SHADOW ECONOMY THRIVES IN MONGOLIA

SHADOW ECONOMY THRIVES IN MONGOLIA

Chinese crockery, Russian condoms, Chanel No. 5 perfume - Egiima's store in the Mongolian capital has it all.

State stores, by contrast, have little but lines at the food counters.Egiima offers Chinese cigarettes, a pair of boots, hair dye or purple nail polish - anything she or one of her four brothers or sisters can stuff in a bag during one of their twice-monthly trips to China or quarterly trips to Poland.

Mongolia, which has only 2.3 million people scattered over an area three times the size of France, is in deep trouble economically, with shops like Egiima's the only bright spots.

"We made half a million Tugrik profit in one year without any loans," said Egiima proudly. Like many Mongolians she uses only one name.

That profit is $12,500 at the official rate and $2,900 at the black market rate. But by any calculation it is a huge sum of money for a Mongolian, most of whom make just 12,000 Tugrik (officially $300) a year.

"There has always been an elite in Mongolia. . .Now it's just new people moving into it," said H. Gundsambuu, a sociologist and author. "Before it used to be Communist Party bosses, now it is entrepreneurs."

For nearly 70 years, Mongolia was almost a colony of its huge northern neighbor, the Soviet Union. As Mongolia turned away from communism and as the Soviet Union collapsed, so too did trade and the economy.

"Although the Soviet Union has collapsed, we still have a strong need for goods. We had all our trade relations cut so the only way to meet our needs is to work out new channels," said Mr. Gundsambuu.

The main new channel seems to be the excess baggage line at the Mongolian airline counter in Beijing airport. Scores of would-be Egiimas struggle to get their unwieldy bundles of clothes, vacuum flasks, boots and table settings onto the plane for the less than two-hour flight to Ulan Bator.

On one recent trip there was so much excess baggage the airline sent along an extra plane to take it.

Once the goods are back in Mongolia and have made it past customs officers who ignored most of the semi-legal trade, they enter a world of private shops and slick characters where the dollar is king.

Malls filled with tiny private shops selling the hand-carried goods, from stereos to sunglasses and from blouses to blue jeans are now the favorite haunts of the teen-age hustlers and go-getters of Ulan Bator.

''I've already saved $500, but I want $1,000 before I go to Beijing," said Bolormar, a 21-year-old woman convinced she will nearly triple her money if she can join the shadow-market game.

The shadow economy is thriving because Mongolia's laws and official attitudes have not yet caught up with new realities.

New laws on customs regulations, import duties, sales taxes and foreign exchange will have to be passed. A whole generation of middle managers who grew up in the Communist system will have to go before the official economy can start to rival the shadow one.

In the meantime some people are getting very rich; others are getting the goods they desperately want. Others still, those without any access to

dollars, are left out in the bitter cold of the Mongolian winter watching with envy those who can play the capitalist game.

Most officials and politicians believe a strong private economy is the only thing that can save Mongolia. They see the new classes of haves and have- nots as a necessary price to pay.

"The danger that there is polarization of income is less than the danger when all people are at the same level and are poor," said Mendsaihany Enhsaihan, chairman of parliament's Standing Committee on Economic Affairs.