ULAN BATOR (Reuters) – Norov Altanhuyag of the Democratic Party (DP) was confirmed as Mongolia’s new prime minister on Friday, ending weeks of political uncertainty after the party failed to win enough seats in a June election to form a government on its own.
The transfer of power from the former ruling Mongolian People’s Party (MPP), which is in favor of nationalizing resources, raised hopes of a friendlier investment climate and a tougher stance on graft, especially after last week’s conviction of MPP leader Nambar Enkhbayar for corruption.
In a note to clients, private equity firm Origo Partners called Altanhuyag’s confirmation as the country’s 27th prime minister “a positive development”, adding it viewed Enkhbayar’s conviction “a landmark event” for stronger anti-corruption regulatory enforcement.
The DP’s moderate stance will be a departure from the MPP, which had demanded to renegotiate mining contracts with a view to limiting foreign ownership of the country’s mineral wealth.
One of the targets was the massive Oyu Tolgoi copper and gold project, which is set to start production later this year and is 66 percent owned by Rio Tinto and Turquoise Hill Resources, with the remaining stake held by the Mongolian government.
“The newly established government will welcome foreign investment, we will guarantee them a stable legal environment we will try to fulfil our party agenda,” MP Chimed Saikhanbileg told Reuters in a telephone interview.
The DP won 31 of the 76 seats in the June 28 vote, forcing it into a coalition with four smaller parties, including the MPP which is the second largest party in the new lineup. DP members are expected to comprise 75 percent of the new cabinet.
Mongolia is gripped by a mining boom that is set to transform its tiny economy, but political uncertainties have threatened to overshadow efforts to attract foreign investment needed to develop mines and build essential infrastructure.
The MPP was previously known as the Mongolian People’s Revolutionary Party (MPRP).