Mongolia’s Young Multiparty Democracy Fights for Economic Survival : Asia: Ulan Bator appeals to the world for donations of food, medicine and other goods after collapse of central planning system.

One year after its peaceful transformation from Communist dictatorship to multiparty democracy, Mongolia is struggling for economic survival.

Collapse of the old central planning system and the abrupt end of Soviet aid have brought the remote Central Asian nation to the brink of bankruptcy.

Stocks of fuel, hard currency and staple foods are low or nearly gone. Power failures are frequent in Ulan Bator.

Many lively, non-Communist publications have been founded, but there is hardly any paper to print them on.

Stores are jammed with customers, but nearly empty of goods. Prices for what is left have soared beyond the reach of many people. Unemployment is at 15% and rising.

At the end of April, the government appealed to the world for donations of food, medicine and other goods.

Few people say they are discouraged. Confused and anxious, yes, but many see the hard times as the price of seven decades of communism, now being replaced with capitalism.

“There is some hope, not for tomorrow but for the day after tomorrow,” said Narantsetseg, a 28-year-old teacher, as she nursed her newborn.

She was an enthusiastic supporter of peaceful protests last year that forced the ruling Communists to allow opposition parties and hold free elections. The Communists won, but formed a multiparty government and adopted the opposition’s program of capitalist reform.

Now the consuming passions of Mongolians are English and market economics, considered the main tools for entering the modern world. The most popular book at Mongolia State University is American economist Paul Samuelson’s “Economics,” a standard college text in the United States.

English courses, once rare, are offered in dozens of technical institutes and workplaces. Teen-agers stop foreigners on the street for quick English lessons.

Western economists and management experts arrive on the weekly plane from Beijing to offer advice. A record 25,000 Mongolians traveled abroad last year, most of them to attend seminars and tour modern factories.

Underlying the eager study is a deep, largely unspoken fear that, if Mongolians do not run as fast and far as they can from their Stalinist past, it could rise up to haunt them.

Vice Premier Davaadorjiyn Ganbold, one of several non-Communists in the Cabinet, said 1991 will be a dangerous year. Everything depends on the success of a privatization program scheduled to start in June.

First, the government will auction off small stores, cafes and service companies. Then it will turn over the big state companies by giving each of the 2.1 million citizens a coupon worth 15,000 tugriks, equal to $2,140 at the official exchange rate or $250 at the widely used black market rate.

Stock markets will be founded and the people can use their coupons to buy stock in the former state companies.

Wholesale markets for wheat, livestock and other commodities also will be established. The entire process could take two to three years, Ganbold said, and critics say the pace is too slow.

The government’s only concrete step so far has been to encourage the private ownership of livestock, which has reached about 50%.

A year ago, Ganbold was a 33-year-old university lecturer in Marxist economics, chairman of the National Progress Party and the main advocate of switching to capitalism virtually overnight.

As vice premier, sitting in a huge office in the Government Palace, he grinned a bit ruefully and said laws must be passed to regulate each aspect of the new economy.

Ganbold said the slower pace does not indicate doubts, because “we have no alternative to a market economy and political pluralization. The other side is kaput.”

Foreign countries will play a key role.

For seven decades, Mongolia’s main ally was the Soviet Union, its northern neighbor. Soviet aid provided nearly one-third of the budget, and most trade was barter with Moscow.

The Soviets, who have their own economic crisis, have halted nearly all aid and put trade on a hard-currency basis. Mongolia does not have hard currency to buy the fuel, spare parts, machinery and foodstuffs it got from Moscow.

Gradually, the Mongolian airline’s Soviet-made fleet is being grounded for lack of parts. Factories are falling silent and food stocks are depleted.

Some say the crunch will come this summer, when the flour runs out. Others say next winter, when power plants may run out of coal.

Soviet perestroika inspired Mongolia’s liberalization. If conservatives take full charge in Moscow, some fear that the same will happen in Ulan Bator. Democratic forces can expect no support from China, Mongolia’s southern neighbor.

Mongolians and foreign analysts say speedy aid and investment are needed from the West and Japan.

So far, Japan has pledged $6 million in aid for this year, and the United States says it will provide $2 million. Washington also has promised 30,000 tons of wheat.

Hundreds of Japanese and American businessmen have visited in the last year, but only one Japanese company and three U.S. firms have signed investment contracts.

“If we really believe in democracy, we can make it happen or watch it not happen,” a Western observer said, on condition of anonymity. “This is a country with a bright population. You can get a lot of bang for your buck.”