Oliver Belfitt-Nash in Ulaanbaatar -

Since the Soviet puppet strings were cut 20 years ago, Mongolians have been left with the daunting prospect of feeling their way to a market economy. The road was hard for most, but for others with entrepreneurial flair the change opened up a new world of opportunity.

Ganhuyag Chuluun Hutagt personifies the transformation. Educated in Hungary in the communist era, he began as a floorwalker on the nascent Mongolian Stock Exchange before founding a highly successful microcredit bank, Xacbank (pronounced Khas-bank: a mix of Cyrillic and Latin letters). Most recently, he has become the main economic advisor to Mongolia's prime minister, Sukhbaataryn Batbold, and is the point man in the government's many international business relationships. "I'm a dreamer," Hutagt tells bne in an interview. "Many people discouraged me in the beginning, but most who've dealt with me realize I like doing what I say. I actually deliver on my promises, and I won't give up until I die. Even then I'll go down fighting, and I'll die with purpose."

It seems Hutagt was destined for a career in finance and got his first taste when he entered the Mongolian Stock Exchange aged 17 as a wide-eyed teenager in 1991. This makeshift privatisation vehicle let his creativity flourish. "I was part of something new, something special, and able to input my ideas and be heard," he says eagerly.

Tucked behind XacBank's HQ just off the Ulaanbaatar central square, Hutagt's office is lined with awards and honours from all over the globe. On one wall stretches a giant map of Mongolia, and facing it, another of the world. Sitting tall under the portrait of Mongolia's revolutionary leader, Demdin Sukhbaatar, Hutagt recounts his past dismissively, but answering questions on the future with enthusiasm. "We want to create a business-enabling environment, to protect private public partnerships, invite foreigners and international businesses to work here. We want our businesses to be modern, to transfer know-how, to train Mongols to operate in modern world. It needs to be fair and it needs to be green. At the same time we must be careful to make sure the inflow of cash does not damage our economy too badly," says Hutagt. "Damaging the economy can be managed, but damaging the mindset of the people can be irreparable."

National pride

Sandwiched between two great world powers, Mongolia has suffered a turbulent history, but throughout retained a deep-rooted sense of pride in its national identity. The glory days of Chinghis Khan still pervade the national psyche, creating a strong patriotic drive. Demonstrations earlier this year grew from a public unease over massive foreign investment into Mongolian's natural resources wealth. The giant Oyu Tolgoi copper-gold mine, which is now 66% owned by Canadian Ivanhoe Mines and will receive $3bn of investment over the next three years, is considered a flagship project by the government, but has been dubbed a cop-out by some.

Hutagt has a different opinion. "The Oyu Tolgoi deal was a good deal for Mongolia, but the next will be better," he says, referring to next year's privatisation of Tavan Tolgoi, considered to be one of the largest open pit coalmines on earth. "We are latecomers into the big game, and we've had time to learn. The superpowers stomped on countries like Hungary, Poland and Czechoslovakia, but we have had 20 years of preparation."

Hutagt is credited for coining the term "Wolf Economy" that is used to describe Mongolia's economic model, in contrast to the Asian Tigers and the Russian Bear. "We are not just another tiger cub," he insists. "Whenever people say 'wolf', they will think of Mongolia all around the world. Whenever they say Mongolia, they don't think Chinghis, they don't think poverty, they don't think ugly - they think wolf."

The idea is drawn from a Mongolian folktale that describes how the people are descended from a deer and a wolf, which in turn come from the sky, "Tenger". Hutagt has woven this legend into his own legacy, setting up the TenGer Financial Group and using the symbolic wolf to describe Mongolia's economic future.

However, not everyone is as optimistic as Hutagt. The country ranks near the bottom of Transparency International's corruption index (at 116) and lacks much of the infrastructure needed to export its raw material wealth. With only two years to go before the Oyu Tolgoi mine starts bringing in a wall of cash, some doubt the people will ever benefit from the country's newfound wealth. What's more, a strengthening green movement is raising serious issues concerning the moral and environmental consequences of extracting large quantities of coal.

Mongolia's investment opportunities have caught the interest of many international moneymen. Foreign direct investment is surging, expected to reach $450m in 2010, according to the central bank, in a $5bn economy. The next strategically important mine is preparing for an IPO next year is Tavan Tolgoi, owned by state resource company Erdenes MGL, which has been hailed as one of the largest open pit coal mines on earth. "Everything is here, ready" says Hutagt. "If you want to do business, you can start, invest, borrow. If you have a problem, you can voice your concerns. This is the new land of opportunity."