Mongolia | PM asks voters to text a choice: Austerity or investment

Prime Minister Sai­khanbileg Chimed wants a text message from Mongolia’s 3 million citizens about how to rescue the economy.
Two months after winning office, Saikhanbileg, 46, took to national television on Wednesday to tell viewers they have a choice. He explained the economy is slumping along with foreign investment, so they have to decide if belt-tightening is the way forward or should the country invest its way out of trouble?
The prime minister – a weight lifter who bench-presses 175 kilograms – invited citizens to send text messages over four days starting Saturday on what they prefer to do. Choice A: Forge ahead with multibillion dollar mining projects. Choice B: Cut spending and scale back.
“The two choices cut to the chase, prosperity or austerity? Citizens globally rarely, if ever, choose austerity,” Nick Cousyn, chief operating officer for BDSec, Mongolia’s largest brokerage, said by e-mail.
Mongolia’s economy, which is dependent on mineral exports such as copper and coal, slowed from a record 17.5 percent in 2011 to around 7 percent last year.
Much of the slowdown is due to a collapse in investment, highlighted by a dispute with Rio Tinto Group, the country’s biggest foreign investor, over financing for the USD6.6 billion Oyu Tolgoi mine, one of the world’s largest copper and gold deposits. The currency, the tugrik, has fallen 42 percent against the dollar over the past three years.
Saikhanbileg’s approach of democracy-by-text-message is an attempt to end an impasse in the country that has pitted politicians who claim foreigners are pillaging the nation’s mineral wealth against those who say overseas investment is needed for growth.
“The Mongolian people need to decide whether they want foreign direct investment or not,” said Dale Choi, head of Independent Mongolian Metals & Mining Research.
The Prime Minister is acknowledging he needs the public mandate to break the current stalemate, which is caused by a large group of decision makers, Choi said.
“I give him credit for going to the public because the one thing that all these people will listen to is the public opinion.”
Cousyn called the move “unconventional” while adding that it is an “excellent way to bring closure to the process.”
The dispute between the government and Rio Tinto has dragged on for two years as the two sides bicker over terms of a $4.2 billion project finance package to fund the underground development of the mine.
“This is a democratic way to remove the political liabilities associated with the controversy of large projects like OT,” said Cousyn. Michael Kohn, Bloomberg