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RUEATRS/DEPT OF TREASURY WASHDC
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RUEHLMC/MILLENNIUM CHALLENGE CORP WASHINGTON DC 0457
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UNCLAS SECTION 01 OF 02 ULAANBAATAR 000085 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE PASS USTR, USTDA, OPIC, AND EXIMBANK 
STATE FOR EAP/CM AND EB/IFD/OIA 
USAID FOR ANE FOR D. WINSTON 
MANILA AND LONDON FOR ADB, EBRD USEDS 
TREASURY FOR USEDS TO IMF, WORLD BANK 
 
E.O. 12958: N/A 
TAGS: EINV PREL ETRD EMIN ENRG MG
SUBJECT: Parliament Fires Controversial Trade Minister 
 
Ref: (a) Ulaanvaatar 080, (b) 06 Ulaanbaatar 0870, 
 
(c) 06 Ulaanbaatar 0875, (d) Ulaanbaatar 0080 
 
Sensitive But Unclassified - Not for Internet Distribution. Contains 
proprietary and confidential business information 
 
¶1. (SBU) SUMMARY: On February 6, the State Great Hural (SGH, 
Mongolia's parliament) voted to sack controversial Minister of 
Industry and Trade B. Jargalsaikhan.  Although many in and out of 
government -- particularly in the mining community -- greeted the 
ex-minister's dismissal with unconcealed glee, some Mongolians see 
Jargalsaikhan as a compelling speaker and populist who rails against 
"evil foreigners" who steal from Mongolia.  Jargalsaikan's party is 
also likely to be removed from the ruling coalition, and his former 
ministry is at risk to consolidation in an upcoming government 
reorganization.  END SUMMARY. 
 
Voted Out 
--------- 
 
¶2. (SBU) After a televised debate, the SGH voted by a 34-15 margin 
on February 6 to dismiss controversial Minister of Industry and 
Trade B. Jargalsaikhan.  The motion to sack Jargalsaikhan was 
submitted by recently dismissed Minister of Health Gundalai, who 
charged that Jargalsaikhan was involved in corruption.  Adding to 
the spectacle of the parliamentary debate, Gundalai unsuccessfully 
sought to withdraw his motion, which the Speaker declined to agree 
to, noting that the motion had already been approved by the Economic 
Standing Committee and submitted for plenary discussion.  With 
considerable support from MPs from the MPRP, the majority and 
dominant party in the ruling coalition, the SGH then voted to oust 
Jargalsaikhan.  Jargalsaikhan immediately convened a press 
conference where he termed his sacking illegal and swore to 
challenge the SGH's action before the Constitutional Court, lamented 
the absence of Prime Minister Enkhbold from Parliament during the 
vote ("I felt like a fatherless child," Jargalsaikhan said), and 
said he meant to hold the PM to the coalition government agreement 
that the ministry should be filled by someone from his Republican 
Party.  Since Jargalsaikhan is the only MP from the party, however, 
most observers believe that the Republican Party soon will be 
removed from the coalition. 
 
The Ding Dong the Witch is Dead 
---------------------------------- 
 
¶3.  (SBU) Mining companies have recently gone public (ref D) with 
their view that Jargalsaikhan's ministry, by embargoing transfers of 
mining licenses, had engaged in conduct effectively amounting to 
expropriation.  Consequently both foreign and domestic firms were 
singing hosannas when the news broke yesterday.  One long-time 
mining consultant greeted CommOff's call with a hearty rendition of 
"Ding Dong the Witch is Dead."  More seriously, an American lawyer 
expressed hope that expulsion would allow the administrative 
apparatus to restart immediately, as she had several multi-million 
dollar deals that could only be signed if licenses could be 
transferred and reformatted.  A more cynical miner worried about 
Jargalsaikhan's replacement, although he felt that the GOM would be 
hard put to find someone as wretched as the ex-minister.  However, 
overall he called the dismissal, "the single most business friendly 
gesture" the GOM had executed in over a year. 
 
¶4. (SBU) More restrained in their comments, GOM contacts at the 
Ministry of Industry and Trade were no less pleased at the outcome. 
MIT official D. Zorigt (protect), an up and coming member of the 
Mongolian People's Revolutionary Party, offered a nuanced view of 
the dismissal.  (Note:  Jargalsaikhan unsuccessfully attempted to 
sack Zorigt last spring -- undoubtedly to put Jargalsaikhan's own 
crony into the job.)   Zorigt recalled that Jargalsaikhan, never an 
early riser, would routinely start work at 3:00 PM and often called 
meetings with staff and businesses anytime between 6:00 PM to 
midnight.  Zorigt expressed pleasure that he would no longer have to 
 
ULAANBAATA 00000085  002 OF 002 
 
 
attend late night meetings where the minister would accuse him and 
others of being foreign pawns and order them to undertake acts 
without any commercial basis or value to the people of Mongolia. 
Professionally, Zorigt explained that the passing of Jargalsaikhan 
would not affect US-Mongolia trade relations and policies.  Deputy 
Minister Sodbaatar would continue to supervise these efforts. 
However, Zorigt noted that MIT's future as ministry is in doubt as 
government restructuring and a reduction in ministries is considered 
in coming weeks.  During its year-long tenure, Zorigt noted, the 
Enkhbold government had eroded and redistributed the MIT portfolio 
in an effort to neuter the troublesome Jargalsaikhan. 
 
A Popular Populist 
------------------ 
 
¶5. (SBU) Reviled though he was by those who had to deal with his 
ministry, Jargalsaikhan is popular with a slice of Mongolians.  One 
middle-class Mongolian professional told CommOff that she thought 
the ex-minister is a thorough rogue, as corrupt and thieving as any 
Mongolian politician.  Nevertheless, she admired his flair with 
words and agreed with their content.  She found merit in his attacks 
against Chinese and Russian interests bent on robbing Mongolia of 
its treasures.  Did she realize that Jargalsaikhan was perhaps 
guilty of attempting to peddle mineral rights and other goodies to 
the same Russian and Chinese malefactors that he so virulently 
criticized?  Yes, she did know and believe these charges against the 
man; but, even so, that did not make his attacks less right or less 
entertaining to hear.  As with fellow populist Gundalai, however, 
Jargalsaikhan's exit from the Cabinet does not mean they have left 
the Mongolian political scene -- just that they have been freed from 
whatever minimal discipline either adhered to as members of the 
government. 
 
Minton