Mongolia names new PM, putting IMF package back on track - Metro US

Mongolia names new PM, putting IMF package back on track

By Terrence Edwards

ULAANBAATAR (Reuters) – Mongolia’s parliament confirmed the nomination of motorbike enthusiast Ukhnaa Khurelsukh as prime minister on Wednesday, putting the country back on track to receive funds from a $5.5 billion IMF economic rescue package.

Khurelsukh, of the ruling Mongolian People’s Party (MPP), received unanimous approval from the lawmakers in attendance for his confirmation as Mongolia’s 30th prime minister.

He will face challenges in bringing back foreign investment to the mineral-rich former Soviet satellite and manage the country’s heavy debt load.

The International Monetary Fund has approved an economic bailout program to help relieve debt pressures and buoy the currency, the tugrik, that includes austerity policies.

An IMF visit to review the program that included the disbursement of $37.82 million of the funds was delayed in September until a new government was formed.

The IMF had said that once a new government was in place, it would engage with the authorities on how best to move forward with the program.

Khurelsukh succeeds Jargaltulga Erdenebat, who was voted out of office in September amid allegations of corruption and incompetence.

The new prime minister holds the title of colonel, although he only served in the military from 1989 to 1990.

“He projects a tough rule of law image,” said Dale Choi, head of Altan Bumba Financial Group. “He’s a very tough and strong guy himself. I think the electorate likes it very much.”

Khurelsukh, 49. is seen as a leader to the party’s so-called “youth faction” and is also a noted motorcycle enthusiast. He is president of the fan club for Harley-Davidson in Ulaanbaatar.

Mongolia’s democracy has been turbulent since its transition from a socialist state in 1990, and no premier has completed a four-year term since 2000.

Government infighting and reshuffles have contributed to the delays of development projects.

The closest Mongolia came to handing over the operations of state-owned Erdenes Tavan Tolgoi coking coal mine to a consortium of Mongolian Mining Corp, China Shenhua Energy and Sumitomo Corp was in 2015, before the parliament speaker stepped in to block the deal.

“We would hope to see the new government advance the privatization of Tavan Tolgoi,” said Thomas Hugger CEO and a fund manager at Asia Frontier Capital.

Mongolia’s coal miners are looking to ramp up production to meet growing demand from China, but longstanding transportation issues continues to hold back sales.

Mongolia’s proximity to China means it could play a large role in coal supply to China, said Hugger, if a key railway is built.

“There’s no reason Mongolia shouldn’t be the largest supplier of coking and thermal coal to China.”

(Reporting by Terrence Edwards; Writing by Ryan Woo; Editing by Nick Macfie)

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