Mongolia hopes visit by Bush to lead to free-trade agreement

Mongolia hopes the visit by U.S. President George W. Bush will lead to a free-trade agreement and more aid for this economically struggling North Asian nation, President Nambaryn Enkhbayar said Tuesday. Enkhbayar said that during Bush's four-hour visit on Monday, the two leaders discussed economic cooperation, a trade agreement and scholarships for Mongolian students to U.S. universities.

"A free-trade agreement would give stimulus to sell our products and it will create jobs," Enkhbayar told The Associated Press in an interview.

Bush was the first U.S. president to visit Mongolia, a nation of 2.8 million people, and many in this former Soviet ally looked on the trip as a show of support for its democratic system.

The U.S. and Mongolian presidents issued a statement affirming a "comprehensive partnership," promising to fight international crime, money laundering and terrorist financing, and to cooperate in international peacekeeping. Mongolia has about 160 troops in Iraq and also sent forces to Afghanistan.

Enkhbayar said he hoped for an announcement soon of aid from the Millenium Challenge, a US$1 billion (Ђ850 million) U.S. program meant to reward poor countries that show a commitment to economic and government reform.

Bush and others say the key goal for Mongolia to meet to qualify for aid is to tackle widespread graft.

"There should be a strong determination of the leadership to have a good legal system to fight corruption," Enkhbayar said.

Bush on Monday announced US$11 million (Ђ9.3 million) in aid to Mongolia's armed forces through a separate program for nations allied with the U.S.-led war on terror.

"As you build a free society in the heart of Central Asia, the American people stand with you," Bush said in a speech to members of the Great Hural, Mongolia's parliament.

This sprawling nation of grasslands and desert abandoned communism in 1990 and launched aggressive economic reforms. But it has struggled with falling incomes amid complaints that privatization of state industry put the country's wealth in the hands of a politically connected elite.

Many Mongolians work as traditional herders of cattle and sheep. Its main exports are commodities such as copper and cashmere that leave it at the mercy of fluctuating world market prices.

Wages average less than US$200 (Ђ170) per month, according to N. Dorjdari, an economist with the Open Society Institute, a think tank backed by philanthropist George Soros.

Enkhbayar was elected president in May after serving as prime minister for the ruling Mongolian People's Revolutionary Party, which led the country for six decades under communism but now supports democracy and free markets.

Mongolia's government is run by the prime minister. But the presidency grew in importance over the past decade as the country went through a series of short-lived governments.

Many ordinary Mongolians expressed delight at Bush's visit. "I was very excited about his visit," said shop clerk Ariuntsetseg. "We're so glad he came."

Even O. Bhum-Yalagch, a leader of Mongolia's Green Party, said he didn't mind Bush's visit. He stood outside a downtown hotel a day before Bush's arrival holding up protest banners urging, among other things, "Peace in Iraq," reports the AP. I.L.

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