With the changes taking place internationally in the Communist world, in particular in the Soviet Union, which had sheltered and led Mongolia; Mongolia suffered severe economic hardships from as early as the 1980s. By the end of the decade, ration cards for food were being issued and stores' shelves were depleted. A thriving black market arose in Ulaanbaatar by 1988 to accommodate the needs of the populace.
In October 1989, New Generation, an underground resistance movement was formed. On the 9th of December, people from New Generation met with students, journalists and others to set up an open organization calling for drastic reform. The group called itself the Mongolian Democratic Association . The following day, MDU founders publicly petitioned the government for a real implementation of perestroika, including allowing for a multi-party system, the total implementation of the Universal Declaration of Human Rights in all party and government affairs. On the second of January of the following year, the MDA began distributing leaflets calling for a democratic revolution. When the government did not comply with this and later, more aggressive demands, demonstrations occurred.
On the 4th of March, 1990, MDA and three other reform organizations held a joint outdoor mass meeting, inviting the government to attend. The government sent no representative to what became a demonstration of over 100,000 people demanding democratic change. Ten members of the organizations began a hunger strike on the 7th of March the next day, negotiations between the government and the democratic opposition began. On the 9th, the ruling party accepted some of the hunger strikers' demands. On the 11th, the Mongolian National Progressive Party was founded. In April, the conflict worsened, with the government restricting the freedom of assembly and the opposition submitting an ultimatum demanding equal participation of all political groups. The Communist party refused to accede to the demands.
However, in May, under pressure from hunger strikers and after negotiations with members of the opposition movement, the People's Great Hural approved the Law on Political Parties. On July 29, free general elections were held.,
Following the collapse of the Communist regime, Mongolia's first free, multi-party elections for a bicameral parliament were held on July 29, 1990. The Mongolian People's Revolutionary Party MPRP won 85% of the seats. The State Great Khural (upper house) first met on September 3 and elected a president (MPRP), vice president (Social Democrat), prime minister (MPRP), and 50 members to the Baga Khural (lower house). The vice president was also chairman of the Baga Khural. In November 1991, the People's Great Khural began discussion on a new constitution, which entered into force February 12. In addition to establishing Mongolia as an independent, sovereign republic and guaranteeing a number of rights and freedoms, the new constitution restructured the legislative branch of government, creating a unicameral legislature, the State Great Khural (SGKh).
The constitution was amended in 1992. In the same year, the MPRP won another round of parliamentary elections. The new constitution also provided that the president would be elected by popular vote rather than by the legislature as before. Incumbent Punsalmaagiyn Ochirbat became Mongolia's first universally elected president in 1993. Originally an MPRP member, he ran as the candidate of the democratic opposition, after the MPRP had nominated an orthodox communist as their candidate.
The early and mid-1990s were marked by heavy economic shocks. Foreign trade broke down, economic and technical aid from the former socialist countries ended, and domestic economy was struggling with privatization. Inflation rose, and for some time certain foodstuffs had to be rationed.
The MPRP lost the majority the State Ikh Khural to a coalition of opposition parties in the 1996 elections. However, the governments in headed by the former opposition parties proved unstable, and the election period saw four different prime ministers.
MPRP candidate Natsagiin Bagabandi became elected as president in 1997, and re-elected in 2001. The 2000 parliamentary elections also returned the MPRP to power in the State Ikh Khural. Wide dissatisfaction with economic conditions and perceived corruption under the previous government had led to the MPRP's taking of all but four seats in the Great Khural.
Results of the 2004 election forced the MPRP to join a coalition government with the Motherland Democratic Coalition, a coalition of the Democratic Party (Mongolia), the Civic Will Party, and the Motherland Party. The MPRP left the coalition in January 2006, however, and proceeded to create a government on its own. Another government reshuffle took place at the end of 2007, when the MPRP decided to replace prime minister Miyeegombyn Enkhbold with Sanjaagiin Bayar.
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