Such are the vagaries of capitalism in the land of Genghis Khan. In his day the Mongol Empire stretched from the China Sea to the Caspian Sea; today Mongolia is squeezed between a floundering Russia and a traditionally hostile China. Under Soviet pressure, Mongolia became the first Asian country to go communist, in 1921–and in 1990, the first Asian communist land to embrace popular rule. “For us, communism was like wearing tropical clothes in an arctic climate,” President Punsalmaagiyn Ochirbat told NEWSWEEK. But the country’s transition to political and economic freedom is in danger. The disintegration of the Soviet Union cost Mongolia its largest trading partner. For 70 years, Moscow supplied all commodities-from flour and sugar to oil and medicines-and underwrote budget deficits as high as 25 percent of GNP. But Russia has since imposed import and export tariffs and cut off aid and spare parts. The result: a 33 percent drop in Mongolians’ real income. “The harsh reality has set in,” says Burenbayar, editor of the Mongol Messenger, a new English-language weekly. “We have to work to survive, and Mongolia has never had to work for anything.”
Electoral politics came precipitously to Mongolia: protests in late 1989 led to the first free ballot only seven months later. Cheering crowds removed the towering statue of Stalin from the plaza in front of the national library in Ulan Bator. But totalitarian habits have proved more enduring. The government is a patchwork of old-line Communists and opposition leaders who wrangle constantly about how far to push market economics. Elections slated for this summer aren’t likely to settle the question.
Western aid has helped–but not nearly enough. After the first stirrings of democracy, the World Bank and a dozen countries devised a $200 million aid package. They assumed, however, continued Soviet largesse and a smooth weaning of the economy from central planning. Privatization is, in fact, proceeding: 60 percent of Mongolia’s livestock and 90 percent of the capital’s small stores are now in private hands. But the transfer of 340 state companies is just beginning, food is still subsidized and commodity prices are left to local authorities-party holdovers who view liberalization as political suicide. And the intricacies of capitalism elude even eager participants: N. Zhargalsaikan, the central-bank chairman and brother of the stock-exchange chief, allegedly lost some $82 million playing the foreign-exchange markets-and kept his job. When International Monetary Fund and World Bank officials recently visited Ulan Bator, the government presented them with a $450 million “critical items” list that included men’s trouser buttons and yeast. “It looks like they just want the West to pick up where Moscow left off, “sighs an aid official.
Moscow stopped shipping oil in December-in the middle of Mongolia’s six-month winter. Without fuel, the country can’t run its cement plants, steel and flour mills, clothing factories and copper refineries. Without products to export, Mongolia can’t generate hard currency to buy petroleum or work off its $6 billion foreign debt. Oil shortages have closed down most public transportation and forced hospitals to curtail services. This week Mongolian Prime Minister Byambasuren will visit Moscow to ask President Boris Yeltsin to resume fuel shipments.
Sooner or later, Mongolia will have to learn self-reliance. The ingredients are there: a young population with a 98 percent literacy rate. Entrepreneurship is catching on. A former schoolteacher traded Russian lumber to China and allegedly illegally sold oil obtained from Russian dealers to Mongolian state companies. This enabled him to buy 3,000 stock-market vouchers below the official price. He then exchanged the vouchers for a run-down hotel complex, which he plans to refurbish. Most schemes are more modest. “We have our brains and our hands,” says 32-year-old Delgernyam, who just bought a government supply store. “We have to make [the transition] work.” After decades of kowtowing to the Soviets, that’s a refreshing call to action.
title: “Wall Street Of The Steppes” ShowToc: true date: “2022-12-30” author: “Velma Clemens”
Such are the vagaries of capitalism in the land of Genghis Khan. In his day the Mongol Empire stretched from the China Sea to the Caspian Sea; today Mongolia is squeezed between a floundering Russia and a traditionally hostile China. Under Soviet pressure, Mongolia became the first Asian country to go communist, in 1921–and in 1990, the first Asian communist land to embrace popular rule. “For us, communism was like wearing tropical clothes in an arctic climate,” President Punsalmaagiyn Ochirbat told NEWSWEEK. But the country’s transition to political and economic freedom is in danger. The disintegration of the Soviet Union cost Mongolia its largest trading partner. For 70 years, Moscow supplied all commodities-from flour and sugar to oil and medicines-and underwrote budget deficits as high as 25 percent of GNP. But Russia has since imposed import and export tariffs and cut off aid and spare parts. The result: a 33 percent drop in Mongolians’ real income. “The harsh reality has set in,” says Burenbayar, editor of the Mongol Messenger, a new English-language weekly. “We have to work to survive, and Mongolia has never had to work for anything.”
Electoral politics came precipitously to Mongolia: protests in late 1989 led to the first free ballot only seven months later. Cheering crowds removed the towering statue of Stalin from the plaza in front of the national library in Ulan Bator. But totalitarian habits have proved more enduring. The government is a patchwork of old-line Communists and opposition leaders who wrangle constantly about how far to push market economics. Elections slated for this summer aren’t likely to settle the question.
Western aid has helped–but not nearly enough. After the first stirrings of democracy, the World Bank and a dozen countries devised a $200 million aid package. They assumed, however, continued Soviet largesse and a smooth weaning of the economy from central planning. Privatization is, in fact, proceeding: 60 percent of Mongolia’s livestock and 90 percent of the capital’s small stores are now in private hands. But the transfer of 340 state companies is just beginning, food is still subsidized and commodity prices are left to local authorities-party holdovers who view liberalization as political suicide. And the intricacies of capitalism elude even eager participants: N. Zhargalsaikan, the central-bank chairman and brother of the stock-exchange chief, allegedly lost some $82 million playing the foreign-exchange markets-and kept his job. When International Monetary Fund and World Bank officials recently visited Ulan Bator, the government presented them with a $450 million “critical items” list that included men’s trouser buttons and yeast. “It looks like they just want the West to pick up where Moscow left off, “sighs an aid official.
Moscow stopped shipping oil in December-in the middle of Mongolia’s six-month winter. Without fuel, the country can’t run its cement plants, steel and flour mills, clothing factories and copper refineries. Without products to export, Mongolia can’t generate hard currency to buy petroleum or work off its $6 billion foreign debt. Oil shortages have closed down most public transportation and forced hospitals to curtail services. This week Mongolian Prime Minister Byambasuren will visit Moscow to ask President Boris Yeltsin to resume fuel shipments.
Sooner or later, Mongolia will have to learn self-reliance. The ingredients are there: a young population with a 98 percent literacy rate. Entrepreneurship is catching on. A former schoolteacher traded Russian lumber to China and allegedly illegally sold oil obtained from Russian dealers to Mongolian state companies. This enabled him to buy 3,000 stock-market vouchers below the official price. He then exchanged the vouchers for a run-down hotel complex, which he plans to refurbish. Most schemes are more modest. “We have our brains and our hands,” says 32-year-old Delgernyam, who just bought a government supply store. “We have to make [the transition] work.” After decades of kowtowing to the Soviets, that’s a refreshing call to action.
