According to the preliminary results, MPP secured 54% of the vote (68 seats) in the parliamentary elections held on June 28, 2024, in Mongolia.
Mongolian People's Party Retains Power
The MPP's slimmed-down majority signals a potential shift in governing style. While still in control, the party is likely to be more open to compromise and negotiation with the opposition.
This could mean a less assertive approach to the state's role in the economy, particularly in light of the DP's strong showing and their pro-privatization agenda. However, with the presidency remaining under MPP influence until 2027, a complete reversal of the MPP's core economic policies is unlikely.
Internally, Oyun-Erdene is poised to consolidate his control over the MPP. With more loyal MPs elected, he has a stronger base to push his agenda and sideline remaining rivals.
Several powerful figures, Parliament speaker Zandanshatar, MPP whip Togtokhsuren, Deputy PM Khurelbaatar, Health Minister Chinzorig and Defense Minister Saikhanbayar lost their seats. This suggests consolidation of power within the MPP, with Oyun-Erdene now positioned to appoint a more loyal cabinet and a new speaker of the parliament.
A Stronger Opposition, But Unity Remains Elusive?
The Democratic Party faces a crucial moment. With their seat count increased, pressure is on for Chairman Gantumur, a moderate open to compromise, to unite the fractured party. The return of former President Battulga, with his strong voter base and more hardline stance, adds a layer of complexity. The DP’s success in effectively challenging the MPP hinges on bridging these internal divides.
Meanwhile, the smaller parties (HUN, National Coalition, and Civil Will Green Party), while holding limited individual power, could form a vocal bloc, amplifying calls for greater private sector involvement in the economy and increased scrutiny of the government's actions on corruption and other policy issues.
The National Labor Party (HUN) performed poorly, securing only 8 seats, which is insufficient to form a caucus in the new parliament.
Implications: Stability, But With Checks and Balances
For investors, the immediate impact on the investment environment is likely to be minimal. The previous government's policies are expected to continue, with the economy benefitting from strong coal and copper exports. However, the reduced MPP dominance creates a more balanced and competitive political system, reflecting the voters' desire for change.
This new parliament, with its increased diversity and female representation (from 17% to 25%), could usher in an era of greater scrutiny and accountability.
The upcoming budget process will be a key test, as the opposition flexes its muscles and demands concessions. Ultimately, this shift towards a less dominant ruling party could lead to more nuanced and responsive governance in Mongolia, creating a more stable and predictable environment for businesses in the long term.
