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P 131043Z NOV 09
FM AMEMBASSY ULAANBAATAR
TO SECSTATE WASHDC PRIORITY 3111
INFO NSC WASHINGTON DC PRIORITY
SECDEF WASHINGTON DC PRIORITY
AMEMBASSY BEIJING 
AMEMBASSY MOSCOW 
AMEMBASSY SEOUL 
AMEMBASSY TOKYO

C O N F I D E N T I A L ULAANBAATAR 000329 
 
 
STATE FOR EAP/CM 
 
E.O. 12958: DECL: 11/13/2034 
TAGS: PGOV PREL MG
SUBJECT: SELECTION OF NEW MONGOLIAN FOREIGN MINISTER 
HIGHLIGHTS ASSERTIVE YOUNG RULING PARTY WING 
 
REF: A. ULAANBAATAR 308 
     ¶B. ULAANBAATAR 293 
 
 
Classified By: Political Section Chief Andrew Covington, 
Reasons 1.4 (b) and (d) 
 
¶1. (C) Summary: On November 12, Parliament approved the 
nomination of G. Zandanshatar as foreign minister.  The new 
foreign minister represents an assertive young wing of the 
Mongolian People's Revolutionary Party (MPRP) intent on 
having its turn at the helm.  The leading candidates over 
which Zandanshatar triumphed were established members of the 
MPRP already in significant positions of power, whereas 
Zandanshatar was merely an MP with a minor committee 
chairmanship.  His selection reflects the waning power of 
former Prime Minister Bayar, who is back is Seoul for medical 
treatment.  End Summary. 
 
¶2. (C) On November 12, Parliament easily approved the 
nomination of G. Zandanshatar as the new foreign minister of 
Mongolia.  Zandanshatar's selection comes more than two weeks 
after the resignation of former Prime Minister Bayar for 
health reasons resulted in the elevation of then-Foreign 
Minister Batbold to the PM position (reftel A).  This 
relatively long period indicates Batbold has had more 
difficulty determining the composition of his cabinet than 
had been the case for his predecessor.  Bayar's strength 
stemmed not from loyal blocks within his party, but rather 
from his forceful character, which was largely responsible 
for establishing a coalition with the Democratic Party in 
fall 2008 and for the passing of the Oyu Tolgoi Investment 
Agreement (reftel B) in October this year.  Batbold, who is 
seen as a good compromise candidate as PM, has not shown the 
same forcefulness but may yet rise to the occasion. 
 
--------- 
THE FIELD 
--------- 
 
¶3. (C) During these two weeks, several candidates from Bayar 
and Batbold's party, the MPRP, emerged to seek the FM slot. 
At the same time, the MPRP entreated the Democratic Party 
(DP) to obtain the DP's coveted Finance Ministry seat. 
Despite an internal MPRP vote in favor of seeking the Finance 
slot, the DP refused to surrender such a plum position. 
 
¶4. (C) Batbold emerged as the incoming PM in the last week of 
October, immediately after Bayar announced that he was 
stepping down.  Bayar had the advantage of knowing his own 
plans, and as such began to position Batbold as his heir 
weeks in advance.  On November 2, Batbold began to push for a 
new FM in earnest.  Even at this early stage, it was clear 
that that two parties sought to maintain the coalition in its 
present form.  On the same day, Batbold requested that 
Parliament retain the same ministries and cabinet positions 
as Bayar's government, with no shifting of titles or 
responsibilities among ministries.  This request did not 
detail if the 9-to-6 MPRP-to-DP distribution of cabinet seats 
would remain or even who might occupy those seats, but the 
lack of shifting indicated little change would occur. 
 
¶5. (C) On November 2, two names topped the FM candidacy list: 
Deputy Speaker N. Enkhbold and MP G. Zandanshatar. 
Long-serving MP N. Enkhbold represents an established and 
experienced wing of the party, while Zandanshatar, at age 39 
and with the DPRK parliamentary group chairmanship his most 
senior responsibility, stands for a young, highly ambitious 
wing of the MPRP seeking its turn at the helm.  Observers and 
even contacts within the MPRP at that point considered N. 
Enkhbold to have the edge due to his experience and 
reputation, which is why Enkhbold's name came up as part of 
an MPRP offer to the DP to have Finance Minister Bayartsogt 
(DP) move to the Foreign Ministry and allow N. Enkhbold to 
take over Finance.  As noted, the DP did not bite, instead 
telling the MPRP to fill the FM slot with an MPRP candidate, 
full stop. 
 
¶6. (C) Once the DP's position on the Finance Ministry became 
clear (despite a few half-hearted MPRP approaches in the days 
that followed), the FM debate shifted back to N. Enkhbold and 
¶G. Zandanshatar.  The fact that Enkhbold was not elevated 
quickly into the FM position meant that Bayar's persuasive 
power was much reduced (he is now in Seoul again for medical 
treatment) despite his continued role as an MP and as 
Chairman of the MPRP, and that Zandanshatar's faction within 
the MPRP was stronger than his internal party opposition had 
reckoned.  Zandanshatar is closely aligned with a group of 
similarly young, ambitious, and aggressive politicians 
centered around Khurelsukh, Secretary General of the MPRP. 
 
--------------------------------- 
A COMPROMISE CANDIDATE EMERGES... 
--------------------------------- 
 
¶7. (C) As of November 4, neither candidate had emerged 
victorious from the internal party wrangling, which became 
increasingly heated.  That day, a compromise candidate 
emerged: R. Bold, head of the General Intelligence Agency 
(GIA) and former Ambassador to the United States (not to be 
confused with Defense Minister Lu. Bold).  For some 24 hours, 
Bold appeared to be the frontrunner, likely because MPRP 
moderates wanted the dispute to end quickly.  Although N. 
Enkhbold may have been satisfied with this option given his 
already powerful position as Deputy Speaker, Zandanshatar's 
faction reasserted itself, which kept N. Enkhbold in the 
fight. 
 
----------------- 
...AND DISAPPEARS 
----------------- 
 
¶8. (C) R. Bold, sensing the morass the party would be in by 
expanding this to a three-way fight, pulled his name from 
consideration on November 5.  Bold's reasons for pulling out 
also include his concern that the DP will soon succeed in 
inserting one of their own as deputy at the GIA, now that 
Elbegdorj is president and head of the National Security 
Council.  Furthermore, as GIA Director, R. Bold already has 
ministerial rank. 
 
¶9. (C) After Bold's retreat, the Enkhbold-Zandanshatar 
dispute reignited and continued over the weekend of November 
7 and 8.  On Tuesday, November 10, with speculation growing 
as to why Batbold had not yet put an FM in place, 
Zandanshatar's name was suddenly on everyone's lips.  At an 
NDI event on November 10, former FM Erdenechuluun (MPRP) 
asked MFAT Americas Department Director Odonjil who the FM 
would be, to which Odonjil replied it would be Zandanshatar. 
Erdenechuluun was surprised.  On the same day, Presidential 
Foreign Policy Advisor Purevsuren called the Charge's office 
and poloff's cell to indicate Zandanshatar was the one. 
 
¶10. (C) Zandanshatar's sudden victory was the result of 
another MPRP caucus meeting that selected Zandanshatar for 
the FM slot.  With the MPRP in control of Parliament and the 
DP uninterested in interfering in the FM decision at the risk 
of its Finance slot, the MPRP's decision guaranteed the FM 
job to Zandanshatar.  How the tie was broken is not yet 
clear, but N. Enkhbold, with his Deputy Speaker title, had 
less to lose, and PM Batbold had everything to gain by ending 
an intra-party conflict that threatened to portray him as 
ineffectual and which would expose MPRP internecine strife to 
wide-scale public scrutiny.  (Note: During the November 10 
conversation between Odonjil and Erdenechuluun, both agreed 
that N. Enkhbold had little to be upset about because the 
Deputy Speaker position was far more desirable, given 
Parliament's status as the most powerful branch of 
government.  End Note.) 
 
-------------------------- 
ONE MINOR PORTFOLIO CHANGE 
-------------------------- 
 
¶11. (SBU) One other ministerial position also changed: The 
Chair of the Cabinet Secretariat (similar to a Chief of Staff 
position) has shifted from Ms. Dolgor, whose popularity had 
been waning in recent months, to MP Ch. Khurelbaatar, Chair 
of the Parliamentary Standing Committee on Budget.  Both are 
MPRP, keeping the MPRP-to-DP ratio intact.  Khurelbaatar 
recently returned from a weeklong parliamentary exchange in 
Washington through the House Democracy Partnership.  He has 
since told poloffs he is looking forward to implementing 
budget and legislative reform ideas stemming from his visit 
to Washington 
 
---------------- 
COALITION STABLE 
---------------- 
 
¶12. (SBU) What was clear throughout this period is that the 
MPRP and the DP were both determined to maintain the 
coalition government more or less in the format Bayar had 
established.  Despite discussions on trading the Finance seat 
for the Foreign Ministry and perhaps also the Chief of Staff 
positions, neither party was willing to let the coalition 
collapse. 
 
¶13. (SBU) In the MPRP's case, with the election of Elbegdorj 
as president in May 2009, the DP now has veto power over the 
MPRP, which, does not have sufficient MPs to override a 
presidential veto, despite its comfortable majority.  (Of 76 
seats, the MPRP has 46, with 39 being the absolute majority 
threshold and 51 being the two-thirds required to override.) 
 
¶14. (SBU) As for the DP, the majority of the party supports 
staying in the coalition over retreating to the role of 
opposition party in Parliament, despite the weight of 
Elbegdorj's veto.  Elbegdorj, who initially resisted a 
coalition with the MPRP last fall when he was an MP and the 
DP chairman, has also voiced support in recent weeks for 
maintaining the coalition. 
 
------- 
COMMENT 
------- 
 
¶15. (C) The MPRP is far from monolithic, as the past two 
weeks of wrangling illustrate.  Bayar, despite his continued 
leadership of the party, had the inertia to install only 
Batbold.  This inertia was insufficient to get his childhood 
friend, R. Bold, installed as foreign minister.  The 
selection of Zandanshatar, who has little in common with 
Bayar, is an indicator that the MPRP is beginning the process 
of yielding power to the younger generation.  This younger 
generation is split between a brash and aggressive wing 
represented by Zandanshatar and Khurelsukh, and an apparently 
smoother but no less ambitious wing represented by Minerals 
and Energy Minister and recently elected MP Zorigt. 
 
¶16. (C) Zandanshatar carries baggage that may allow enemies 
within his party to replace him relatively easily in the 
future.  He, Khurelsukh, and another MPRP member were 
implicated in a gambling scandal involving embezzlement of 
USD 11 million from a formally state-owned bank and other 
misuses of state property from 2005 to 2007.  Consequently, 
few in the public believe him to have clean hands.  Others 
who have worked with Zandanshatar report him to be malleable 
and having the tendency not to follow through on projects and 
commitments.  Moreover, many Mongolians were surprised to 
hear Zandanshatar will be the new FM, since he has a 
reputation as a poor manager and does not have extensive 
foreign policy credentials.  In conversations in 2007 with a 
previous poloff, Zandanshatar noted his interest in changing 
the MPRP's name, ideology and party program.  More than two 
years on, little of this ambitious program has entered the 
MPRP's discussions or Zandanshatar's public statements and 
legislative record. END COMMENT 
 
 
HILL