STEVE INSKEEP, host:

So many conflicts in the developing world come down to a struggle with modernity. People want to adapt to a changing world and also want to hold onto their traditions. That's exactly the struggle in one of the world's more remote countries: Mongolia.

Nomadic herders and their livestock provide the backbone of the economy on the Mongolian steppe, but the Asian nation's change from Communism to a market economy has put pressure on the nomads. Anna Panoka reports on efforts to improve the herder's livelihoods.

ANNA PANOKA reporting:

Mongolia's capital, Ulaanbaatar, is a city of contrasts.

(Soundbite of children playing)

PANOKA: Children in jeans and sweatshirts play basketball on a small court sandwiched between Soviet-style apartment buildings. Not far away, other children head home to their gers, the round yurt-like homes that Mongolia's nomadic herders have lived in for centuries.

Ulaanbaatar's population has risen sharply in recent years, and the dusty foothills surrounding the city are covered with newly erected gers. Harsh winters between 1999 and 2002, coupled with drought, killed off hundreds of thousands of animals, and many herders were forced to move to urban areas in search of work. But there isn't much work, and unemployment is a problem, especially in the ger districts.

Twenty-three-year-old Bulermah(ph), her husband, and two young children moved to Ulaanbaatar last year, and her husband now works odd jobs for low wages. Bulermah says it's barely enough, and they're considering returning to the Steppe to breed animals.

Ms. BULERMAH: (Through translator) It's better to be in the countryside and earn money to pay for our children's education. We don't have a steady salary or other assistance; and because we don't have a profession or specific work skills, we don't have steady work.

PANOKA: During several decades of communist rule, Mongolia's herders didn't have to worry about their next paycheck. The state owned the livestock, and herders were forced into collectives.

Mr. STEVE ZIMMERMAN (Mongolia Country Director, Mercy Corps): They had their animals allocated to them. They managed those animals. The product was taken off - basically, the cashmere, and in some cases, milk and meat - taken off. They were paid a salary of sorts. They were given free healthcare. So, basically, they were well provided for.

PANOKA: Steve Zimmerman is head of east Asia operations for Mercy Corps, which manages a U.S. funded development program in Mongolia called The Gobi Initiative. The program tries to help herders find other sources of income while diversifying their businesses so they aren't dependent on just one product.

If herders diversify, Zimmerman says, they should be able to sustain themselves, even if livestock dwindles in harsh weather. The initiative has been working with Altanchimeg, a nomadic herder, for three years. Her family joined several others, and learned how to make crafts out of wool and leather to sell to tourists attracted to the vast Gobi desert.

(Soundbite of livestock)

PANOKA: A strong spring wind blows across the rocky landscape surrounding Altanchimeg's ger deep in the Gobi, as she fills buckets of hay for a few dozen lambs and kids. Herding is still her primary job, but she says, making souvenirs has allowed her to pay for her children's college education. Altanchimeg's family works with other families; they sell animal products together.

Ms. ALTANCHIMEG: (Through translator) People in the group are always in contact. One of them takes the other's souvenirs and sells them. Not only the souvenirs, but we also process milk products together, and sometimes, when we have meat or vegetables, we also sell that as a group.

PANOKA: Several foreign-funded efforts in Mongolia are trying to promote the creation of cooperatives, encouraging herders to work together again, so they can weather the rough climate and the ongoing economic transition from communism to market economy.

(Soundbite of camel being milked)

PANOKA: While nomadic herder Batstesteg milks one of her camels on a windy spring afternoon in the south Gobi, her husband Badamsuren describes the advantages of joining with other families in a cooperative.

Mr. BADAMSUREN: (Through translator) Either way, if I'm alone or in a group, I have to make money. But when someone works within a group, it's easier to get a loan and support from outside organizations. That's why we founded the group.

PANOKA: By working together, a group or cooperative of herders can market products together, save on transportation costs, and get a better price for their goods. So says Bigolmah(ph), Executive Director of the Mongolian cooperative Training and Information Center. Her organization and others are now trying to get herders involved in actually processing their raw materials, rather than just selling them to traders.

Ms. BIGOLMAH (Executive Director, Training and Information Center, Mongolia): Just imagine how much we could produce of 30 million animals with this hide, skin, meat, milk and cashmere wool. So everything can be used for production of good products.

PANOKA: Most of Mongolia's cashmere, Bigolmah says, is sold to Chinese traders for processing.

Ms. BIGOLMAH: So we're creating jobs in China, but not in Mongolia. That is also not good situation.

PANOKA: But Bigolmah says it's been hard to create processing cooperatives in rural Mongolia. There are often great distances between families on the open Steppe. Many herders saw similar business efforts fail in the early years of Mongolia's transition. And she says trust is also an issue.

Some groups estimate that 20 percent of Mongolia's herders are involved in cooperatives, but other experts say the number is much lower. Thirty-eight-year-old Chiloonsetsag(ph) and her husband, live in the dry steppe just north of the Gobi desert in central Mongolia. She's heard about cooperatives, but has no interest in joining one.

Ms. CHILOONSETSAG: (Through translator) Cooperatives can be good, because people work together and they have more options to sell their goods. But, for me, it's not such a good idea. I would rather stay on my own. Some of the people in the cooperatives don't know each other well, and they might not trust each other, and compete with each other.

(Soundbite of motorcycle starting)

PANOKA: Chiloonsetsag gets on the back of her husband's motorcycle as they prepare to drive off to tend their grazing animals. They've been able to increase the size of their cashmere goat herd without outside assistance, and without a cooperative. Although more herders are working together again, many herders, like Chiloonsetsag, prefer the independence they gained after the collapse of communist rule.

(Soundbite of motorcycle motor)

PANOKA: For NPR News, I'm Anna Panoka.

INSKEEP: She was sent to Mongolia by the International Reporting Project at the School of Advanced International Studies here in Washington D.C. You can catch a glimpse of the lives of Mongolia's nomadic herders and hear one of them singing to her camels by going to our website: npr.org.

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