ULAN BATOR - A Mongolian court has jailed former president Nambaryn Enkhbayar for four years for corruption, a move that could threaten the government's fragile coalition and increase uncertainties for foreign investors.
Resource-rich Mongolia is in the middle of a mining boom
that is set to transform its tiny economy, but political
uncertainties have threatened to overshadow its efforts to
attract the foreign investment needed to develop mines and build
vital infrastructure.
After a three-day trial, Enkhbayar was found guilty of
charges that include the illegal privatisation of a hotel and
newspaper and the misuse of donated television equipment to
broadcast from his own television station, the government said
late on Thursday.
The young nation held its parliamentary elections in July
and the ruling Democratic Party, which won just 31 out of 76
seats, was forced to form a coalition with Justice Coalition,
which is led by Enkhbayar’s Mongolian People’s Revolutionary
Party (MPRP).
Although Enkhbayar was barred from taking part in the
elections, he remains as the chairman of the MPRP, which won the
third-largest block of seats in parliament.
“The Democratic party needs the Justice Coalition …
without them, it doesn’t work and the partnership may now fall
apart,” said Luvsandendev Sumati, director of the Sant Maral
Foundation, a polling agency.
The election results last month has already left more than a
quarter of the parliament in the hands of politicians who
advocate local control of mines. Investors said the latest
episode could worsen the political gridlock and increase
uncertainty for foreign investors.
Key decisions pending for major mining projects, such as the
development of the massive Tavan Tolgoi coal mine, may also be
delayed.
Enkhbayar, who served as president of the landlocked central
Asian country from 2005 to 2009, has called for the $13 billion
Oyu Tolgoi copper and gold mine project with Ivanhoe Mines
to be renegotiated to grant better terms to the
government, and also wants to keep the coveted Tavan Tolgoi coal
mine, potentially one of the world’s biggest coal suppliers, in
local hands.
Rio Tinto has a majority stake in Ivanhoe
and has full operational control over the Oyu Tolgoi mine, which
is due to start production this year.
The court also ordered Enkhbayar to pay more than 54 million
tugriks ($40,000) in damages.
Enkhbayar has called the charges groundless and politically
motivated, according to local media reports. His lawyers said he
will appeal against the sentence.
