Mongolia and the United States have signed an agreement providing Ulaanbaatar with $285 million worth of developmental aid. In an interview with senior correspondent André de Nesnera, Mongolian President Nambaryn Enkhbayar talks about the accord and his country's political and economic development.

President Enkhbayar says democratic institutions in his country are taking hold.

"We have a multi-party system and we have a parliament very actively working and the government very actively working," said President Enkhbayar. "NGOs [non-governmental organizations] and newspapers and television channels expressing their views on the work we are doing as elected representatives of the people. So there are strong democratic institutions."

Free democratic elections were first held in Mongolia in July 1990 after decades of communist rule. And Mr. Enkhbayar was elected president in June 2005.

While his country is moving forward democratically, President Enkhbayar says it needs help in another area.

"In terms of economic achievements we still need better results - still unemployment and poverty is a main concern for the government of Mongolia, so we have to focus now more on economic development issues," said Nambaryn Enkhbayar.

Mr. Enkhbayar was in Washington to sign an agreement setting up U.S. development aid through the Millennium Challenge Corporation. The organization helps developing countries that enact specific political and economic reforms.

The Mongolian president says his country will now get $285 million over the next five years to help in such areas as education, vocational training, health projects and rail transportation.

Mr. Enkhbayar says his country also needs help to ease its suffering from the ravages of climate change. He says the three years from 1999 to 2002 were particularly grueling as Mongolia was hit by severe winters and devastating summer droughts.

" And we lost about 12.5 million heads of cattle," he said. "And if you presume that about an average of 200 heads of cattle per one family or one household in the countryside - it means that 60,000 families were left without their domestic animals. And if you presume that there are about - on average - four or five people living in one family, it means that 300,000 people out of 2.5 million people were left without any source of income."

Mr. Enkhbayar says for a land-locked nation such as Mongolia, the issue of climate change is not just a matter of debate - it has become an issue of survival.

On the foreign policy front, the Mongolian leader says he has to navigate carefully because his country's neighbors are China and Russia. He says through its so-called "third neighbor policy" Mongolia is expanding its relations with Moscow and Beijing.

Mr. Enkhbayar notes that this year marks the 20th anniversary of relations between the United States and Mongolia.

"20 years is enough time to show that Mongolia and the United States have become very good friends and we are grateful that the United States was always assisting us when we started all the changes in the early 1990s toward democracy and market-oriented economy," said President Enkhbayar.

The Mongolian president expressed the hope that in the next 15 years, his country would make great economic strides as it continues to strengthen democratic institutions.