Mongolia's parliamentary elections on June 28th are shaping up to be a pivotal moment for the country's democracy and economic future. With the ruling Mongolian People's Party (MPP) facing growing public dissatisfaction and a more fragmented opposition, the outcome is far from certain.
In the 2024 election the MPP faces deep public dissatisfaction but may benefit from a fragmented opposition. Despite its significant lead, the MPP's ratings have peaked. The Democratic Party (DP) faces the challenge of closing the gap as much as possible. Other smaller parties still lack enough resources and infrastructure to challenge major parties.
According to the latest opinion polls by Sant Maral, disapproval of both the MPP and the opposition DP's direction remains high, with 64.1%-68.9% and 67%-86.4% of voters respectively believing they're heading in the wrong direction in 2023 and 2024.
This suggests persistent dissatisfaction with both parties, with the DP's disapproval rating surpassing the MPP's. Moreover, over 80% of voters distrust political parties, feeling they don't represent public opinion, posing a significant challenge for all parties seeking a strong mandate.
Economic Anxiety and Corruption Fatigue
Despite strong economic growth following COVID downturn, only 7.6% of Mongolians rate the current economic situation as "good." Nearly 60% believe the economy is stagnant or declining. This disconnect between macro indicators (e.g. 7.1% GDP growth in 2023) and everyday struggles is fueling unease among voters.
Corruption remains a major concern, with 56.2% of respondents believing government policies "always" fail to solve key problems. The MPP's handling of this issue is seen as a major weakness, creating an opening for the opposition.
Desire for Change, but Skepticism Towards Alternatives
87.2% of Mongolians want "decisive full-scale reforms" to the socio-political-economic system. However, faith in any specific party to deliver is lacking.
Distrust of political parties is high, with 86.4% believing they don't represent public opinion. This creates a challenge for both the MPP and the opposition to articulate a compelling vision that resonates with voters.
The "Strong Leader" Paradox
While 46.7% are "rather satisfied" with democracy, a significant 33.8% believe Mongolia is "changing to a dictatorship." This suggests a yearning for decisive leadership, even if it comes at the expense of democratic processes.
This sentiment is mirrored in the high approval (69.3%) of Russia as a partner, despite its authoritarianism and the Ukraine war. The perceived need for strong leadership may benefit the incumbent MPP, but also raises concerns about democratic backsliding.
Key Issues Beyond Economics
Unemployment (24.2%) and inflation (16.2%) top the list of concerns, reflecting economic anxiety. But education (9.7%), law enforcement (4.8%), and social justice (3%) are also significant, indicating a desire for broader societal improvements.
While mining has driven growth, voters are divided on how to use its wealth. 38.6% favor state investment for economic development, but 43% want more social programs, highlighting tensions over distribution.
Implications for Investors
Resource nationalism is rising, with strong preference for Mongolian ownership and state control in strategic mines.
Public wants a fair share of mining revenue, both through direct benefits and social programs.
Transparency and governance are key, with investors needing to demonstrate ethical conduct to gain public trust.
Desire for a "strong leader" could benefit incumbents, but also creates risk for investors if national goals conflict with their interests.
If the DP fails to secure a majority, which is now a likely scenario, party chairman Lu. Gantutmur, who is rumored to have resigned himself to defeat and is reportedly indulging in extended drinking sessions, will likely be replaced.
The new mixed electoral system introduces uncertainty into the election outcome. It favors parties that are logistically well-organized, so overall party ratings may not accurately reflect the actual results.
Investors and businesses must adapt to a more complex investment climate, where public sentiment and geopolitical dynamics influence business decisions. By aligning with public expectations and demonstrating responsible conduct, investors can navigate the uncertainty and capitalize on Mongolia's growth potential.
The opinion poll above sourced from Sant Maral’s April-May survey. In a highly hypothetical exercise, Mongolia Weekly projects the following seat distribution in the 126-seat parliament: MPP - 67 (53%) seats, DP - 45 seats (36%), HUN - 10 seats, and Other (National Coalition) - 4 seats. The projected seat distribution was calculated by first distributing the "undecided" 42.7% proportionally to the decided voters for each party, giving a new projected vote share. Then, this projected vote share was applied to the 126 parliamentary seats, rounding to the nearest whole number for each party. Simple majority of 64 seats needed to form the government.