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GHENGIS KHAN and joint venture are the current catch phrases in the
Mongolian People’s Republic. Disenchanted with 70 years of Soviet-style
socialism, the nation that once ruled from Central Turkey to the Korean
peninsula now looks to cultural revival and free enterprise to drive a Mongolian
renaissance in the next century.

The optimism springs from a change in ideology within the Mongolian
People’s Revolutionary Party, which has ruled the country since the revolution
of 1921. Mongolia has opened its doors to foreign investors and lifted its
ban on private ownership. Stalin’s statue no longer stands in front of the
national library. The most popular candidate to replace him is Ghengis Khan,
once again a national hero despite years of being labelled a murderer and
thief. Even Lenin has fallen from favour. A large image which had stood
for years atop the National Folk Theatre in the capital city of Ulan Bator
disappeared quietly in May, unnoticed and without comment.

As Mongolians reject communist ideology, they are beginning to reject
the culture that spawned it, too. Namsrain Sodnom, President of the Academy
of Sciences, said: ‘We tried to join Europe. For 50 or 60 years we tried
to imitate that culture. Now we’ve awoken from the sleep. Now we know what
we’ve lost and remember we’re Asian.’

In Sodnom’s view, imitating the Soviet Union’s science policy nearly
ruined Mongolia. The agricultural techniques taught at colleges and universities
were inappropriate for a country made up largely of semi-nomadic herders.
‘Our students would spend a third of their classroom time on politics. The
other two-thirds on theory and practice were not fitted to the ‘Mongolian
soil’. The textbooks our students studied were suitable for settled agriculture,’
he said.

Mongolia is vast, potentially wealthy, largely unspoiled and barely
populated. It has always relied on its nomadic pastoralists, even through
the years of trying to establish an industrial base that would fit neatly
into the economic community of the Soviet bloc countries. Three-quarters
of the population live the harsh life of livestock herders. They provide
more than 40 per cent of the national income and will continue to do so
in the foreseeable future.

Indiscriminate borrowing of modern agricultural techniques almost ruined
the rural economy. Sodnom gives the example of livestock breeding which,
he said, relied too much on crossbreeding Mongolian animals with Soviet
and European breeds. The rationale was that crossbred cows give, on average,
2700 litres of milk a year whereas purebred Mongolian cows produce only
400 litres. The drawback is that crossbred animals cannot tolerate the harsh
Mongolian winters. ‘We almost lost our Mongolian breeds,’ said Sodnom.

Crossbred cows, used mostly on dairy farms, must also be fed better
rations than grazing animals. Growing enough fodder to keep the animals
healthy has not proved economic. Now, livestock breeders are reverting to
the remaining Mongolian breeds, improving them by breeding for particular
ecological zones rather than for the whole country.

Eurocentricity went right to the heart of the education system. Mongolians
now regard animal husbandry as a low-status occupation. Parents want desk
jobs for their children because the pay and prospects are better than for
agricultural workers. ‘Our education system is good, but not the best. There
is the same imitation (of the Soviet system). We need a new education system
that is more appropriate to our culture,’ Sodnom said. Meanwhile, increasing
numbers of young people continue to leave the countryside for the cities
– a dan-gerous trend when meat, wool, hides and other animal products are
still the country’s most important exports .

Mongolia’s attempt at Soviet-style industrialisation has failed, leaving
an industrial base struggling to keep its inferior and outdated technologies
functioning, said Sodnom. Mining, for example, is Mongolia’s second-largest
source of income but it is polluting and technically underdeveloped .

Erdenet, Mongolia’s second largest city 240 kilometres northwest of
Ulan Bator, is host to an enormous open-cast copper-molybdenum mine. The
mine is a joint venture, built in 1974 with 600 million Soviet roubles (Pounds
sterling 600 million at the official rate of exchange), half of it loaned
to Mongolia. According to Jamtsyn Dorligjav, deputy chairman of an umbrella
organisation for mining companies, the mine has earned Mongolia 700 million
roubles during its 12 years of existence yet it is still unable to repay
the Soviet loan. The income has been reinvested in yet more unprofitable
enterprises. ‘Behind this lurks the backward thinking and irrational management
that characterises state-owned mines,’ Dorligjav said.

The question now exercising the policy planners is how to chart a path
of development that fits in with Mongolia’s own culture – a path that is
more likely to lead to success than the previous one imitating the Soviet
Union. The first priority, Sodnom believes, is to improve the standard of
living for pastoralists, who are the mainstay of the Mongolian economy.
The country’s precious metals, gems, uranium, coal and oil offer a route
to diversification. They are important yet underdeveloped; they are also
finite. The harsh climate and poor soils rule out large-scale arable agriculture.
So, keeping a thriving livestock business will always be important for Mongolia
and that means keeping the pastoralists happy. There are clearly strong
political reasons, too, for keeping pastoralists happy. They represent most
of the population and, with the advent of democracy, their votes will always
be crucial.

The ruling party has given two strong incentives for people to stay
in the countryside. The first is its promise, made in May that it will provide
every home with electricity within three years. At present just 10 per cent
of households have electricity. This aim is ambitious considering the size
of the country and the way of life of the people. Mongolia covers 1.5 million
square kilo metres. It is six times the size of Britain, yet has a population
of little more than 2 million. Electricity cables in rural Mongolia are
out of the question. Instead the government has commissioned its Institute
for Renewable Energy to investigate solar and wind power. The insti-tute
plans to harness renewable sources of energy to provide 70 per cent of homes
with electricity within three years. The remaining households will use generators.

The second incentive to stick to the rural life is no less powerful.
The government passed a law at the end of last year permitting individuals
to buy and own businesses. Now, instead of families having to keep a certain
number of animals on behalf of the local cooperative, they can own all the
animals themselves. They may sell their stock or their meat, wool, hides
or any other product to anyone they like, at home or abroad.

This gives pastoralists a significant advantage over city-dwellers,
who already earn considerably less and face a higher cost of living. A middle-ranking
civil servant in the foreign ministry, for example, takes home 900 tugrigs
a month ($300 at the official rate of exchange). A herder can sell one sheep
for 400 tugrigs and a single cow may fetch between 2000 and 3000 tugrigs.
It is not uncommon for families to have more than 50 head of sheep and an
assortment of horses and goats, with the addition of yaks in the mountains
and camels in the Gobi desert.

Puntsagdasyn Luvsandorj, director of the Institute of Economics and
one of Mongolia’s foremost economic policy-makers, said: ‘Families used
to own more than 1000 animals. We cast these people out, labelling them
as exploiters. Now we recognise that they were the cleverest people among
us, economically.’

Although animal husbandry is the mainstay of the Mongolian economy,
its further development is limited. Pastures are already overgrazed and,
given the constraints on arable agriculture, there is limited room for growth.
Foreign investors are now welcome to set up businesses in Mongolia and are
allowed to repatriate their profits. Having opened its doors to the West,
Mongolia is hungry for modern technology and expertise. This time, however,
Sodnom wants to see what he calls a ‘new industrialisation’, built from
small to medium-scale enterprises. These, he said, are more likely to be
profitable than huge industries.

The enthusiasm for free enterprise is frightening. Although the new
opposition parties want any new government to remain left of centre – perhaps
something akin to social democratic parties – they do not seem worried by
the possible disadvantages of the new laws that allow 100 per cent foreign
ownership of new businesses.

British and Japanese businesses have lost no time in staking a claim
in the new market. Davy McKee in Stockport is installing new machinery to
process gold at a mine in Sharyn Gol, north of Ulan Bator. Marlec Engineering
Company from Corby is helping the Mongolian renewable energy institute to
manufacture windmills for the pastoralists. The pharmaceuticals giant Wellcome
is looking into the possibility of building a factory in Ulan Bator and
Glaxo is investigating the feasibility of supplying medical equipment to
Mongolia. British, Japanese and American firms are prospecting for oil.
A Danish company is to set up a milk powder factory in the capital and there
is a West German joint venture to build a meat processing factory. A Japanese
company based in Osaka already has a joint venture to export cashmere from
Mongolia. Most of these ventures arose in the past year and the list is
growing steadily.

Like many developing countries, Mongolia has undersold its minerals
and animal products. It now recognises that, in order to win a larger share
of profits, it must export more processed and finished products rather than
raw materials. At Darkhan, 200 kilometres north of Ulan Bator, Japan has
agreed to a plan to build a metallurgical plant to produce high-quality
steel. The plan is controversial because although it might help the country
to earn more from its ores, its main work will be to produce steel, an industry
that is in recession the world over. Secondly, it will saddle Mongolia with
a foreign debt of US $90 million for at least 7 years. According to Sanjaagiin
Ganjuurjav, director of the plant, just 15 per cent of the debt is to be
repaid in cash. The remainder is to come from export products such as cashmere,
partially-refined copper and other minerals. There are fears that this might
mean swapping economic domination by the Soviet Union for domination by
Western countries and transnational companies.

D. Sukh-Erdene, deputy director of the international department of the
Mongolian State Bank and an official of the newly formed Mongolian Party
for National Progress, said repayments will tie up all the country’s few
money-earning exports for years. ‘That’s why we were against it,’ he said,
‘not just our party but specialists at the State Bank, finance ministry
and ministry of economic relations.’ At present the country’s only debt
is to the Soviet Union, for 9.5 billion roubles. Most Mongolians, however,
dispute that the country owes anything because, they say, the Soviet Union
has dominated the country economically, enjoying Mongolian exports at well
below the market prices for years.

The new law on private ownership has led to some incongruous developments
in the state enterprises. For example, the mine at Erdenet, like all state
enterprises, must satisfy a government quota. The mine is now free to sell
its surplus produce once it has paid a tax on profits to the state. The
workers have formed a ‘cooperative’ but no one is quite sure whether the
cooperative owns the surplus produce. The managers of the mine, however,
oversee the sales and profit-sharing. The requirements for free trade, the
banking know-how and the administration, are not yet in place. The mine
has already sold some partly refined copper to Japan, as part of a private
deal, but instead of receiving currency it exchanged the copper for electronic
equipment, such as videos, televisions and so on for its workers.

Few individuals have tested the new laws on free enterprise, although
most are aware of them and the change that they represent. Taxi drivers
and restaurateurs have taken the first tentative steps towards capitalism
by setting up businesses in Ulan Bator.

In the countryside, the pastoralists are the vanguard of capitalism,
building up private herds, as they used to in the past. For them the change
is not so great, as they had always kept a few animals for themselves and
to sell for meat to city-dwellers wealthy or influential enough to collect
it by car.

Everything from the past 70 years is being questioned but the raison
d’etre for the pastoralists remains the same as it always was. The herders
are the geography-book Mongolians, in the traditional clothes they wear,
their food and drink, song and dance and in their way of life. In a way
they are as potent a symbol of Mongolia as Ghengis Khan. They may become
less important to the country’s economic stability but, for the time being,
bettering their standard of living is the highest priority in development.
But, as Sodnom points out, it is essential that this time the chosen path
of development ‘combines the traditional way of life with modern conveniences’.

* * *

1: WINDMILLS AND SOLAR PANELS WIN THE HEART OF A HERDER

YOUNG Mongolians are leaving the countryside for the cities. The government,
not surprisingly, is worried because they represent a large proportion of
the population – 70 per cent of Mongolians are under 35 years of age – and
because the country is still heavily dependent on the livestock industry.

The government knows it cannot fight the migration without improving
the pastoralists’ standard of living. For the expectations of the new generation
of graduates, shown some of the comforts of modern life in Moscow or Eastern
Europe, are very different from those of their parents and grandparents.

Rural life is hard. When a Mongolian from the countryside wants to throw
a party he or she will begin to warn friends a month or two in advance.
It is a big event because it is rare and there is very little else in the
way of social gatherings.

Winter stretches from mid-October to May. Temperatures drop to -35 Degree
C in the capital, -42 Degree C in the Gobi and even -65 Degree C in some
places in the far north. At this time of the year, and in the lambing season
in spring, the families stay in one area. The animals are still put out
to pasture, digging through the snow to get at the vegetation beneath. The
herders supplement the animals’ diet with hay, which they have cut from
the wild and stored for the winter. Water comes from shared wells and only
one in 10 families has electricity.

In a move to improve the lot of rural Mongolians, and to win their support,
the government announced in May that it would provide every home with electricity
within three years. This plan has an added advantage for the ruling party.
Television is immensely popular and the Mongolian People’s Revolutionary
Party enjoys a monopoly on broadcasts. But putting a television in every
home is no easy task considering the size of the country and the way of
life of the people.

Pastoralist families normally have two homes, a small one for summer
and a larger one for winter. They are round tents, called gers. The small
one is fitted out with the bare essentials, a few rugs and cooking utensils.
The family uses it in summer when it must move frequently to find new pastures.
When the herds have exhausted the grazing, the family packs the tent on
its horses, or in the back of a truck, and moves to new pastures a few kilometres
away. It is rare, nowadays, for a family to travel outside its province.
One family moves about 30 times in a year, covering a distance of 200 to
300 kilometres.

The larger ger is set up permanently in a somon, or village. The families
share communal water points in somons as well as out in the remote pastures.
You can hear wooden shacks in the Gobi before you see them, rattling from
the exertions of the large diesel pumps they house. The national grid is
confined to the capital and a few industrial cities. Lamps provided light
until Honda introduced diesel generators. They were so popular that the
word Honda came to mean generator among the rural people. Honda now faces
stiff competition from Yamaha, which makes more powerful generators that
can be used to pump up ground water as well as provide electric current.

Neither is wholly satisfactory, however, as there are very few roads
and transporting fuel is difficult. The government has charged the Institute
for Renewable Energy Research in Ulan Bator with the job of meeting all
electricity needs in the next three years. M. Chadraa, who heads the institute,
said he plans to supply 70 per cent of lighting needs over the next three
years, using wind and solar power.

Marlec, the Corby-based British company that makes windmills, is the
first Western company to enter into a commercial relationship with Mongolia.
Chadraa aims to produce 1000 windmills by December and a further 3000 by
December 1991. The windmills are designed to generate 50 watts of power
which can be stored in a battery. The battery provides enough electricity
to run a television or radio and a light bulb for about two days. The windmill
needs only two people to assemble it and has proved popular with pastoralists.

Baasanjavyn Jamtsai, of the Research and Production Corporation on Renewable
Energy, said the wind chargers had been tested for a year already and the
results were promising enough to embark on a joint venture with Marlec to
produce the machines. A further 60 chargers are currently being tested for
more detailed information on the suitability of sites.

A pastoralist in the north of the country said he preferred the Marlec
windmills to generators because they are silent and cheaper. His view is
surprising considering his experience with the windmill. He claimed that
his horses liked to scratch themselves against the pole that supports the
windmill. The machine fell over, losing two of its six blades. Within a
month a third blade flew off in a high wind. The windmill cost him 1200
tugrigs ($400). He was upset but was going to look for spares rather than
buy a generator.

It was not clear if the man was given clear instructions on how to assemble
and operate the windmill. Until recently the instructions were in English.
Jamtsai said they had since been translated to Mongolian and information
sheets were being assessed with the 60 chargers currently being tested.

Jamtsai said Mongolia should begin producing larger versions of the
windmills by next year. Spare parts were a problem in the past but should
become less so once they are produced in the country.

Solar technology, mostly imported from China, has proved less popular
in Mongolia’s gers, because the bulbs in the lamps provided burn out frequently.
Chadraa’s institute is now working on solar panels to charge batteries.
Once they have been refined Chadraa and Jamtsai see a combination of wind
and solar energy providing most of the demand for electricity in rural areas.
Any source of electricity is welcome in the countryside, not least because
Mongolian television broadcasts are immensely popular. Whether a source
of electricity, a television, a watch and a motorbike is enough to keep
a herder’s son at home remains to be seen.

* * *

2: DUST AND DEVELOPMENT GO HAND IN HAND

IN THE streets of Ulan Bator people often cover their noses and mouths
with what look like surgeon’s masks. Dust has always been a problem but
inappropriate agricultural techniques have made it much worse.

Soil erosion is a natural problem in Mongolia. Because the underlying
rock is granite and therefore resistant to weathering, the layer of soil
is just 5 to 10 centimetres thick in many places. The climate is dry and
there are strong winds all year. Erosion worsened after widespread inversion
ploughing, which makes furrows by turning the soil upside down. Of the 1.3
million hectares that are cultivated, more than a million are estimated
to be degraded and 230 000 hectares have been totally destroyed.

The fact that there are very few metalled roads increases the problem.
Jeeps and lorries trundle heavily over the open steppe, scoring the fragile
soil and leaving clouds of dust in their wake.

In South Gobi province, misconceived irrigation projects caused five
lakes to dry up. The uproar that followed resulted in the formation of the
Ministry for Environmental Protection in 1988. Three members of the ministry
are now officials of the newly formed Green Party. People are wary of irrigation
in the Gobi now but there are many other threats.

Nyamyn Hishgee, an agronomist in the department of environmental protection
at South Gobi, remembers collecting wood from the Gobi forests as a child.
There were so many trees then, he said, that he lost sight of his cart after
coming out of a ger in which he had stopped for a drink. Now Hishgee is
in charge of a programme to reforest parts of the Gobi.

Clearing away the environmentally destructive legacy of a Soviet-styled
industry is not as daunting a task for Mongolia as it is for the more industrialised
countries of Eastern Europe. The most pressing need for change is in the
inefficient coal-fired power stations that burn unrefined coal and belch
carbon monoxide, sulphur dioxide and unburnt fuel into the atmosphere. The
state-owned mines, built with Soviet assistance, are also polluting.

Montuushingiin Ganbat, of the Ministry of Environmental Protection and
the Green Party, said air pollution in Ulan Bator is probably still worse
than in any other city, although it is bad in mining towns. In spring and
winter the dust in the air is two to three times the permissible limit of
0.15 milligrams per cubic metre.

The large opencast mine at Erdenet (below) has sliced 200 metres off
the top of Erdenet hill. It has crushed 160 million tonnes of ore to flour
and extracted copper and molybdenum from it. There are about 17 other minerals
present but the mine lacks the technology to extract those as yet. From
the ‘waste’ the state mine has sculpted a new hill, with an unnaturally
flat top and evenly sloping sides. While it waits for the new hill to settle
so that it can begin to plant trees on it, the wind is gradually blowing
it away.

At Sharyn Gol, 180 kilometres east of Erdenet, the air is thick with
dust from an opencast coal mine. It takes just 10 minutes for newcomers
to the town to feel the dust burning their lungs and nostrils. Ganbat said
the incidence of respiratory diseases, including emphysema and silicosis,
at Sharyn Gol are almost double the national average.

There is still no recycling of water by industries or households. Wastes
flow straight into rivers. In the few tests carried out so far, the ministry
found that levels of ammonium and nitrate exceeded the WHO standard 40 to
50-fold. As the population of Ulan Bator increases, the water table sinks.
The wells in the capital are now at least 30 metres – and sometimes 70 metres
– deep. The old wells can no longer supply the city’s daily needs for 160
000 cubic metres of water, and 30 more wells are to be dug.

Ganbat lays the blame for Mongolia’s environmental problems on the government’s
economic policy which, he said, is based on growth without looking into
the future. ‘We want to change from a tech nological-economic policy to
an ecologi cal-economic policy,’ he said. Ganbat pointed out that 90 per
cent of Mongolia’s economic relations are with the Soviet Union but the
machinery and equipment exchanged for Mongolian goods are not as good as
those in the West. ‘The West has cleaner technologies,’ he said, ‘and we
need to change over to them.’