ULAN BATOR, Mongolia (AP) _ Under communism, Bayasgalan studied fungus. Under capitalism, she's used her scientific knowledge to build her own organic vegetable business.

The 35-year-old is in the vanguard of a budding army of Mongolian entrepreneurs cashing in on the impoverished landlocked country's nine-year transformation from the world's second oldest communist state to a free-market democracy.

Private enterprise is adding new life and color to Ulan Bator, the capital. New restaurants, bars and shops are opening. Food markets that offered only the odd potato or turnip less than three years ago now spill over with green vegetables.

``We own our own property, we make our own decisions, and the money we earn is our own. It is much better than before,'' said Bayasgalan, who like many Mongolians uses only one name.

A microbiologist by training, she studied fungus for eight years at the National Academy of Sciences. Fed up with irregularly paid wages, she gave up state-sponsored research in 1990 _ the year Mongolia began embracing the free market and democracy _ to farm her family's vegetable plot on the outskirts of Ulan Bator with her father.

Bayasgalan now employs three young laborers to help produce organically grown broccoli, rhubarb, onions, lettuce, tomatoes, cucumbers, spinach, turnips, cauliflower and five kinds of cabbage.

Small entrepreneurs are helping fill the economic vacuum created when the Soviet Union ended aid in 1990. Many state-run factories were forced to close and unemployment rose sharply.

The private sector is now bringing the jobless figure down. By the end of last year, nearly 430,000 people were employed by small private businesses, some 60,000 more than at the end of 1995, the U.S. Embassy says.

One of those employers is Jargalsaikhan, a former cashmere factory worker and black marketeer who started his own cashmere business.

``People didn't understand what it was like to have money,'' he said, recalling his days under communism selling Levis jeans, perfumes and records on the black market. ``They would arrest me, and confiscate the money, but I usually got it back.''

Jargalsaikhan claims to be one of Mongolia's first millionaires. His Buyan Cashmere company, started in 1989 with six employees, is now one of the country's wealthiest private enterprises, with 900 workers.