Mongolia Shakes Up Socialism With Its Version of <i> Perestroika</i>

Like its huge and dominant neighbor to the north, this ancient nation of herdsmen and miners, once ruled by Genghis Khan, is restructuring its Marxist society.

But what the Soviets call perestroika, the Mongolians call shinechel, or renewal. And they are greeting the liberation of the state-controlled economy and the infusion of democracy with an air of excitement.

The old ways brought shortages in a land of plenty and political timidity to a people of great warrior tradition.

Shinechel is still too new to claim many accomplishments, but there are great expectations.

“Before, we said that capitalism and socialism can’t exist together,” said Puntagdasyn Luvsandorj, director of the Institute of Economics of the State Planning Committee. “Now we say they must cooperate.”

The main target of reform is the state monopoly on production imposed in the 1960s on both industry and, improbably, in rural areas, where people are scattered across a nation nearly the size of Western Europe, wandering the grasslands as semi-nomadic herdsmen.

One consequence of the monopoly is that livestock numbers have stagnated at about 23 million head since the early 1970s even though the human population has doubled, to about 2 million.

Half of the meat produced must be exported to the Soviet Union to pay for Soviet goods and financial aid, leaving city residents to stand in line, sometimes for hours, for scarce supplies. Meat is the staple of the Mongolian diet.

More than half the population has left the harsh life on the grasslands for cities, putting further strains on food supplies.

“The food situation is getting worse,” said one foreign diplomat, noting that grain and vegetable farms, all run by the state, are plagued by “bad planning, bad management and bad profits.”

The government is trying to spur meat production by increasing the private stocks that herdsmen are allowed to keep. Those in the Gobi desert region may keep 100 head, while those in other parts of the country may keep 75. Farmers may work small private plots.

Industry has fared better because of heavy investment and technical assistance from the Soviet Union and other socialist nations, helping Mongolia develop its rich mineral resources.

In December, Mongolia’s Parliament passed an industrial law giving factory directors greater authority over planning and investment. But it’s a case of “three strikes and you’re out”: The government will bail out money-losing enterprises

only two times before they are shut down.

“Before, we didn’t participate in selling our product, so we were not interested in quality and meeting world competition,” said Chimedeeren Erdenechimeg, general engineer at a carpet factory in Ulan Bator. “Now, according to the new law, if we produce a good product and can find a market, the living conditions of the managers and workers will improve.”

Free markets, encouraged by the government, are still small but growing. Owners of private cars have gone into taxi services, a few small restaurants have appeared and private clothes makers are selling to retail cooperatives.

But the pace of economic change is likely to be slow, said one foreign diplomat.

“It’s such a vast country,” he said, and “there is little pressure from below for privatization” because people are relatively prosperous and have known nothing but socialism since the Marxist state was founded in 1921, only four years after the Russian Revolution, making it the second-oldest Marxist society in the world.

Faster change may come in the political sphere, where the ruling Communist Party is debating an election law that for the first time will allow direct multi-candidate elections.

The party is also trying to limit the role of party officials to policy-making and to streamline the government.

“Marx and Lenin said the roles of the party, the government and mass organizations should be separate,” said Kinayat Zardihan, a leading ideologist in the party’s Institute of Social Sciences. “But in our country, this difference has disappeared.”

As in the Soviet Union, the official press is encouraged to condemn what are now regarded as errors of the past. The press speaks openly about repression and political purges in the 1930s. Yumjaagiyn Tsedenbal, ruler for 40 years until his ouster in 1984, is criticized for forcing collectivization in the 1960s, and his Russian wife is criticized for wielding too much power.

Statues in Ulan Bator of late Soviet dictator Josef Stalin, and native oppressors as well, have recently been smeared with paint.

Zardihan said the party is rewriting history to include the truth about events that have shaped the nation.

One government official noted that until now, everything that happened before 1921 was regarded as bad, including the 12th- and 13th-Century advance of Genghis Khan’s horsemen that created a Mongol Empire stretching from the Danube to the coast of China.

President and party leader Jambyn Batmonh, a 62-year-old former rector of the state university, is also hoping to ease his remote and landlocked nation away from its nearly total dependence on the Soviet Union and other Soviet Bloc nations.

Relations with China, with which Mongolia shares a 2,900-mile border, show signs of improvement as Moscow and Beijing patch up old differences.

Mongolia, which sided with the Soviet Union when its two giant neighbors split in 1960, sent home one division of Soviet troops in 1987 and has pledged to remove a “considerable number” of the remaining 50,000 Soviet troops guarding Mongolia from a potential Chinese attack.

Diplomatic Ties to U.S.

In early 1987, Mongolia and the United States established diplomatic relations and are negotiating cultural and consular agreements.

Currently, 97% of Mongolia’s total annual trade of about $1.6 billion is with socialist countries--80% with the Soviet Union. Those figures will be hard to change in the near future. Mongolia receives about $1 billion in aid and two-thirds of its capital investment funds from the Soviet Union every year, which locks it into shipping its ores, cashmere and meat to the socialist bloc.

Officially, at least, Mongolians are full of praise for the Soviet Union, which helped build the nation’s cities and industry.

Under Soviet-style socialism, Mongolia has become a nation of nearly 100% literacy where 25% of the people receive higher education. Medical and other welfare facilities are inexpensive, and worker incomes average nearly $200 a month, one of the higher figures in Asia.