Mongolian Prime Minister Altankhuyag Norov lost a no-confidence vote over his handling of the economy and will step down along with the rest of his cabinet.
Thirty-six lawmakers in the 76-seat Great Hural voted for the motion yesterday, with 30 against. Deputy Prime Minister Terbishdagva Dendev will serve as acting prime minister until the ruling Democratic Party can find a replacement.
Altankhuyag has faced mounting pressure from the public and lawmakers in both parties as economic growth slumped from a world-beating 17.5 percent in 2011.
Foreign investment has plummeted amid a protracted dispute between the government and Rio Tinto (RIO) Group over the financing for an expansion of the Oyu Tolgoi copper and gold mine.
“During Altankhuyag’s tenure the economic situation has significantly worsened, but to say that this is a uniquely Mongolian problem would be untrue.” said Chris MacDougall, managing director of Mongolia Investment Banking Group LLC.
“Like many resource economies Mongolia has suffered due to an array of underlying issues. Not the least of which has included decreasing commodities prices and a sell off of frontier market exposure by international investors.”
Growth slipped to an annualized 5.3 percent in the first half of this year from 11.7 percent last year.
Foreign investment fell to $647.5 million in the nine months through September from $3.82 billion in the same period in 2012.
The World Bank last month cut Mongolia’s growth forecast for this year to 6.3 percent from the 9.5 percent projected in July. The vote will “cast further nervousness among investors,” said Munkhdul Badral, head of market intelligence firm Cover Mongolia.
The Democrats won parliamentary elections in June 2012 on pledges to crack down on corruption, improve infrastructure and devolve greater spending powers to local communities.
The resource-rich economy has been hurt by falling commodity prices, a rift with Rio Tinto over the world’s third-largest copper mine, and an inflation rate of 13 percent, well above the central bank’s target of 8 percent.
bloomberg.com
Thirty-six lawmakers in the 76-seat Great Hural voted for the motion yesterday, with 30 against. Deputy Prime Minister Terbishdagva Dendev will serve as acting prime minister until the ruling Democratic Party can find a replacement.
Altankhuyag has faced mounting pressure from the public and lawmakers in both parties as economic growth slumped from a world-beating 17.5 percent in 2011.
Foreign investment has plummeted amid a protracted dispute between the government and Rio Tinto (RIO) Group over the financing for an expansion of the Oyu Tolgoi copper and gold mine.
“During Altankhuyag’s tenure the economic situation has significantly worsened, but to say that this is a uniquely Mongolian problem would be untrue.” said Chris MacDougall, managing director of Mongolia Investment Banking Group LLC.
“Like many resource economies Mongolia has suffered due to an array of underlying issues. Not the least of which has included decreasing commodities prices and a sell off of frontier market exposure by international investors.”
Growth slipped to an annualized 5.3 percent in the first half of this year from 11.7 percent last year.
Foreign investment fell to $647.5 million in the nine months through September from $3.82 billion in the same period in 2012.
The World Bank last month cut Mongolia’s growth forecast for this year to 6.3 percent from the 9.5 percent projected in July. The vote will “cast further nervousness among investors,” said Munkhdul Badral, head of market intelligence firm Cover Mongolia.
The Democrats won parliamentary elections in June 2012 on pledges to crack down on corruption, improve infrastructure and devolve greater spending powers to local communities.
The resource-rich economy has been hurt by falling commodity prices, a rift with Rio Tinto over the world’s third-largest copper mine, and an inflation rate of 13 percent, well above the central bank’s target of 8 percent.
bloomberg.com
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