I was taken aback by this opener. Jargalsaikhan was one of Mongolia’s most famous capitalists and the owner of Buyan, the country’s largest private cashmere manufacturer. I’d come to discuss the troubled state of the wool industry. I’d yet to open my mouth. Momentarily at a loss, I stared past him out the window to the parking lot, where his black Humvee stood gleaming.

But Jargalsaikhan was not waiting for my questions. “A nuclear war wouldn’t be so bad for Mongolia,” he continued. “For China, yes, but not for Mongolia. We have lots of land and not too many people.” Jargalsaikhan was A Character. Mongolia likes characters, so he got plenty of ink in the newspapers. In addition to being preternaturally tall and gaunt, and driving the rutted streets of Ulaanbaatar in the gargantuan Hummer, he had his own political party, the Republican Party (which failed to win a single seat in the 1996 general election). He has an opinion on everything and was a vociferous, contemptuous critic of Mongolia’s Democratic Coalition government.

”The American Republican Party supports these thieves in the government,” he was telling me now, as the interview spun out of my control. “They are not principled men. They have little culture or education. They only care about money. There’s no democracy in Mongolia because of corruption and nepotism.

An interview with Jargalsaikhan, I discovered, quickly turned into a monologue about his pet hates (U.S. world domination, Chinese expansionism, the government) and his idiosyncratic passions. Chief among the latter seemed to be President Clinton – to whom he had sent several cashmere items via Madeleine Albright during the U.S. Secretary of State’s visit to Mongolia in 1998; he proudly showed me the letter of thanks he had received from the president’s office – and himself. He informed me that he would soon be in Washington and would be dropping in on Bill Clinton for a chat. “Imagine! The son of an ordinary nomad can meet the president of the United States and talk about politics.” He glowed with self-satisfaction.

Jargalsaikhan was one of Mongolia’s new import-export elite. He likes to tell the story of how he’d started out by selling Chinese jeans in Ulaanbaatar markets, though he tended to skimp on the details of how he’d been transformed, within a decade, from market trader to cashmere baron. His story was typical: almost all of Mongolia’s new business barons make their money in “import-export” (the export of raw materials and the import of consumer goods) rather than in manufacturing.

There’s precious little manufacturing in Mongolia these days. Soviet money, Soviet fuel, and Soviet parts built the factories and kept them running; now basic goods that were made in the country until a few years ago, simple things such as matches, must be imported. In 1997, as part of its economic liberalisation policy, the government removed all import duties. The result was a flood of hitherto unavailable luxuries.

I was surprised at how much stuff you could buy in Ulaanbaatar’s shops (for what, by Western standards, were extremely reasonable prices): a Mercedes or a four-wheel drive, a colour TV or electric ice-cream maker, a top-of-the-line laptop or a bottle of expensive French wine.

Clearly, this was all to the good. Clearly, too, there was a widening chasm between the small elite that could afford to buy these luxury items and the majority, who stared through the plate-glass windows of the Sony showroom on Ulaanbaatar’s main drag, Peace Avenue, in wonder.

All of the new businesspeople I met (and they were almost always men) in Ulaanbaatar’s beer bars and offices and conference rooms were, like Jargalsaikhan, bullish and self-confident. They never spoke about the thing that baffled me most – where their start-up capital came from, I don’t know. I do know that, for most of the 1990s, Mongolia’s fledgling commercial banking system was in a state of chaos. Several banks collapsed under the weight of bad loans. A number of bank executives were jailed. In 1998, the government-owned Reconstruction Bank was declared insolvent; millions of dollars in loans it had given were unaccounted for. I also know that, of $190 million in foreign grants and loans received by Mongolia between 1991 and 1996, $15 million was found – by the government’s own audit committee – to have been “improperly used”. Another $11 million was never repaid; millions of dollars more were simply missing.

I toyed with these thoughts as Jargalsaikhan gave me the approved version of his life story.

"I started out by selling copper scrap to Hong Kong,” he said. “Then I sold Chinese clothes and electronics to Russia and in Mongolia. I was testing out what sectors were profitable. Copper and gold have 5 to 10 percent profit margins. With cashmere, it’s 50 percent. Also, it’s an established business, and Mongolia has a lot of raw materials. So I started a cashmere factory.”

Cashmere, the downy-soft wool produced by goats, was a cushion for Mongolia’s economy in a tumultuous decade. The country produces almost a third of the world’s cashmere and is the second-largest global supplier of the wool, after China. Ulaanbaatar-based Gobi Cashmere, still one of the world’s largest cashmere producers, was one of the few state-owned firms to weather the first difficult years of transition…