Parliamentary elections are being held, and it is feared that the current fragmentation of the majority may persist. But the country is facing an inflation rate of 15.1% and high unemployment, and must decide on the use of immense mineral resources, sought after by neighbouring companies and powers.

Ulaan Baatar (AsiaNews/Agencies) - Voting is being held tomorrow for Mongolia's parliament, but also to select its future in a way that may be decisive.  The two main groups - the Democratic Party, and the Mongolian People's Revolutionary Party, heir of those who led the country when it was a Soviet satellite, which is in government now and is favoured in tomorrow's election - are both confident that they will receive a large enough majority to govern without forming a coalition.

But 13 other minor parties are participating in the competition, and a more representative elective system is being applied, which could lead to a repetition of the instability that followed the elections in 2004, with the votes of small groups being decisive.  The new government will need to face strong inflation and negotiate with foreign companies that are anxious to exploit the country's extensive mineral resources, after the three prime ministers at the head of the previous legislature were unable to ratify important mineral rights agreements.

The economy grew by 9.9% in 2007, and by 7.5% in 2006 (mainly because of the rise in mineral prices), but in 2007 inflation was at 15.1%.  The country is sandwiched between Russia and China, and depends on Moscow for natural gas and petroleum and its derivatives, and on both countries for grain, staple foods, and various products.  Even though trade and relations with the United States, Japan, and other countries are increasing.  The risk is that uncontrolled price rises and inflation could foster a move to authoritarian rule, possibly by again making the country a satellite of a neighbouring power.  Drought and a very cold and snowy winter have decimated crops and impoverished thousands of families.

But it is an immense country, with only 3 million people, half of whom still live as nomads on the steppes.  The population is also young, with two thirds under the age of 30 and about 30% under the age of 14.  It is rich in minerals: copper, gold, coal, iron, tin, zinc, molybdenum, uranium, and others.  The new government will need to decide on and ratify agreements, like for the copper and gold deposits of Oyu Tolgoi in the Gobi desert, which alone are expected to increase the gross domestic product by 34%. (PB)

• Mongolia
• parliamentary
• elections
• commodities
• inflation
• unemployment
• Russia
• China