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Politics

IMF deal at root of Mongolian PM ousting

Agreeing to raise retirement age, cut child care eroded public support

Jargaltulga Erdenebat, then prime minister of Mongolia, at the St. Petersburg International Economic Forum in Russia on June 1.   © Pool/Reuters

BEIJING -- Mongolia's parliament voted Thursday to remove Prime Minister Jargaltulga Erdenebat from office, citing his lack of competence to run the government. The move was initiated and supported by his own ruling party.

At the root of the ousting was an agreement Erdenebat made with the International Monetary Fund earlier this year in return for a $5.5 billion funding package. Although the deal was initially supported by his fellow party members, the party's defeat in July's presidential election spooked many in the ruling Mongolian People's Party.

Thursday's no-confidence motion was opened by an influential member of the People's Party, which occupies 65 of the 76 seats in the parliament. The motion drew support from about half of the party's legislators. It passed with the backing of a majority of lawmakers from the largest opposition Democratic Party.

The move came against the backdrop of internal strife within the ruling party, according to local media reports. February's agreement with the IMF included reducing spending by raising the official retirement age and cutting child care support as conditions to maintaining financial backing from the organization.

This unpopular concession eroded public support of his cabinet. Moreover, the July election of Democratic President Khaltmaa Battulga over ruling-party contender Miyegombo Enkhbold -- the parliament chairman and the ruling party leader who has been the main backer of Erdenebat -- has created an atmosphere conducive to skepticism about the prime minister's competence as a leader.

Mongolia had seen double-digit growth during 2011-2013 as foreign investors rushed to take a stake in the country's vast untapped mineral wealth. But a drop in commodity demand slowed growth to 1% last year and pushed the country into an economic crisis.

A new prime minister will be nominated by the parliament, but the Erdenebat cabinet will continue to serve in an acting capacity for the time being. With the Mongolian economy still dependent on resource exports, heeding the demands by the IMF while also maintaining public support will be a tough balancing act for any incoming prime minister.

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