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Economy / Featured News / Mongolia News / Politics / September 12, 2014

Cabinet reshuffle in the Government for Change

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The head of the ‘New Government for Changes’, N.Altankhuyag, informed the public that he is going to reshuffle his Cabinet. This announcement pleased a lot of people.
The reshuffling will cover several ministerial positions and will lead to strong competition among the factions in the Democratic Party. They might already be planning to claim their desired positions.
A few hours before the Prime Minister made his statement, he met with leaders of the Mongolian People’s Party (MPP). The MPP concluded, “The 100-day economic program, EZEN-100, was not efficient, couldn’t fulfill 60 percent of 70 planned projects, and the economic situation has not improved. Honestly, it got worse.” They added, “The Democratic Party has to make Parliament responsible. Let’s see whether the Democratic Party is a responsible party or not.”

Fundamental issues

It is true that foreign investment has decreased, the USD exchange rate has gone up, and the prices of everyday products have increased. Of course, the government is working on fixing it. Just as you can’t build a house without a foundation, previous governments’ projects and decisions have greatly influenced this poor economic situation.
The first investment in Oyu Tolgoi has been spent and the underground mining operation has been delayed. These factors have affected the decrease in foreign investment.
The previous government distributed income from Oyu Tolgoi and Tavan Tolgoi to the public as a part of “Ekh Ornii Khishig” (National Monthly Allowance) during the election.
In relation to the long named law, “Law on Prohibiting Mineral Exploration and Extraction Near Water Sources, Protected Areas and Forests”, hundreds and hundreds of exploration licenses were cancelled, which also may have influenced foreign investment. It is also true that foreign currency earned is paying those debts.
Due to these factors, a decrease was shown in the results of the EZEN-100.
But, the ‘New Government for Changes’ is strengthening the law and legal environment, and economic conditions are improving. On the other hand, the government is at fault because it could not improve and foster the situation over the past two years.
Even though the economy has declined in some sectors, there were some successes in construction, roads and upgrade projects.
The Prime Minister emphasized what the government accomplished when he spoke to the public and wanted to remind people who are following only one view: that the government has not done anything.
The previous five governments built 2,300 km of road in 12 years and 800,000 square meters of apartments in a year, but the N.Altankhuyag-led Cabinet constructed 2,500 km of road in two years and made 1.2 million square meters of apartments available in a year. Chinggis Bond funding supported construction material factories and consequently, Mongolia is able to meet its domestic demand for cement and armature. We have to remember that everything has two sides.

Who will be caught in the Cabinet reshuffle?

The political and economic conditions in Mongolia show that there is no other way to do a Cabinet reshuffle. There are 16 ministries and 19 ministers in the government. That is why N.Altankhuyag feels that structural change is needed.
But, of course, he did not announce the members who would be leaving. Press organizations are putting forward predictions of the ministers who will be named. It is obvious that the relevant ministers have to take responsibility for the poor performance of the economy. Almost since the ministers were appointed, namely Minister of Economic Development N.Batbayar, Minister of Mining D.Gankhuyag, Minister of Justice Kh.Temuujin, Minister of Roads and Transportation L.Gansukh, and Minister of Health N.Udval, they have been heavily criticized.
The Cabinet reshuffling will take place during the fall session of the Parliament.


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