TT and some others have seriously undermined Mongolia’s reputation. There should not be a perception that every time there is an election everything goes back to square one.

 

You recently published an article in the WSJ calling attention to Mongolia’s looming debt crisis.  What moved you to write this piece?  Was there a response to it in Mongolia?

Given the urgency of the issues, and the election of a new government with a strong parliamentary majority, it seemed a good moment to lay out some thoughts about the issues.  The most important point on my mind was that the current debt problem is almost entirely a self-inflicted problem, due to bad policy-making.  It’s gotten some attention, but of course the new Parliament and Government have some very good economists who knew this already.

 

Democracy without opposition: Dominant parties, the election, and the lack of an opposition in Mongolia

By ucsadul, on 29 June 2016

This is the first in a series of posts about Mongolia’s 2016 parliamentary elections.

Since the early 1990s Mongolia has been a parliamentary democracy. During his visit to Mongolia recently, John Kerry, US Secretary of State, hailed Mongolia an “oasis of democracy” (Torbati 2016), a fact which, given the current elections, I think, needs to be questioned. In a democracy opposition parties and individuals (individual MPs, groups and political parties etc) are one of the “milestones of democracy” (Dahl 1966: xiii-xiv). For example, on the 23rd January, 2008, the Parliamentary Assembly of the Council of Europe (PACE) “adopted Resolution 1601 (2008) on “Procedural guidelines on the rights and responsibilities of the opposition in a democratic parliament”. The resolution emphasized the role of political opposition as “an essential component of a well-functioning democracy” and advocated a certain institutionalization of parliamentary opposition rights, laying down a number of guidelines through which parliaments of member states are invited to draw inspiration (Nussenberger et al. 2010: 3).

The following blog post argues that Mongolia severely lacks professional, institutionalised, formalised and legally-protected permanent political opposition. According to the Council of Europe, democracy without opposition is “dysfunctional” (ibid: 7).

Figure 1. John Kerry, US Secretary of State in Mongolia

Figure 1. John Kerry, US Secretary of State in Mongolia[i]

Every four years, Mongolia reaches its maximal ‘politicization’ (uls törjih) during the parliamentary election. Political life is revealed through a variety of people, such as candidates standing for election, including singers, actors, wrestlers, boxers, doctors, scholars, lawyers, economists, activists, protestors, stakeholders, business owners, government employees, and politicians etc. Political campaigns often become intimate, revealing personal affairs and relationships, or discussing candidates’ history discovering ‘unusual’ occupations such as shireenii hüühen meaning “table woman” in bars. This year,  a campaigns against a female candidate, who had a history of working as a ‘table woman’, invited a famous transgender public figure N. Gan-Od who had the same job experience as “table woman”, to reveal information about the job description.[ii] Conflicts, fights, protests, demonstrations and even riots happen during and after elections. The 2008 parliamentary election result lead to a devastating riot on the 1st of July, when 5 people were killed, 300 injured, and 700 arrested, resulting in the first and only state of emergency being declared in the history of Mongolia.

Figure 2. Gan-Od VS Nara

Figure 2. Gan-Od VS Nara [iii]

The period leading up to election also gives rise to a number of active oppositional political forces, which lay dormant most of the time. We need to question whether these are actually political opposition, because many of them tend to be temporary, occasional, superficial and inefficient. All of the candidates prioritise their purpose to win a formal political position in government rather than opposing concrete issues, decisions, policies and actions of existing or potential rulers.

Since the 1990s, Mongolia has had two dominant parties currently known as the People’s Party and the Democratic Party. The Democratic Party has been the main political opposition for years, except from when they were in power from 1996 to 2000. After the People’s Party dominated Mongolia’s politics for 8 long years, in 2008 the Democratic Party lost in the election, which caused public anger, desperation and devastation, leading to the July 2008 riot. In 2012, finally the Democratic Party won the election again and took the lead of the country. Unfortunately, their rule failed to meet the public expectation of those who had anxiously waited and supported them for a decade since their rule ended in 2000.

Many feel unsatisfied with the past four years of political performance of the Democratic Party who have left the country in severe economic crisis with massive national external debt of around 22 billion USD. A recent IMF report warns that “Mongolia is at high risk of public debt distress” (Rodlauer et al 2015: 1). Economist H. Batsuuri writes that “current generation of Mongolians are considered to be unfortunate people as they have original sin, or foreign denominated debt, leaving to the next generations” (Batsuuri 2015: 4).

The failure of the Democratic Party has puzzled many voters, wondering if they should return to the People’s Party, which was largely hated and rejected in the 2008 riot and lost in the 2012 election, or if they should turn to smaller third parties and new political forces. But the People’s Party has multiple reasons to be partly blamed for the crisis and difficulties grew in the last four years of time. Starting at the end of 2014, the Democratic Party started another coalition with the People’s Party, which lasted for only a couple of months. A news article by Kh. Törbold compared the coalition of the two parties from 2008, which was often depicted with the name MANAN (or AN+MAN), which literally means fog in Mongolian (Törbold 2014). MAN is the popular acronym for Mongol Ardyn Nam (Mongolian People’s Party), while AN refers to the Ardchilsan Nam (Democratic Party). In this way, the two main parties repeatedly failed to perform a role of opposing political forces. Instead the coalition, corporation and conspiracy of the two party leaders dramatically increased, except at times of election. The two parties have a broader history of coalition governments from 1990 to 2015 (cf. Elisa 2012). In addition to their coalitions, there is a growing suspicion concerning corruption and conspiracy of the two party leaders. Many election campaigns appeal to voters not to choose MANAN, expressing narratives that question the two parties’ unfulfilled democratic duty to be politically opposed to one another. Election forecasts reveal significant downturns in support for the two leading parties. A poll conducted by the Sant Maral Foundation in March 2016 showed 38.3% support for the People’s Party and 31.7% support for the Democratic Party. Citizens are evidently disappointed in both of the parties and no longer trust either of them. Significantly, 42.3% of polled voters supported a proposal to abandon the multi-party parliamentary system in favour of an authoritarian form of government in which the president exercises absolute power,[iv] similar to Russia, North Korea and most of the Central Asian states.

Figure 3. Mongolia in the MANAN

Figure 3. Mongolia in the MANAN [v]

Figure 4. Tomorrow without MANAN

Figure 4. Tomorrow without MANAN

This situation has created an opportunity for other political parties and opposition forces to win an increased number of seats in the next parliament. For many smaller political parties, independent candidates standing for the election and all other political forces, this is a political advantage that has been unprecedented in the past 26 years. As a consequence, in February 2015, the National Labour Party (Khödölmöriin Ündesnii Nam) held its very first forum and declared itself the “new political force” (uls töriin shine khüchin) in Mongolia. Member of the Labour Party S. Borgil, who was later elected as the party leader, stated that “two political parties dominated Mongolia over the last 25 years, creating a MANAN tyranny” (Gan 2015).  In April 2016, prior the election, the Independence and Unity Party (Tusgaar Tognol Ev Negdeliin Nam) – a relatively new party not well known to the public – proclaimed itself “not the third political power, but the leading power” (Uyanga 2016).

Figure 5. National Labour Party: ‘New Political Force’

Figure 5. National Labour Party: ‘New Political Force’ [vi]

Figure 6. Independence and Unity Party: ‘Leading political force’

Figure 6. Independence and Unity Party: ‘Leading political force’  [vii]

The two dominant parties have sought to conspire against the possible rise of third political powers in the 2016 parliamentary election, amending the law on elections on the 25th of December 2015[viii], six months before the June 2016 election, to replace mixed-member proportional representation with a first-past-the-post voting system. According to T. Edwards (2016) the amendment “handicaps smaller parties” and “erodes democracy” in Mongolia. The public, civil society, organizations, NGOs, smaller parties and many others expressed strong resistance to the amendment, but with little impact. The famous poet Ts. Khulan addressed a letter to the President of Mongolia Ts. Elbegdorj, in which she blamed the President for not applying his veto right to block the amendment.[ix] The latest conspiracies of the two parties on the amendment of the electoral law have left Mongolia without the prospect of a strong political opposition. In addition to the amended election law, the minority parties are all handicapped by other problems and disadvantages. For example, the above-mentioned two political parties are relatively new, while older minority political parties have often been founded by and organised around one strong political figure who never resigns from the official position of party leader. Additionally, most of these parties remain inactive between elections, without performing the role of active political opposition. Because of unequal power relationships within these parties, single leader-based parties lack the professionalism and institutionalization required to form a strong political opposition.

But the major problems of the opposition in Mongolia do not only lie in the political parties themselves, so much as in the absence of legislation to support a political opposition –  for instance, there is no law or constitutional articles governing the rights and responsibilities of opposition parties. Needed are rules guaranteeing minority participation in parliamentary procedures, giving rights to supervise and scrutinize government policy; the right to block or delay majority decisions; the right to demand constitutional review of laws, and so on (Nussenberger 2015: 22). In the Council of Europe report on political opposition, Nussenberger et al. listed the following duties of a legally protected and institutionalized political opposition:

The function of the opposition is not to rule. Instead the opposition may have other functions. How these may best be listed is arguable, but among them may be the following: to offer political alternatives; articulate and promote the interests of their voters (constituents); offer alternatives to the decisions proposed by the government and the majority representative; improve parliamentary decision-making procedures by ensuring debate, reflection and contradiction; scrutinise the legislative and budgetary proposals of the government; supervise and oversee the government and the administration; enhance stability, legitimacy, accountability and transparency in the political processes (ibid: 7).

Mongolians are blaming the ruling party for current crisis, but it is not only the rulers who can be blamed. The political culture is also at fault, as seen from the absence of a political opposition willing to engage and react against unfair, illegal, inaccurate and improper acts by the ruling parties. To make its democracy an “oasis”, at least Mongolia needs to formalize, institutionalize and validate its political opposition.

 

References

Batsuuri, H. (2015). Original Sin: Is Mongolia Facing an External Debt Crisis? The North East Asian Economic Review, 3 (2), pp. 3-15.  

Dahl, R. (1966). Preface. In: Robert Dahl (ed.) Political Oppositions in Western Democracies. New Haven and London: Yale University Press, pp. xiii-xxi.    

Edwards, T. (2016). Mongolia’s new election rules handicap smaller parties, clear way for two-horse race. Reuters, [Online] Available at: http://www.reuters.com/article/us-mongolia-election-idUSKCN0YB046 [Accessed 25 Jun. 2016].

Elisa, T. (2012). Evsliin zasgiin gazruudyn ergej zadarsan tüükh. New.mn, [Online]. Available at: http://www.news.mn/r/127486 [Accessed 25 Jun. 2016].  

Gan, M. (2015). Uls töriin shine khüchin baiguulakhaa medegdlee. Gogo News. Available at: http://news.gogo.mn/r/156123 [Accessed 25 Jun. 2016].

Nussenberger, A. Özbudun, E., and Sejersted, F. (2010). On the Role of the Opposition in a Democratic Parliament. [Online] Strassbourg: Nussenberger, Özbudun and Sejersted, pp. 3, 7, 22. Available at: http://www.venice.coe.int/webforms/documents/default.aspx?pdffile=CDL-AD(2010)025-e [Accessed 25 Jun. 2016].

Torbati, Y. (2016). Kerry hails Mongolia as ‘oasis of democracy’ in tough neighborhood. Reuters, [Online]. Available at: http://www.reuters.com/article/us-usa-mongolia-idUSKCN0YR02T [Accessed 25 Jun. 2016].

Törbold, Kh. (2015). Shine zasgiin gazryn ehnii shiidlüüd. Eagle, [Online]. Available at: http://politics.eagle.mn/content/read/26016.htm [Accessed 25 Jun. 2016].    

Rodlauer, M., Miyazaki, M., and Kähkönen, S. and Verghis, M. (2015). Mongolia: Staff Report for the 2015 Article IV Consultation – Debt Sustainability Analysis. [Online]. Available at: https://www.imf.org/external/pubs/ft/dsa/pdf/2015/dsacr15109.pdf [Accessed 25 Jun. 2016].   

Uyanga, Kh. (2016). G. Uyanga: Uls töriin shine khüchin bish, tergüülekh khüchniig zarlan tunkhaglaj baina. UB Life. [Online] Available at: http://www.ub.life/political/210 [Accessed 25 Jun. 2016].

 

[i] Available at: http://www.reuters.com/article/us-usa-mongolia-idUSKCN0YR02T [Accessed 25 Jun. 2015].

[ii] Available at: https://www.youtube.com/watch?v=W4t544g4ztM [Accessed 25 Jun. 2016].

[iii] Available at: http://resource.zone.mn/hotnews/images/2016/6/af7f2078cf57886348ed0bd4eea30e9c/Snapshot_2016-06-06_130651_700x700.png [Accessed 25 Jun. 2016].

[iv] Available at: http://www.santmaral.mn/sites/default/files/SMPBM16.Mar%20(updated)_0.pdf [Accessed 25 Jun. 2016].

[v] Available at: http://resource.news.mn/politics/photo/2011/1/494a643b7fbca712/c20d116aadd05f5bbig.jpg [Accessed 25 Jun. 2016].

[vi] Available at: http://www.news.mn/r/211280 [Accessed 25 Jun. 2016].

[vii] Available at: http://www.ub.life/political/210 [Accessed 25 Jun. 2016].

[viii] The law is available at: http://www.legalinfo.mn/law/details/11558 [Accessed 25 Jun. 2016].

[ix] The full version of the letter is available at: http://www.unen.mn/content/63693.shtml [Accessed 25 Jun. 2016].