ULAANBAATAR, Mongolia (AP) -- The United States is more than an ocean away, but to many Mongolians, it's a cherished neighbor and an ally for their struggling democracy.President Bush's planned stop Monday in subfreezing wintertime Ulan Bator -- the first by a serving U.S. president -- is widely viewed here as vital evidence of America's diplomatic and economic backing for the former Soviet satellite.Nearly 15 years after discarding communism, Mongolia -- a vast, sparsely populated stretch of deserts, steppe and mountains sandwiched between Russia and China -- is counting on that support to help counter the influence of its huge neighbors to the north and south."We need another big neighbor," said retired teacher Donjoo, who like most Mongolians uses only one name."Perhaps Mr. Bush's visit will bring in more aid," said his wife, Dungaa, who stood smiling and nodding beside him in a pink silk traditional robe and fuzzy white hat atop a monument to Soviet soldiers overlooking the Mongolian capital.Mongolia's pursuit of democracy and its support for the U.S. war against terrorism -- it deployed 120 troops to Iraq and about 50 to Afghanistan -- have clinched its status as an ally."My visit should send a signal to the people of Mongolia that you've got a friend in the United States and a friend in George W. Bush," the president said in a recent interview with Mongolian television station Eagle TV.But while this Buddhist nation of 2.8 million people holds democratic elections and allows Western-style freedoms, many worry that it risks being swallowed up economically by China.It's a terrifying prospect for the proud descendants of Genghis Khan, whose empire once reached as far south as Southeast Asia and west to Hungary.Despite economic growth that exceeded 10 percent last year, nearly 40 percent of Mongolians live in poverty. Inflation is a volatile 11 percent. International investment remains meager and the country's schools and health system have crumbled.A program to privatize industries, launched in the early 1990s, has put much of the wealth in the hands of a politically powerful elite, bound by vested interests and blood ties that so far have transcended efforts to fight corruption, critics say."It was a great opportunity when Mongolia broke away from the Soviet Union. They turned to the West instead of to China," said Morris Rossabi, an expert on Mongolia at Columbia University."But the results have not been particularly good," he said. "The agenda was for limited government and privatization. But this doesn't particularly suit Mongolia's culture and traditions."In the 1990s, poverty soared as Soviet support evaporated and workers lost their jobs in defunct or privatizing state companies. Millions of head of state-owned cattle and sheep were given to traditional herders, but many lost everything in droughts and harsh winters several years ago.While the newly rich in Ulan Bator drive Land Cruisers and live in modern apartments or villas, roughly half the residents are clustered in slums on the city's outskirts that lack plumbing, sewage or other public services.Many, accustomed to a nomadic way of life, find it difficult to find or keep jobs in a labor market increasingly crowded by Chinese migrants. Neighborhoods fester with alcoholism, domestic violence and other social ills, and anger over official corruption and abuse of power is growing."I worry that if this situation persists for another couple of years, there will be social unrest," said Dorjdari, an economist with the Open Society Forum, a think tank supported by billionaire philanthropist George Soros.China's influence over the economy has become overwhelming, eclipsing Russia in most areas except oil, which Mongolia continues to import from Siberia.Mongolians complain that the cashmere industry -- a major export earner -- is dominated by low-cost Chinese manufacturers. Local markets are crammed with Chinese-made food, clothing and shoes.In Ulan Bator, employers increasingly favor hardworking Chinese for jobs in construction and restaurants. Many of the city's private businesses are owned and operated by Chinese and Koreans."We can't hide from China," said Dorjdari. "Economically, we are totally dependent on China."Meanwhile, many Mongolians fear that the wealth from abundant mineral reserves, including a huge copper deposit recently discovered by Ivanhoe Mines Ltd., will profit foreign investors, not Mongolians.Given all those anxieties, the prospect of more American money, through a new U.S. aid program known as the Millennium Challenge Account, is a rare bright spot.The millions of dollars expected from the program could make a big difference for a country with a total gross domestic product of only $1.1 billion, and many here hope Bush will be bearing good news."Yes, I heard President Bush is coming to visit. Let him come, I'll let him wear my warm coat," said Galya, a 68-year-old grandfather. "I think it's good for Mongolia that he's coming."Copyright 2005 The Associated Press. All rights reserved.This material may not be published, broadcast, rewritten, or redistributed.