STRAYED TRANSITION

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In democracies, ruling power is transferred to political parties through elections. If the winning political party starts providing unfair and unequal services to society, the development of the country becomes delayed by multiple years, with a crippled economy, people living in poverty, and a few elites who keep getting wealthier. It happens regardless of whether the country has a rich history, long-lasting culture, or natural resources. Some  examples are Zimbabwe in Africa, Venezuela in South America, and Mongolia in  Asia.

MUGABE WILL BECOME PRESIDENT AGAIN

Robert Mugabe, the President of Zimbabwe, is 93 years old and has been serving as the head of state since 1980. His political party, the Zimbabwe African National Union–Patriotic Front (ZANU–PF), announced last week that they are nominating Mugabe for the 2018 presidential elections again. The leader of Zanu-PF’s youth wing even called for making Mugabe president for life. Grace Mugabe, the first lady of Zimbabwe, serves as the head of Zanu PF’s Women’s League and is a member of Zanu PF’s politburo. She is the second-most influential person in Zimbabwe, second only to her husband.

As Zimbabwe’s political institutions (parliament, government, and its judiciary branch) serve the politburo and its associated businesses only, their national economy has basically gone bankrupt.

Zimbabwe’s GDP per capita has fallen twofold since 1980, when the country declared its independence. Furthermore, basic public services have stopped. Zimbabwe had a cholera outbreak in 2010, which resulted in 4,300 deaths and almost 100,000 infections. The unemployment rate has reached 94 percent. Also, due to hyperinflation, people had to pay a 100 trillion Zimbabwean dollar note to get on a bus in 2009. Mugabe suppressed public protests, shedding blood and putting those who had different political views behind bars, and he assumed full control over the media.

Zimbabwe has the lowest global life expectancy, 34 for women and 37 for men. One-third of their population has fled the country. President Mugabe celebrated his birthday last year with a 92 kilogram cake, spending one million USD. He puts the blame for the economic crisis on foreigners and sanctions imposed by Western countries.

VENEZUELANS ARE STARVING

All stores are empty across Venezuela today, just like how it was in Mongolia in 1990. Venezuela is now using an ID card system for food purchases, imposing restrictions on when people can buy food. It is basically the same as restrictions on vehicle license plate numbers on weekdays in Ulaanbaatar. Venezuelans are queuing at stores starting at 3 o’clock in the morning, and can end up without being able to purchase anything. The flour they buy can be sold for a one hundred percent mark-up on the black market.

Last week, the BBC referenced a survey completed in Caracas, the capital of Venezuela, which said that eight percent of its population was surviving on leftover food from others. The people of the country that leads the world in oil reserves are starving.

Since their democratic revolution in 1956, Venezuela has not managed to have a truly multi-party political system. Only a few political parties take turns ruling the country, and the economic institutions serve only them. It has led to the majority of people living in poverty and only a small group getting wealthier. The people who said that they needed one strong leader rather than many political parties elected Hugo Chavez as their president in 1998. At the time, Hugo Chavez was a 44-year-old military officer. After becoming president, he centralized all businesses under the government and set all prices. Following a hike in oil prices, the government’s revenue increased. Using the income, they made advances in health and education services, and reduced poverty.

However, when oil prices declined soon after, the state-owned enterprises that were living on government subsidies went bankrupt. The private sector, which lost its competitiveness, could not be revived. As a result, their economy entered into a huge struggle and faced a shortage of consumer products.

After Hugo Chavez died of cancer in 2013, Venezuela went into a full political and economic crisis. President Maduro declared a state of economic emergency and centralized everything under the government. Nevertheless, people are still starving while crime rates soar. President Maduro believes that the current crisis was caused by the United States of America and other imperialists.

MONGOLIA’S CASH POLITICAL PARTIES

Mongolia replaced its socialist system with a democracy and a free market in 1990. During the transition, there have been many political parties that have formed and disbanded. Today, we only have two major parties, the Democratic Party (DP) and the Mongolian People’s Party (MPP), who are taking turns. However, these two political parties have become extractive institutions that protect only the interests of their leaders and associated non-transparent businesses.

As these non-transparent businesses are now able to spend public funds and state loan financing, we are seeing less efficiency from public investments, witnessing our business environment deteriorate, and watching investment decline. For example, approximately 140 billion MNT has been spent in the last six years on dozens of projects to fight air pollution. But, the current reality is that air pollution levels are so high that they are posing real risks to human health. Although some of the culprits who embezzled public funds from those projects were arrested, they were soon after  exonerated despite the public’s concerns. This tendency is often seen in corruption cases.

Our government is raising foreign funds through bonds, without any specific plans. B.Choijilsuren, the Minister of Finance, recently announced that Mongolia has to pay 6.6 trillion MNT for principal and interest payments on bonds in 2017, while the government expects state revenue in 2017 to be 5.9 trillion MNT. The payments Mongolia needs to make in 2018 will also exceed state revenue. The business groups who are closely associated with political parties and received bond financing do not care about the state’s upcoming debt obligations.

Mongolia’s political institutions have changed our economic institutions to make them fit their interests and needs, and are using them as their puppets.

As a consequence, our economy is in crisis, and it has become more difficult for businesses that do not have any links to political institutions to continue their operations – let alone improve competitiveness. They are now more interested in entering politics or freezing their operations and going abroad. Media outlet, who are supposed to be informing the public about these things, are now 75 percent controlled by politicians.

The DP has commenced elections to choose their next party leader. However, they have nominated five people based on how much money they have, rather than what work they have done and ideologies they follow. The DP is selecting its members on the basis of whether or not they have paid their dues and acquired party membership. Only 10 percent of their 180,000 members will be voting in the election for party chair.

An inclusive political institution must put its principles above wealth, and have their financing transparent. Furthermore, all members are supposed to be fully aware of where the political party aims to go, and how it intends to achieve its goals. Also, there must be a true leader who does what he says and is free of conflicts of interest. It is still doubtful whether or not the DP can become such an institution.

Extractive institutions that provide unfair and unequal services cannot offer people opportunities to invest, save, or take initiative. It leads to economic decline on a regular basis.

Please visit D.Jargalsaikhan’s website at www.jargaldefacto.com.

 

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