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By Graham Earnshaw, Reuters

ULAN BATOR, May 25, Reuter – Ask trade officials in most countries how much business they do with the United States and they will reply with a string of statistics. But in Mongolia, they reply with just one number — zero.

Mongolia, an isolated but resource-rich land in the heart of Asia, has been submerged in the Soviet Bloc economy for decades and is only just beginning to look out and consider the possibilities of the world market.

“We have no trade, no contact with the United States,” senior Foreign Trade Ministry official A. Bayartogtokh told Reuters. “But we are also interested in developing foreign trade relations with Western countries.”

About 97 per cent of trade at present is with the Soviet Bloc countries, which give massive aid to help transform Mongolia from a grassland economy of two million people and 23 million livestock into a communist industrial state.

Only a tiny proportion of trade is conducted with Mongolia’s other giant neighbour to the south, China. Centuries of mutual hostility coupled with the after-effects of the Sino-Soviet split of the early 1960s have taken a toll.

Unlike most of the world, Mongolia can boast a surplus in its trade with Japan.

Not much — it sells 10 million dollars worth of cashmere and leather goods to Japan each year in return for two million dollars worth of equipment. But the difference is used to finance Mongolia’s handful of diplomatic missions abroad.

Mongolian officials decline to reveal detailed figures. However, trade with the Soviet Union, Mongolia’s protector and helper, amounts to 80 per cent of the total.

A Soviet embassy spokesman, asked for figures on Soviet-Mongolian trade, replied: “It is not easy to calculate, but approximately 100 per cent of all Mongolia’s imports of oil products and machinery come from the Soviet Union.”

Mongolia sells minerals, meat and leather goods and in return buys industrial equipment, machinery and vehicles. Western diplomats in Peking say imports consistently outweigh exports, with the difference being made up in Soviet aid.

Officials in Ulan Bator say foreign trade last year totalled 1.8 billion dollars, about the same as for 1985, and the plan is for growth of about 30 per cent over the 1986-1990 period.

Mongolia is rich in mineral resources, and has large deposits of coal, iron ore, copper and other metals. Then there are its traditional products — wool, hair, meat and leather.

But with productivity in all parts of the Mongolian economy amongst the world’s lowest, there is a problem in finding products at competitive prices the outside world would want to buy.

An equally difficult problem is finding a way to get goods to market in the first place.

Mongolia is landlocked and linked to the outside world by a single-track railway line running north-south from the Soviet Union to China.

At present 99 per cent of trade moves along the track north to the Soviet Union, but China provides the best hope for Mongolia’s foreign trade — if Peking will allow access.

“One of the keys to the future of Mongolia’s foreign trade is clearly the development of transit trade across to a Chinese port, probably Tianjin,” said one foreign expert.

“We have talked to the Chinese about transit trade, but so far there have been no results,” trade official Bayartogtokh said.

“If the Chinese side agrees to transit trade, we are very interested in shipping our exports through there, especially to Japan, (North) Korea, Vietnam and other countries. I hope that this problem will be settled in the near future.”

Chinese officials say they have no objection in principle to letting Mongolia use their ports for exports, but one said China’s transport system and harbours were already congested.

Interest in developing trade with the West does not appear to be universally popular in the Mongolian leadership.

The country’s leader, Zhambyn Batmunkh, said in a speech last year that Mongolia’s main aim in developing foreign economic relations was to “draw closer to the Soviet Union and other countries of the socialist community in every way”.

Mongolia has been a member of Comecon, the Soviet Bloc economic grouping, since 1962, but it belongs to virtually no other international economic organisations.

Asked if Mongolia wanted to join the world’s largest trade body, GATT, the trade official replied: “It is not necessary for us to be a member.”

Then he added: “We will see. Our trade with western countries is very small at present. But in future years, we will see.” REUTER

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