DOMESTIC POLITICS: In mid-April Mr Enkhbayar-currently leader of an opposition party, the Mongolian People's Revolutionary Party (MPRP), formed in early 2011 by a faction that split off from the ruling Mongolian People's Party which was formerly known as the MPRP-was arrested on charges of corruption. According to the country's Independent Agency Against Corruption (IAAC), the case against Mr Enkhbayar, who was president from 2005 to 2009, centres on the allegedly illegal privatisation of a state-owned hotel, as well as on his supposed repeated refusal to appear before the IAAC. Mr Enkhbayar's arrest came just hours after he released a classified document from the National Security Council highlighting events surrounding the contested 2008 general election and its violent aftermath, and this has fuelled widespread suspicion that the arrest was politically motivated-particularly given that Mr Enkhbayar had been planning to contest a parliamentary seat in the general election due in June this year. The government has refused the MPRP's request for Mr Enkhbayar to be released on bail. Mongolia and Japan agreed in March to start negotiations towards a possible FTA. The announcement came during a visit by the Mongolian prime minister, Sukhbaatar Batbold, to Japan to celebrate the 40th anniversary of the establishment of diplomatic ties between the two countries. During Mr Batbold's visit an agreement was signed with the Japanese prime minister, Yoshihiko Noda, with the two leaders pledging to promote development of natural resources and infrastructure. Japan also promised to extend a low-interest loan worth US$19m to Mongolia to help to develop the country's healthcare system.

Source: Mongolia: Country outlook