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Sluggish Economy Casts Shadow Over Mongolian Elections

Mongolian President Tsakhiagiin Elbegdorj (L) and his wife Bolormaa Khajidsuren attend voting for the parliamentary elections at a polling station in Ulaanbaatar, Mongolia, June 29, 2016.

Mongolians voted in parliamentary elections Wednesday against the background of a sharp downturn in the landlocked nation's crucial mining sector.

Rising unemployment and disillusionment with the political system are also factors weighing on the vote for the 76 members of the national parliament, the State Great Khural. The result could see the ruling Democratic Party lose its majority to the opposition Mongolian People's Party, a year ahead of the 2017 presidential election.

President Elbegdorj Tsakhia urged Mongolians to participate in the lively democratic system that remains a rarity in a region characterized by one-party states and authoritarian leaders.

“I encourage young people to come to the polling stations to exercise their right to vote. This is what democracy is all about,” Elbegdorj said after casting his ballot in the Sukhbaatar district of the capital Ulaanbaatar.

Official results were not expected until Thursday morning, reflecting the vast distances and poor communications in the nation of just 3 million sandwiched between China and Russia.

The parliamentary elections are the seventh since the country made a peaceful transition to democracy in 1990. Yet disillusionment with the political process in the country - recently dubbed “an oasis of democracy” by U.S. Secretary of State John Kerry - is growing among younger voters, whose turnout has steadily declined in recent years.

Sodnomtseren Choinzon, chairman of the General Election Commission of Mongolia, said 498 candidates were running for parliament and 2,288 candidates for local councils. More than 400 observers from foreign countries and non-governmental organizations were on hand to oversee the polls.

Mongolia's mining- and animal herding-dependent economy has been dragged down by weak domestic demand and a sharp decline in exports, impoverishing thousands of former herders who had moved to its few cities looking for jobs.

Economic growth has slipped from 17.5 percent in 2011 to just 2.3 percent last year, leaving one-fifth of the population in poverty. Billions of dollars in foreign loans begin coming due next year, posing another potential crisis.

Coal, copper and other mineral resources make up 94 percent of Mongolia's exports. But with demand in key market China weakening as its economy cools, Mongolia's own growth is forecast to fall below 1 percent this year.

While both main parties have campaigned on the promise of more jobs, it's unclear what measures are available to stimulate the flagging economy.

“The main issue is, No. 1, to revive the economy,” said Bulgantuya Khurelbaatar, secretary of the opposition Mongolian People's Party. She said the party aims to build 100 factories in 21 provinces that would create about 40,000 jobs, though she didn't say how.

With the decline in resource prices, foreign investment has slowed to a trickle, although mining giant Rio Tinto in May announced the launch of the next stage of a multibillion-dollar gold and copper mine.

Still, critics of government agreements with mining companies complain that too little of Mongolia's mineral wealth benefits the general public.

Some observers see recent changes to the electoral process as handicapping smaller parties and female candidates.

“They have closed some space for smaller political parties, as majoritarian systems do tend to benefit two main political parties,” said Ashleigh Whelan, country director for the International Republican Institute, a U.S.-based group that aims to promote democracy.

“This can reduce the opportunity for lesser-known candidates, new candidates, youth, women and those candidates who may not be a guarantee in terms of winning,” Whelan said. Her organization does not expect either party to secure an overwhelming majority.

In its latest National Human Development Report, the United Nations Development Program found that about only 45 percent of Mongolians aged 18-34 have voted in recent elections, compared to an overall turnout of 65 percent in 2012.

Skepticism grew after the ruling party recently offered citizens 300,000 tugriks ($155) each to buy back 30 percent of their promised shares in the state-owned coal mine, Erdenes Tavan Tolgoi. So far 1.2 million of 1.65 million shareholders have applied to sell their shares to the government.