Amar Adiya
May 16
As public outrage over systemic corruption and mismanagement of natural resources intensifies, Prime Minister of Mongolia Oyun-Erdene has embarked on an ambitious dual reform agenda aimed at overhauling the judicial system and ensuring the equitable distribution of the nation's vast mineral wealth.
This push for sweeping changes comes in the wake of a precipitous decline in Mongolia's corruption perception, as assessed by Transparency International, and widespread public fury over the mishandling of coal sales and shipments to China. The latter culminated in large-scale street protests in late 2022, leading to management changes and corruption convictions at the state-owned Erdenes Tavan Tolgoi coal mining company.
At the core of the judicial reform lies Oyun-Erdene's conviction that first-instance court judges lack the necessary expertise and impartiality to adjudicate high-level corruption cases. He contends that they are susceptible to undue influence from senior judges and powerful political figures. To rectify this, the prime minister proposes the establishment of specialized "anti-corruption" courts, staffed with judges handpicked for their acumen in handling complex graft cases.
However, this proposition has sparked concerns about the potential concentration of power within a smaller cohort of judges, heightening fears of compromised impartiality – the very issue the reform seeks to address. Critics also warn that reducing the number of courts mandated to handle white-collar crimes could inadvertently diminish the system of checks and balances that safeguards judicial integrity.
The ruling Mongolian People's Party (MPP) has proposed granting the Supreme Court a greater say in nominating judges to the Constitutional Court, ostensibly to enhance the court's professionalism and legal expertise. However, opposition voices are apprehensive that this change could increase the influence of President Khurelsukh over the Constitutional Court, a body already perceived as being under the president's sway due to his control over the Supreme Court.
Critics argue that the proposed reforms could undermine the Constitutional Court's impartiality, enabling President Khurelsukh, whose term ends in 2027, to potentially amend the constitution and extend his tenure.
Parallel to the judicial reforms, Oyun-Erdene has unveiled his vision for a National Wealth Fund, aimed at ensuring the fair distribution of Mongolia's mineral riches among all citizens and future generations. This initiative seeks to address the perceived mismanagement of resource revenues in the past and establish a robust framework for their equitable allocation over the next three decades.
The fund imposes stringent ownership restrictions, capping individual or related-party holdings in few strategic mineral deposits at 20%, and levying a 30% tax on inherited or gifted income derived from these assets. This measure may directly hit private mining entities like MMC (aka Energy Resource) and MAK, underscoring the government's determination to assert greater state control over these invaluable natural resources.
According to Erdenes Mongol, the state-owned entity that drafted the bill, a transition period until 2030 will be implemented, during which respective line ministries will manage the day-to-day operations of the new funds, while investment and spending decisions will rest with lawmakers and parliamentary review. This arrangement is necessitated by Mongolia's current lack of skilled personnel to manage a sovereign wealth fund akin to Norway's.
However, critics remain skeptical about the dearth of robust safeguards and guardrails against potential misuse or pillaging of the fund for political or electoral expediency, especially given the assurance that lawmakers and politicians will have the final say on investment and spending decisions during the transition period.
As Prime Minister Oyun-Erdene invokes the exemplars of Norway and Singapore in prudent resource management, the nation finds itself at a crossroads. Whether this twin reform agenda ushers in an era of transparency, accountability, and shared prosperity, or succumbs to the insidious forces of corruption and political self-interest it seeks to vanquish, remains to be witnessed.
The success of these reforms will hinge on striking a delicate balance between addressing legitimate public grievances, safeguarding the independence and impartiality of key institutions, and implementing robust governance mechanisms to prevent the misappropriation of the nation's mineral wealth.
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