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Capitalism for nomads - (article)

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Capitalism for nomads
Hundreds of Americans take market gospel to Gobi Desert

Jasper Becker, Chronicle Foreign Service Monday, June 24, 2002


Gobi Desert, Mongolia -- The Soviet-era Antonov aircraft taxied to a halt on the pebble-strewn Gobi Desert plain, and U.S. veterinarian Amanda Fine stepped out to begin a most unusual mission -- teaching capitalism to herders of one of the world's most remote regions.

Fine and several hundred other Americans have come to Mongolia to aid 280, 000 nomads scattered over an inhospitable region the size of Texas. This arid desert is home to Asia's last herds of undomesticated horses, camels and donkeys and has temperatures ranging from -40 Fahrenheit in winter to 104 during the summer.

The experts are part of a $3 million U.S. Agency for International Development-sponsored program called the Gobi Initiative aimed at bringing the nomads into a market economy.

"A lot of pieces of the puzzle need to come together for capitalism to work out here," said Fine.

Nearly a decade after the Soviet Union ended 70 years of semi-colonization of Mongolia, President Natsagiyn Bagabandi is transforming this once-communist state of 2.6 million people into a free-market nation.

"The government is making admirable progress in developing a realistic strategy for reducing poverty and improving livelihoods," World Bank President James D. Wolfensohn said on a visit last month.

The USAID project in the Gobi comes at a critical time. The nomads are sinking deeper into poverty because of droughts and two harsh winters that have killed an estimated 5 million animals, ruined pasture lands and caused residents to abandon 40 percent of their irrigation systems and wells.

The nomads have little interaction with government beyond sending their children to school in whichever town is nearest their latest pasture for grazing their camels, goats and sheep. They typically eke out an existence selling wool from their flocks of sheep, cashmere goats and camels.

Fine, who is finishing a doctoral degree at Michigan State University on the transmission of diseases from wild animals to livestock, has gained the herders' trust by staying in their round felt tents called yurts, savoring camel cheese and eating boiled sheep intestines.

Each day, she shows local veterinarians how to teach Gobi herders to keep their animals healthy. Her colleague, Chicago commodity broker Sue Hahn, explains the inner workings of the world market for cashmere and price fluctuations for goatskins.

The Mongolian economy centers around agriculture and livestock breeding, which accounts for 36 percent of gross domestic product and employs nearly half the domestic labor force, according to the CIA World Factbook 2001. Even manufacturing is largely devoted to processing agricultural products into such goods as cashmere and leather.

Traditionally known as Outer Mongolia, this nation of steppe, mountain and desert had previously encouraged its majority Khalkha Mongols to mix hardy local breeds with Ukrainian sheep to produce a thicker, cashmere-like wool, under a philosophy of quantity over quality.

But the U.S. program hammers home the point that only the finest cashmere or camel hair will fetch a decent price in the fiercely competitive global marketplace. Some experts estimate that Mongolia could earn as much as $300 million a year exporting top-of-the-line cashmere wool.

Bayanjargal, the project's representative for the desert province of Gobi Altai, has organized the first trade fairs for Gobi herders. Bayanjargal, who prefers a suit and tie to the traditional knee-high leather boots and purple silk flowing robe called the del, has also sent samples of goat hair to a laboratory in the capital, Ulan Bator, to discover which breeds produce the best fleece.

The breakup of the Soviet Union meant the demise of most of Mongolia's external aid and caused a severe economic crisis in the first half of the 1990s. In the Gobi, herders were told to pay for many services that were once free, including education for their children and veterinary services for their animals.

"We are teaching the herders basic business skills so they no longer look to the government," said Bayanjargal, who like many Mongols uses one name. "When we started, the locals said, 'Just give us some money. We don't want advice.' Now that's all changed."

A local buyer named Doljinsuren says economic reforms have led to sharp increases in livestock herds, especially cashmere goats. Herders now earn about $1,000 a year and can afford to buy generators, satellite dishes and tractors.

At a trade fair, herder Oyunchuloon sold 17 wool items for about $60 and was very thankful.

"We had 300 animals, but we lost 80 percent in the last two years. Last year we managed by selling wool -- we produced 60 pounds -- but this year is very hard," she said.

Some environmentalists wonder if herders such as Oyunchuloon can continue to survive in the Gobi because of changing weather patterns.

Huge dust storms swirled eastward this year, choking Asian cities and depositing a fine dust as far away as the United States.

"What is new is the frequency, scale and severity of these storms," said Lester Brown, a leading U.S. environmentalist with the Washington think tank Worldwatch Institute, during a recent trip to China. "It shows the desertification is getting worse -- and I think 80 percent is due to man-made causes."

Meanwhile, overproduction in China has caused world cashmere prices to plummet, and the herders have been buffeted by the natural calamities of the past several years. The steppes beyond Bayanjargal's air-conditioned offices are littered with the bones of animals that died when snow and howling winds brought the temperatures down to a record -50 degrees Fahrenheit.

"Over 1,000 families lost their entire herds," Bayanjargal said.

The government is well aware that, without outside help, many herders will wind up in cities. The population of Ulan Bator has increased from 630,000 in 1990 to more than 1 million today.

"People want to live in the Gobi as they always have," said Fine. "If they can get access to the market, they can continue their way of life."

©2002 San Francisco Chronicle. Page A - 10


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