Goatskin greets Gucci in a modernising Mongolia

John Garnaut, Ulan Bato

WEATHERED old folk in goatskin gowns and young couples wearing designer sunglasses are squeezing into Gandan monastery in Ulan Bator, the capital of Mongolia, to lay money at the feet of a small and ornate statue of Buddha.

The room has the same yak butter smell as monasteries in the Tibetan capital, Lhasa, but the scene is otherwise more natural, lively and shambolic.

As monks count bundles of money, child trainees stifle yawns. They have been chanting all day and into the night for most of the two-week celebration of the lunar new year.
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I ask my friend what they are chanting about. ''I don't really know,'' he says. ''Actually, nobody does. It's all in Tibetan - we just have to trust them.''

Ninety-eight per cent of the country's 2.7 million people count themselves as Tibetan Buddhists, thanks to ties that go back centuries, but only a few hundred trained monks can read the scriptures of their faith.

My friend, a Mongolian neighbour from Beijing, has brought me here to pray for good health and fortune in between his meetings about national politics and personal uranium exploration.

Tibetan Buddhism is not the only foreign idea that Mongolia has absorbed and adapted in its own idiosyncratic way. Only two decades ago the country flicked a switch from being a dour Marxist-Leninist satellite of the Soviet Union into a boisterously democratic market economy.

''We have 17 free-to-air TV stations and 16 cable channels,'' says market researcher Andreu Enkhtuvshin.

As night falls, down at the main square the ice skating rink fills with young people spinning to Guns 'n' Roses and Mongolian hip-hop, wishing each other ''happy Valentine's Day''.

The stately little building on the east side of Sukhbaatar Square used to be the old Soviet cinema. It has been revamped as the Mongolian Stock Exchange. While it doesn't rank among the world's best, like most things in Mongolia it seems to be heading in the right direction.

''Our 344 listed companies have a market capitalisation of about $2 billion and daily trading volumes of about $200,000,'' says Altai Khangai, the exchange's chief executive. ''It's not the biggest in the world, but it has become critical for us to build capacity.''

On the square's southern edge is an impressive high-rise in the shape of a sail. I was told it was bought by former Thai prime minister Thaksin Shinawatra while he spent a month at the Genghis Khan Hotel. I was also told it was owned by a former Mongolian PM, and the South Koreans, and that they were fronting for the Japanese yakuza, and that it would have to be torn down because it was crooked. The real and surreal seem happily interchangeable.

On the west side of the square is the city's tallest building, at 17 floors. The first two floors are occupied by the likes of Ermenegildo Zegna, Montblanc and Louis Vuitton.

''If you want to really see leapfrog development, you'll notice we don't have McDonald's or Starbucks but we do have very good French, Japanese and Korean restaurants with international chefs,'' says the Vice-Minister of Finance, Ganhuyag Chuluun, one of the country's rising stars. ''Mongolians didn't really shop around for Levi's - we went straight from riding horses to Louis Vuitton.''

Source:Reuters news service