The economic and political reforms have given a veneer of prosperity to Ulan Bator, but they have brought great hardship to many Mongolians, especially urban dwellers who worked in now defunct state industries. The fall in world prices for Mongolia's main exports, copper, gold and cashmere, and the contraction of the Asian and Russian markets have also hit Mongolia hard. Always a poor country, the living standard is lower than in the last years of communism. According to the World Bank, one third of the population lives below the poverty line and one in four children is chronically malnourished.

Many teenagers are forced to go into streets in order to earn money for their families.

This has resulted in the phenomenon of Ulan Bator's street kids, who have been growing in number for six years. Today, according to the police, there are 382 children living permanently on the streets, many refugees from abusive alcoholic parents. The number rises occasionally to between 500 and 1,000. They beg, steal, pick-pocket, polish shoes, carry rubbish or do other menial tasks just to stay alive. The street children sleep in the open when the weather is warm and during the freezing winter nights they take refuge in communal flats or in the city sewers. Below ground they huddle in gangs of about 25 for safety and sleep close to the insulated pipes carrying hot water to apartment blocks.

There are 16 foreign agencies working with the Mongolian government to relieve the plight of the children, including the Christina Noble Children's Foundation. Dublinborn Christina Noble, herself once a badly abused street child in the Liberties, has run a centre for street children in Vietnam since 1990. Mongolia has the same problems as Vietnam, Noble told The Irish Times last year, children being eaten alive by lice, suffering from syphilis and herpes - with no one to help because Mongolia is not fashionable". Two Irish nurses, Annette Hearns (29), and Orna McEntee (27), who work with the foundation, have been down the sewers to see conditions for themselves. Over several months they befriended the children, otherwise it would be too dangerous.

"The sewers are pitch black, full of flies and so humid that my glasses steamed up," said Annette. The foundation "helps families to stay together to avoid their children ending up on the streets and assists those children who are on the streets to get back into mainstream society," said its Ulan Bator-based director, Joe Woolf. "We are helping boys and girls who are prisoners, we are running a health education programme and a drop-in health clinic and we are also renovating a hospital for poor children. And with a mobile Mercedes clinic we will be touring the countryside, bringing primary health care to people that need it, and looking after and educating abandoned children and reintegrating them back into family life where possible."

Other aid workers said child prostitution was a huge problem. Most of the street girls are engaged in commercial sex. I was told of one case where a child of seven worked with a pimp aged 10. The clients are almost all adult men. One 13-year-old gave birth in a sewer. She and the baby survived and were taken into care. The British organisation, Save the Children, which has been working in Mongolia since 1994, says there are about 200 child prostitutes, of whom 60 are registered with the police. The big fear is a HIV epidemic. In one recent survey of 114 young people between the ages of four and 20, 106 admitted they had had a sexually transmitted disease.

Life in Ulan Bator and small urban centres is so hard that many people are returning to the rolling steppes. The nomadic herdsmen, lovers of stories, drink and good horsemanship, live a life unchanged since the days of Genghis Khan, roaming freely in a country three times the size of France. After the break-up of collective farms, they were allowed to own more livestock and the number of animals in Mongolia increased from 25 million to more than 30 million. "If you work hard and look after your animals you can get rich," said a horseman 100 kilometres south of Ulan Bator, as he looked for a lost camel - a frequent problem on the unfenced grasslands.

That is not quite the experience of Natsag and Altangerel, a retired police official and his wife, who live on a gentle grass slope which is rich in buttercups and wild strawberries in summer. They have only one name each, as the communists banned surnames in 1921 to end clan allegiance. (The government is now encouraging surnames again but most people want to choose Borjiin, the family name of Genghis Khan). The couple invited me into their ger, a circular tent of felt and canvas with a conical roof and a couch, bed, sideboard and stools arranged neatly around a metal stove, but no television as they have no electricity.

After sharing some snuff, extracted from Natsag's ceramic jar with a long metal spoon, and drinking a bowl of fermented mare's milk, they spoke to me sadly about life after communism on the steppes of Mongolia. They have two small pensions and 20 sheep, 30 goats and 10 cows, many more than before the reforms, but "life is getting worse, and we just have enough to feed ourselves because flour and rice are so expensive and the money for goat hair is very little now," said Altangerel, who reared nine daughters, one of who is unemployed.

"During the Soviet period it was better for workers. The poorest are more poor now and the young can't find jobs." They did not want to go back to collectivisation but something had to be done. Said Natsag sharply: "Mongolians are lazy. They don't want to improve themselves, that's the problem."

"What about the teenagers spending their evenings in the new nightclubs in Ulan Bator, I asked Altangerel. "That's OK, within limits," she said. "The big problem is that, before, children respected their parents, and youth respected the public. That's not the case any more." She added, as she put dried cattle dung in the stove, "I have to say that before 1990 it was better from that point of view."

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