Crashes and rebounds may be roiling world financial markets, but one stock exchange is providing its investors with a safe haven for their money.
The Mongolian Stock Exchange is not known for its knee-jerk reactions to international financial trends. In fact, the Mongolian Stock Exchange is not much known for much of anything.''The Mongolian stock market is still very insensitive,'' says Lkhagvasuren Orgil, a member of the exchange. ''There is no connection and influence from the international markets.''
Stock markets in emerging countries have proliferated in recent years as more nations open their markets and encourage foreign investors. For U.S. exporters, these steps spur privatization and support consumer markets for a broad range of other imported goods and services.
In Mongolia, isolation is a way of life. The landlocked country of 2.3 million is sandwiched uncomfortably between China and Russia.
The stock exchange in Ulan Bator's Sukhbator square is a solemn gathering of 29 brokers. They hold earnest trading sessions every morning for 90 minutes Monday to Friday that are more akin to religious rituals.
The setting - a former children's cinema designed in classical Stalinist style - was given some of the decorative trappings of a capitalist venture by Austrian contractors in the early '90s.
The market may be unexciting, but it is still a part of most Mongolians' lives.
''By the end of 1995, all Mongolians were shareholders,'' Munkhtsetseg, an official from the Foreign Relations and Research Department of the exchange, said in flawless English during a recent visit.
After the collapse of the one-party state in 1990, the first post-communist government issued blue vouchers allowing every citizen to own shares in previously state-owned enterprises.
The reform drew support from Western governments, and also from sympathetic non-government institutions intrigued by one of the world's most offbeat nation-states.
The Ulan Bator stock exchange was built with support from Harvard University. Each of the dealers was sent on a three-month training course to learn the basic principles of brokering.
To date, 440 companies are listed, but the exchange still boasts capitalization of only 13 billion tughrik ($16.2 million). Turnover remains tiny, at around 50 million tughrik a day, though it is increasing steadily.
The exchange's progress is impressive after just five years, particularly given that its inception was managed by a 26-year-old.
Zholzhargal, an aristocratic Mongolian trained in the United States in economics, argued successfully for a big-bang, stock-based reform strategy to drag his nomadic country into the late 20th century.
The exchange played a significant role in the redistribution of former state assets and paved the way for further radical economic reforms in the past year.
In April, the government abolished all tariffs and trade taxes, foregoing short-term income in a bold move to woo foreign investors. Privatization of the state sector has been stepped up with 900 companies due to be sold off by the end of 1998.
The Democratic Union government that took power in elections last June is pushing for more shock therapy to loosen up the economy.
The strategy is not without risk.
Conservative Mongolians are concerned that foreign shareholders - especially Chinese - will spur a new wave of economic colonialism.
Mongolia's bold reformers assert that full-scale privatization is the only remedy for 70 years of economic stagnation.
Now, however, all remnants of the old command economy are earmarked for dissolution with some money-losing state enterprises being auctioned off for pennies if necessary.