- January 5th, 2012
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January 05, 2012
ULAN BATOR Jan 5 (Reuters) – The Mongolian Democratic Party will withdraw from the coalition government ahead of parliamentary elections scheduled for June in the remote and landlocked country, the party said on Thursday, leaving a number of vacancies in cabinet.
The announcement was made at a media conference by party chairman Norov Altanhuyag, who is also deputy prime minister in a sometimes fragile coalition with the Mongolian People’s Party.
Mongolia is expected to be one of the world’s fastest-growing economies over the next decade as a result of a mining boom and billions of dollars in foreign investment.
The $10 billion Oyu Tolgoi copper-gold deposit, 66 percent owned by Canada’s Ivanhoe Mines, is set to begin operations later this year. Foreign investors are also eyeing stakes in Mongolia’s 7.5 billion-tonne Tavan Tolgoi coal mine.
However, investors have warned that Mongolia’s weak legal system, together with political instability and populist legislation ahead of the elections, could serve to undermine confidence.
The Democrats’ withdrawal will leave vacancies at the ministries of finance, defence, transportation, environment and health.
The coalition led by prime minister Sukhbaatar Batbold was formed after 2008 parliamentary elections resulted in riots across the capital of Ulan Bator. Five people were killed in clashes with police amid rumours of voting irregularities.
“By having a coalition government, Mongolia was able to have a stable political life and overcome the global financial and economic crisis with less damage,” Altankhuyag was quoted as saying by China’s Xinhua news agency.
He said the decision would be submitted to party members for formal approval at their annual summit next week. (Reporting by Khaliun Bayartsogt, Writing by David Stanway)