In November/December 2000 I worked in Kyiv/Kiev, Ukraine for the United Nations mission on the strategic re-launch of the mission website as a portal, whilst also advising the UN Resident Coordinator/UNDP Resident Representative Douglas Gardner on communications strategy. It was an extraordinary experience on many levels. It was a time when the Internet was fast evolving and required quick thinking and an ability to innovate; it was also a key moment in Ukraine’s history.
But despite those dangers and clear threats from the government of the time, there was a flourishing and inventive Internet and digital economy. The magazine Internet UA (whose editor I enjoyed meeting) gave a great overview of the scene in Ukraine and its creativity. Just as now, the creation of Internet stars who can exploit the medium (in this case sexy videos: a very large online market today) was driving viewers and subscribers. But there was also a vibrant online news media, blogging, commerce and gaming presence as well.
According to ain.ua, the Ukrainian digital economy today is ” … ‘local’ only just figuratively speaking. Ukrainian startups are initially focused on international markets. Product companies are included into international industry ratings. Outsourcing works with clients from all over the world. Global players enter Ukrainian market, opening R&D offices, acquiring and investing into local companies. There are no boundaries.”
It is easy to take digital freedoms for granted now but there was great resistance at the time and, unlike today, many governments were openly hostile to digital technology, online communications and e-commerce.
The UN itself was evolving and embracing the communications and design revolution being driven by digital change. This was the first “dot.com” boom, which had begun in 1997. I had played a key role in pioneering online content for Mongolia (1997-1999) and could bring this experience to Ukraine. In particular, I launched an award-winning web portal for the UN Mongolia mission in 1997 (www.un-mongolia.mn) and also the country’s first web magazine, Ger.
Key content created and launched on the UN Ukraine portal included critical information on the HIV/AIDS crisis in Ukraine, UN Ukraine’s first online magazine to explore perceptions of volunteering and NGOs in the post-communist period, and content preparing for the visit of the UN Secretary-General Kofi Annan, by showing how Ukraine was engaging with global development priorities, for example the eight Millennium Development Goals (MDGs), and bringing together UN agencies and entities into a cohesive web and “One UN” experience.
The power of the Internet and the digital economy to engage people, especially the young, despite living in a country with significant political repression of free speech and even physical intimidation and murder, stuck with me. This work also contributed to laying the foundations for Ukraine’s growing freedoms and greater engagement with Europe.
Paper delivered to the School of Politics and Government, Birkbeck College, University of London, London, UK, 2000
“The strongest is never strong enough to maintain his mastery at all times unless he transforms his strength into right and obedience into duty…Yielding to force is an act of necessity, not of will; at the very most, it is an act of prudence (Rousseau 1762).”
This paper analyses the following proposition: the key post-war institutions were neither an intended, nor an adequate, response to the economic and political challenges of the post-1945 world.
There is ample evidence to show that the plethora of post-war institutions were intended, and were a deliberate consequence of American policy-makers seeking to control the geo-political fallout of the most catastrophic conflict of human history, World War II.
In many respects institutions such as the United Nations, the International Monetary Fund and the World Bank were a sophisticated and modern approach to a new global order minus the old imperial powers. They were an act of significant imagination and inspiration drawn from a long tradition in asserting the rule of law over the rule of anarchy; the rights of the weak over the tyranny of the strong.
However, these institutions have repeatedly failed to meet the economic and political challenges of the past 55 years. The commitment of the United States to these bodies tailed off after World War II, and America displayed a lack of will to mature them beyond a dependence on American initiative and action.
There is substantial evidence to support the argument that the hegemony of Pax Americana over the last half century undermined the evolution of these institutions, sustaining a chaotic world order that has not delivered prolonged peace or prosperity for a large number of the world’s citizens and that these institutions were ill prepared to confront the collapse of the Soviet Union at the end of the 1980s.
This paper will explore the inadequacies of the global institutions to meet two key aspirations of the post-war world: conflict resolution and avoidance and economic prosperity based on free markets and democratic regimes.
I will argue that, while this period avoided a major conflagration on the scale of the world wars, it was not a period of peace. Regional conflicts, costly both in terms of human life and of finance, plagued every one of the years since World War II. This has been called a period of Pax Americana (Knutsen 1999). I will argue that, rather than a period of global harmony and prosperity anchored by the American hegemon, it has been a period of Pax Chaotica, a “macabre dance of death in which the rulers of the superpowers mobilize their own populations to support harsh and brutal measures directed against victims within what they take to be their respective domains, where they are ‘protecting their legitimate interests,’” as Noam Chomsky describes it (Chomsky 1995: 207). Pax Chaotica is a period in which there is an illusion of stability offered by a hegemon, but in which the hegemon’s military, economic and moral superiority is unable to secure actual peace and prosperity in the world. The hegemon is out of balance, its military and economic superiority in predominance, while its moral superiority and credibility wanes and withers on the vine.
I will analyse how adequate the global institutions were in the context of the concept of hegemony — in particular the hegemony of the United States, which has not relinquished this hegemony to the global institutions it initially set up. I will conclude that the 1990s has been a period of half measures, incremental attempts at bolstering the concept of international security by the community of nations, but that those attempts, as in the case of the Gulf War or in Kosovo, have been still under the direction of the United States.
Making up a master plan: The deliberate development of the institutions
The post-war master plan was comprehensive, and included the International Bank for Reconstruction and Development (World Bank), the International Monetary Fund, the International Trade Organisation (superseded by the General Agreement on Tariffs and Trade as the instrument of freer trade) and the United Nations. A clutch of security organisations was also established after the war, including NATO. As Knutsen aptly puts it:
WITH MEMORIES OF THE INTERWAR RECESSION AND THE NEW DEAL FRESHLY IN MIND, ALREADY, IN THE FIRST YEARS OF THE WAR THEY BEGAN TO DESIGN STABILISING POSTWAR INSTITUTIONS OF INTERNATIONAL FINANCE AND TRADE — THE IBRD, THE IMF AND THE ITO. … THEY SOUGHT TO SET UP THE MOST IMPORTANT POSTWAR INSTITUTIONS BEFORE THE CONDITIONS OF PEACE WERE EVEN RAISED. THEY RUSHED THE CONFERENCES ON THE UN, IBRD, IMF AND ITO INTO SESSION BEFORE GERMANY AND JAPAN SURRENDERED. (KNUTSEN 1999: 203)
The founding of the United Nations and the Bretton Woods institutions (the International Monetary Fund and the International Bank for Reconstruction and Development, later the World Bank) marked a turning point in world history. The United States had been attempting to exert greater control on the global order since the first 14 proposals of President Woodrow Wilson during World War I. As European powers declined at the beginning of the 20thcentury, liberal American policymakers saw an opportunity for the US to assert its hegemony over the world and re-write the rules of economic engagement along American lines. The two world wars only made the US wealthier and wealthier: in World War I, by providing armaments to both sides of the conflict; in World War II by joining with Canada as the armament and resource engine for the allied war effort.
In many ways, the new institutions represented a forward-thinking and idealistic policy compared to a global order marked by imperial rivalries. It captured contemporary ideas on economic theory, projected a universalist Lockean ideal that all men from all nations are equal, and it was injected with the idealism and energy of the world’s largest democracy and the strongest market economy.
Franklin Roosevelt, like Woodrow Wilson, saw America’s engagement in the world war as a struggle to contain European-style militarism, imperialism and exclusive trade blocs. America’s aim, in both wars, was to preserve the conditions for liberal world order — for a democratic system of politics and an economic system based on free-market principles. Wilson and Roosevelt both sought to liberalize world trade. And they both sought to use America’s leading position in world politics to bring other countries into line with America’s policy. (Knutsen 1999: 193)
These institutions ensured that the US had an influence on every facet of world affairs post World War II. It could merge its political and economic goals and ensure it had a stake in the recovery from the war. This played very well when it came to shoring up domestic support in the United States.
Under a World Bank controlled by Americans, development assistance could be focused precisely where America’s core corporations saw the greatest opportunity. And so long as the recipients of America’s foreign aid used it to buy American exports core corporations could venture into global trade confident of receptive markets. Through such means, the playing field of global commerce was sufficiently tipped in America’s direction so that by the mid-1950s even the National Association of Manufacturers could be persuaded to support tariff reduction. (Reich 1992: 64)
The institutions were philosophically strong, too. Learning from Machiavelli that human relations can be cynical, ruthless and riddled with power agendas, the United Nations offered a peaceful forum to resolve these disputes and a theoretically far more transparent alternative than what had come before. As Weber emphasised, modern states helped to promote capitalist development. With that in mind, the Bretton Woods institutions laid the groundwork for a global financial structure pegged to the US dollar and promoting an American view of free markets.
Hegemony theory and Pax Americana
I argue that these global institutions have shown themselves to be hampered and inadequate when faced with serious political and economic challenges. The root cause is a weakness that is most often cited as their strength: the United States.
Hegemonic stability has been characterised by the emergence of successive dominant liberal powers (Gilpin 1987: 66). What Strange calls “structural power” is essential to the establishment of hegemony over world affairs, since it “confers the power to decide how things shall be done, the power to shape frameworks within which states relate to each other, relate to people, or relate to corporate enterprises (Strange 1998: 25).”
The post-World War II global institutions are an excellent example of the intersection of politics and economy; institutions like the United Nations seek to wield influence in both the political sphere and the economic, most particularly through the Bretton Woods institutions. Hegemonic world order exists, Knutsen suggests, “when the major members of an international system agree on a code of norms, rules and laws which helps govern the behaviour of all. This agreement reflects the rhetorical skills of a particular great power (Knutsen 1999: 49).” This is what happened towards the end of World War II, as the United States wrote the new world order according to its own rules.
As further evidence of US supremacy, the new global rules were constructed so as to force America’s superpower rivals, the USSR and China, to join “its” institutions, not the other way around (though Taiwan stood in for the People’s Republic in the United Nations, against the protests of the USSR, until 1971).
The US became the hegemon because the Soviet Union had very little to offer, either in terms of economic assistance or of political freedoms.
Historians now understand that potential clients encouraged the United States to become a hegemon at the end of World War II: the term “empire by invitation” has come to characterize what happened. The Soviet bid for postwar influence lacked any comparable legitimacy, and so quickly came up against a condition that creates major difficulties for hegemons, which is lack of consent. (Gaddis 1992: 177)
Do as I say, not as I do: The rise and fall of the hegemon’s moral advantage
A large part of the credibility of the US hegemony was bolstered by its moral advantage vis-à-vis other nations. A heady cocktail of democratic freedoms, economic success and military might led many other nations to believe the US and its institutions had got it right where others had failed.
As Strange notes: “President Truman had followed up in his augural address to the Congress with the firm promise of American help to peoples seeking freedom and a better material life. Moral authority based on faith in American intentions powerfully reinforced its other sources of structural power (Strange 1994: 32).”
Supporters of US hegemony, like John G. Ruggie, believe the hegemon must be liberal-minded. Otherwise:
IF THE OTHER STATES BEGIN TO REGARD THE ACTIONS OF THE HEGEMON AS SELF-SERVING AND CONTRARY TO THEIR OWN POLITICAL AND ECONOMIC INTERESTS, THE HEGEMONIC SYSTEM WILL BE GREATLY WEAKENED. IT WILL ALSO DETERIORATE IF THE CITIZENRY OF THE HEGEMONIC POWER BELIEVES THAT OTHER STATES ARE CHEATING, OR IF THE COSTS OF LEADERSHIP BEGIN TO EXCEED THE PERCEIVED BENEFITS. (GILPIN 1987: 73)
The US steadily weakened its credibility and moral advantage in both the areas of conflict resolution and avoidance, and in promoting economic prosperity.
Conflict resolution and avoidance
The US was seen as willing to distort global institutions to fight its ideological — and real — battles with the Soviet Union, and its proxies around the world. The US’s credibility as a promoter of peace and security was severely hampered by the Korean War, the Vietnam War and a dubious record of support for undemocratic regimes and guerrilla movements. These conflicts were intended to “contain” the Soviet Union and the spread of communism and to support regimes that were friendly to free markets. This was played out in a cynical cat-and-mouse game with the Soviet Union, where both sides avoided direct confrontation with each other and used third countries to wage their ideological battles.
Gaddis takes an overly generous view of the Cold War high-wire act, but it is worth being reminded:
BUT THE 1950S AND 1960S DID SEE A REMARKABLE SEQUENCE OF POTENTIALLY DANGEROUS CONFRONTATIONS — DIENBIENPHU, 1954; QUEMOY-MATSA, 1955; HUNGARY-SUEZ, 1956; LEBANON, 1958; BERLIN, 1958-59; THE U2 INCIDENT, 1960; CUBA, 1961; BERLIN, 1961; LAOS, 1961-62; THE CUBAN MISSILE CRISIS, 1962 — EVERYONE OF WHICH WAS RESOLVED WITHOUT MAJOR MILITARY INVOLVEMENT BY EITHER SUPERPOWER. THE SAME COULD NOT BE SAID OF KOREA IN 1950, OR OF VIETNAM AND AFGHANISTAN LATER ON. (GADDIS 1992: 33)
Other than actually being drawn in as a combatant, as in the case of the Korean War, the UN became more of a sideline observer and critic than a robust resolver of conflicts. The UN was critically flawed from the beginning and abrogated its commitment to collective security. It also proved ineffective when confronted with crisis. As Strange points out, one of the biggest weaknesses in the founding of the UN was the Charter. In Article 2, Paragraph 7, all matters of domestic consideration were the business of a state, and in Article 51 states were allowed to form alliances for individual or collective self-defence, “thus reopening the door to a security structure based on alliances and counter-alliance rather than on collective responsibilities for the maintenance of peace between states (Strange 1994: 52).”
The UN was also hampered from developing a collective security maturity by the Security Council. The five permanent members used the veto to control resolutions, with the USSR and the US the most prolific abusers. The US had a total of 69 vetoes from 1945 to 1994; the USSR had 116.
The fall of the Soviet Union at the end of the 1980s marked the beginning of a new period of instability in large parts of the world. The spotlight is once again on the UN to become an arbiter of conflict; once again it is most active when it is pushed by the United States to act when the US feels there is an interest to be served. This has been the case in the major UN missions in the 1990s, from the Gulf War (oil reserves), to the former Yugoslavia (European security). The UN proved to be ineffective where there was no naked US interest putting pressure on the organisation to act, as in the case of Rwanda. Strange remarks that this has had a demoralising effect on those who seek a security structure upholding international law and the universal rights of man.
The fear that either the world organization would merely be the tool of one or other great power (as indeed it was the tool of the United States in the early 1950s) or that it would be ineffectual — as both the League and the UN have proved to be in the face of grave threats to international peace and order — have been enough to kill any realistic hopes of managing a transition from the present security structure to a multilateral or confederal one. (Strange 1994:52)
The second half of the 20th century has been hailed as a period of unprecedented global prosperity. Global gross national product rose from US $300 billion to US $2 trillion from 1945 to 1970 (Reich 1992: 64), though much of this was concentrated in a handful of countries. The major challenge of the 20th century has been the task of spreading prosperity around the world; to more evenly distribute the gains than can be reaped from advances in science and technology. The collapse of the colonial powers left large numbers of underdeveloped nations grappling with independence.
With the collapse of the Bretton Woods arrangements in the early 1970s, and the emergence of deregulation in financial flows in the world, the US abrogated much of its responsibility for micro-managing global development. The market was now to do all the work, and being the modern age, rapid capital flows were to make the market work efficiently.
Like the experience with conflict resolution and avoidance, the economic project has been mixed. A dependence on the market has not avoided a dependence on the economic fortunes of the global hegemon. As the US ship rises and sinks, so does the rest of the world. The Global economic system, Panic notes:
WAS RUN BY THE DOMINANT ECONOMIC POWER AFTER THE SECOND WORLD WAR: THE UNITED STATES. IN THAT SENSE, ITS FORTUNES, LIKE THOSE OF THE CLASSICAL GOLD STANDARD, WERE DIRECTLY LINKED TO THOSE OF THE RELATIVE ECONOMIC PERFORMANCE AND POLICIES OF THE COUNTRY RESPONSIBLE FOR THE LARGEST SHARE OF WORLD INDUSTRIAL PRODUCTION, TRADE, AND FINANCE AT THE TIME — PRECISELY THE OUTCOME THAT THOSE ATTENDING THE BRETTON WOODS CONFERENCE HAD BEEN ANXIOUS TO AVOID. (PANIC 1995: 46)
By 1994, total world exports were more than 14 times greater than in 1950; output was five times greater than in 1950 (Dicken 1999: 24). But the economic achievements ring hollow if the well-being of the whole planet is taken into consideration. By 1995, 60 percent of the manufacturing in the world occurred in three countries — the United States, Japan and Germany (UNIDO 1996). While manufacturing in developing countries had quadrupled to 20 percent of global output, it was concentrated in a few developing countries with strong ties to the US.
There is a direct connection between US interests and who does well economically. Western Europe was reconstructed rapidly with US money, and Germany became an industrial powerhouse again. The defeated Japan was restored as Asia’s wealthiest nation with American investment and advice. In 1945, 71 percent of world manufacturing was concentrated in four countries. Developed countries were host to 2/3 of foreign direct investment (Dicken 1999: 21). Most FDI is now concentrated in industrial, developed countries.
There is a direct link between the failures of the UN and the global economy. The weakness of the international security arrangements also have an impact on economies. Vast sums of money are re-directed towards weapons purchases and away from human needs. For many smaller economies, this is a punishing drain on national resources and the funds are often borrowed from elsewhere. As Chomsky noted in the 1980s, “The fact is that both of the superpowers — and many lesser powers as well — are ruining their economies and threatening world peace, indeed human survival, by a mindless commitment to military production for themselves and for export (Chomsky 1995: 209).”
There are concrete examples of developing countries that have achieved significant development gains, reaping the gains of peace and freer world trade. A group of 18 developing countries enjoyed growth rates in the 1990s of over five percent (DFID 2000: 66). This is attributed to more open trade policies compared to other developing countries (though many other countries have been equally open to trade, like Mongolia, but have not reaped the same benefits). China has enjoyed unprecedented growth, but it also has increasing rates of unemployment and violent unrest in its western regions. Sub-Saharan Africa’s 600 million population generates exports no greater than Malaysia’s 20 million (DFID 2000: 67).
In regard to the World Trade Organization (WTO), the majority of its 140 members are developing countries. Not a perfect organisation, its agenda is dominated by a few wealthy nations, but the alternative of a world of bilateral trade deals hangs as a spectre if it fails. As the DFID report, Eliminating World Poverty: Making Globalisation Work for the Poor, points out:
DESPITE PROGRESS OVER THE LAST 50 YEARS, DEVELOPED COUNTRIES MAINTAIN SIGNIFICANT TARIFF AND NON-TARIFF BARRIERS AGAINST THE EXPORTS OF DEVELOPING COUNTRIES…TOTAL DEVELOPING COUNTRY GAINS FROM A 50 PER CENT CUT IN TARIFFS, BY BOTH DEVELOPED AND DEVELOPING COUNTRIES, WOULD BE IN THE ORDER OF $150 BILLION — AROUND THREE TIMES AID FLOWS. (DFID 2000: 69)
The postwar world order and the use of global institutions to build it, was a deliberate policy of the United States. It, however, proved only a half measure and the over-dependence on the United States ensured that these institutions were hampered when confronted with economic and political crises. As I have argued, a state of Pax Chaotica was the result.
For Pax Chaotica to end, there needs to be a renewed effort by the United States to shore up global institutions and to develop a concrete plan to ensure that the global institutions become the global hegemon in every sense of the word. There have been incremental moves in this direction, including attempts to pay dues owed by the US to the UN.
There needs to be a complete shift from the realist American interests of Pax Chaotica to the interests of the community of nations. In fact, there is an opportunity for a convergence of core American values — respect for individual liberty, freedom of expression, democracy — with the goals of the global institutions.
As for international institutions, they must show themselves to not only be just, but also to be seen to be just. Institutions can no longer work in the shadows as they have in the past. Well-educated, wealthy protesters in Western countries will no doubt continue to demand transparency.
Muslims say peaceful alternatives will aid cleansing
By David South
Now Magazine (Toronto, Canada), May 13-19, 1993
While Bosnian Muslims continue to demand either airstrikes against the Serbians or weapons to defend themselves, there is little consensus among Canadian peace groups and political parties that these measures are the key to a long-lasting peace.
The differences are as graphic as those between Washington and Ottawa. While president Bill Clinton is asking European nations to support air strikes, prime minister Brian Mulroney has publicly opposed such bombing raids as an answer to the brutal ethnic cleansing of Muslims being carried out by the Serbs.
“We are still developing our position in terms of support for military intervention,” says Roxanne Dube, assistant to Liberal foreign policy critic Lloyd Axworthy.
Dube says, “We need something more comprehensive than just airstrikes, which alone could jeopardize our troops.”
NDP foreign affairs critic Svend Robinson is more willing to consider military action under UN auspices. But first he wants “a vice-like embargo on Serbia and the establishment of safe havens and humanitarian corridors.
“If the slaughter continues, I personally would not exclude the posibility of further military action,” he says.
“The response of the United Nations, and NATO in particular, has been appallingly inadequate. It has allowed the Bosnian Serbs to consolidate their territorial position. And their latest sabotage of the Vance/Owen proposal has left the international community with no alternative but to isolate Serbia.
“The Bosnian Serbs are just continuing their widespread rape of Muslim women, ethnic cleansing, torture – the world has got to say, stop.”
Among peace groups there is a feeling that military intervention is not a longterm solution.
“We don’t have a position,” says Tamara Storic of Greenpeace Canada, a response echoed by the Toronto Disarmament Network. “We’re in much the same situation as the UN. Nobody knows what to do.”
The Canadian Peace Alliance’s Gideon Forman understands the frustration that fuels calls for bombing, but doesn’t believe it is a longterm solution.
“Those who say go in there and bomb are not all crazy,” he says. “They hear about ethnic cleansing, they hear about rape camps – and they see bombing as a way to stop that. But our position is that a little more restraint has to be shown.”
He advocates a combination of sanctions and diplomacy for a longterm peaceful solution.
Maggie Helwig of ACT for Disarmament says she has little to offer in the short term, pointing out, “Maybe at this point there is little anyone can do.” She is also sympathetic to those who want to arm Bosnian Muslims, but feels it wouldn’t help the situation.
She says, “I believe they are the legitimate government. But providing weapons is not going to contribute to a lasting peace.”
Helwig favours targeted sanctions that would allow opposition organizations in Serbia to receive supplies while the government wouldn’t, combined with international support for peace and opposition groups.
“The only way we can end the Serbian aggression to to support the opposition in Serbia, the peace movement and the women’s movement. The reason they aren’t having much influence is that they aren’t getting any international support.”
Fatima Basic, spokesperson for the Canadian Bosnian refugee groups, says that while she supports Helwig’s plans for helping opposition and women’s groups, she is angry that it is being put out as an alternative to military intervention and air strikes. She says the West “should have done something before we lost half a million people.”
Imam Tajib Pasanbegovic, religious leader of Canadian Bosnian Muslims, says of Helwig’s thoughts, “It’s a ridiculous idea by itself. It will take several years, and by then there will be no Bosnian Muslims left. There is not time. Imagine if we gave this chance to Hitler in the second world war – another 5 million Jews would have disappeared.”
Both he and Basic are bitter that while Clinton seeks European support for bombing, “Prime minister Brian Mulroney is going behind his back telling the world not to interfere.”
Pasanbegovic says if the West will not intervene with at least half the bombing if did in the Gulf War, “They should life the arms embargo and return things to a starting point. If the West is not going to defend us, at least let us defend ourselves.”
However, Carolyn Langdon of Voice of Women, a peace group working with peace and women’s organizations in the former Yugoslav republics, says, “Our position is against intervention, including limited military strikes. We are supporting the civil society groups, the opposition against the nationalism and war policies of their governments.”
Her group sets up rape crisis centres and sponsors women to come to Canada to raise awareness.
David Isenverg, a senior research analyst at the left-leaning Washington-based Center for Defense Information, says sources tell him that the Clinton administration believes air strikes are only a means of levelling the playing field for the Muslims.
He says a Pentagon report released this Wednesday will discredit the claims of air strikes’ accuracy, citing failures during the Gulf War. Clinton will decide on air strikes after Saturday’s referendum in Bosnia, when Serbs will vote on whether to accept a Western peace plan.
Background: The Partnership for Progress brochure raised the curtain on UNDP’s programme in Mongolia and my work heading UNDP Mongolia’s Communications Office. I led the Office from 1997 to 1999, garnering awards and praise for the quality of the offline and online resources.
A Partnership for Progress
“For years we were under the domination of foreign countries. So really, Mongolia is a new nation.” With these words, Prime Minister M. Enkhsaikhan described the enormity of the task ahead for Mongolians. While Mongolia has been an independent nation for most of this century, this has not been the case with its economy. Just as a new democratic nation was born in the 1990s, so Mongolia’s economy lost the large subsidies and trading arrangements it had in the past with the Soviet Union. The time to learn about free markets and the global economy had arrived.
Under socialism, Mongolia was dependent on the Soviet Union. Prior to the socialist revolution in 1921, the country experienced hundreds of years under the influence of the Chinese. It is only since 1990 that Mongolia has had an opportunity to build the foundations of an independent economy and political culture. But it takes money and know-how to make the transition work. This is the kind of nation-building support the United Nations Development Programme (UNDP) specializes in. UNDP’s fifth country plan for Mongolia has come to an end, and in cooperation with the Mongolian Government the sixth – the Partnership for Progress – has begun.
Meeting the challenges of transition
The international community rapidly responded to Mongolia’s needs in the early 1990s. Along with the large international donors, the UN system is playing a pivotal role with UNICEF, UNFPA, WHO and UNDP to assist in the country’s social reconstruction. Other agencies now operating in Mongolia include UNESCO, UNV, UNHCHR, World Bank and the IMF. The UN’s capacity to coordinate, not only within the UN family of organizations, but also with donors and the international NGO community has proved extremely useful in mobilizing the technical assistance needed at this critical time. The goal is capacity building, or the transformation of both the human and economic resource base to fit the economic and social demands of transition.
UNDP’s Partnership for Progress with the Government of Mongolia serves as the framework for assisting the Government to combat the worst effects of poverty and social disintegration brought on by economic transition. The programmes and projects mounted with UNDP assistance not only tackle the lack of material resources, but also the dearth of practical experience in the strategies and methodologies required to nurture open government and encourage democratic procedures, protect human rights, preserve the environment and promote the private sector.
Mongolia is a large country with poor infrastructure. This means it is not only difficult to transport food or make a phone call, but also to develop and deliver programmes that reach the entire country. It is through the expertise of the UNDP, drawing experience from around the world, that these obstacles to a market economy and an open democracy can be overcome.
UNDP has had a country office in Mongolia since the 1970s. UNDP’s resource mobilization target for the five year programme from 1997 to 2001 is US $27.5 million, with 45 percent to be directed to poverty alleviation, 30 percent to governance and 15 percent to environmental protection. With this material input and the goodwill it generates, the Mongolian Government can design appropriate social and political structures to support their efforts in seeking lasting solutions to the problems brought on by transition. Mongolia can then become an equal player in the global community of the 21st Century.
UNDP in Mongolia
The UNDP’s programmes in Mongolia follow the global principle of helping people to help themselves. Through a close working relationship with the Mongolian Government (the Partnership for Progress), UNDP personnel work with many thousands of Mongolian counterparts in government, academia and NGOs all over the country. In addition, UNDP has a large contingent of United Nations Volunteers (UNVs) deployed in Mongolia. There are over 27 international UNVs working in all UNDP programme areas and further 26 national UNVs working as community activists to foster participation in the poverty alleviation programme. Another six national UNVs are involved in the UNESCO/UNDP decentralization project.
A peaceful transition
The transition in the 1990s from socialism to democracy and free markets has profoundly transformed the country’s political and economic character. Mongolia is a young democracy that is also a model for bloodless political revolution. Today, this participatory democracy boasts scores of newspapers, dozens of political parties and a vigorous parliamentary system. On the economic front, a command-based economy has been replaced by free markets. But there has been a high price to pay in social disintegration and dysfunction, as the former social supports disappear and their replacements fail to “catch” everyone. As with all social upheaval, vulnerable groups – the elderly, the young, the weak – bear the brunt of the social and economic shocks as the old gives way to the new.
The bubble bursts
Before the 1990s, the Mongolian economy was totally dependent on subsidies from the Soviet Union. The state owned all means of production and private enterprise was foresworn. Farmers and herders were organized into cooperatives. Factories had more workers than they needed. Wages were low but no one starved. The state provided for the basics of life – health care, education, jobs and pensions. Free fuel was provided to get through the severely cold winters, and during blizzards lives were saved in stranded communities with food and medicine drops by Russian helicopters.
The bubble burst in 1991 when the Soviet Union disintegrated and the subsidies came to an end. Prior to this, communist countries accounted for 99 percent of Mongolia’s imports and 94 percent of its exports. Mongolia’s economy suddenly lost its buttress and immediately collapsed.
A sense of freedom
Although the economic picture was bleak, politically Mongolians rejoiced and embraced the principles of Western parliamentary democracy. A new sense of political and personal freedom took hold. Freedom of religion ensured a revival of Buddhism. Monasteries sacked and razed under the Communists were restored and religious observance once again became part of daily life.
Collectivization began to give way to free markets and privatization. A voucher system was used to redistribute the assets of many state-owned entities. Each citizen was issued with vouchers to the value of 10,000 tugrigs (at the time worth US $100). They could be bought and sold like shares of stock.
Livestock was privatized and previous limitations regarding ownership of animals were lifted. As a result, the composition of herds changed and the numbers of animals soared to the highest levels in 50 years. While the collapse of the state sector has led to severe hardship, many nomadic herders who astutely manage their herds are self-sufficient in meat and milk. Many continue the old energy saving ways, including collecting dung for fuel and using their animals for transport. Some find it possible to live almost completely outside the cash economy.
The spectre of the worst aspects of market economies soon loomed for many who had known only a poor but predictable life under a command economy. Suddenly unemployment, inflation and reduced services became the norm. Previously reliable export markets in the newly constituted Commonwealth of Independent States disappeared entirely, leaving a ballooning trade deficit and a plummeting tugrig. The fall in global prices for cashmere and copper have only exacerbated an already critical situation.
Poverty and starvation hit with a vengeance. According to Food and Agriculture Organization (FAO) figures, a third of the population now lives at starvation levels. The demise of collectivized farming has contributed to both a shortage of food and reduction in food self-sufficiency. Thousands of homeless children work, beg or steal in the streets of the capital, Ulaan Baatar. Many descend into the sewers for warmth to escape the subzero temperatures that prevail for most of the year, while others seek refuge in the few children’s shelters in the city.
Unemployment is high. Women are particularly vulnerable, with more than 100,000 summarily removed from the pension rolls at the beginning of 1997. The retired, whose pensions have decreased dramatically in value are also in severe distress, with almost all relying on their families, friends and neighbours. Those without such support are left to live a precarious existence.
To reverse a rapidly deteriorating situation, the Government instituted a six-year National Poverty Alleviation Programme (NPAP) with the primary objective of reducing poverty by 10 percent by the year 2000. Designed with assistance from UNDP, donors and Mongolian NGOs, the NPAP is founded on new principles unseen before in Mongolia. Responsibility is decentralized, with each of the 21 aimags (provinces) having a local Poverty Alleviation Council with responsibility for identification, formulation and appraisal and approval of projects. Thus the people of the area can respond to local needs – identify them, propose solutions to problems and act to determine their own futures.
The Mongolian National Poverty Alleviation Programme addresses a wide range of social issues, including income poverty and the crisis in the health and education sectors. Solutions to such urgent social welfare problems are a high priority for the Mongolian Government – and international assistance is critical. The introduction of fees for health and education services that were previously free has placed an unbearable financial strain on some families. School drop-out rates and truancy are problems in both urban and rural areas. The costs associated with general maintenance and heating of public buildings adds another financial burden in the transition period.
Emphasis on women
A US $10 million soft loan from the World Bank for the period 1996 to 1999 supports Mongolia’s efforts to follow up on the commitments of the World Summit for Social Development, the Fourth World Conference for Women and other recent global initiatives.
The NPAP institutional framework focuses on explicit measures to alleviate poverty by attending to sustainable livelihoods, employment creation, gender equality, grassroots development and human resource capacity building. Mongolia’s historically high levels of literacy, health care and education auger well for the future of this approach, in spite of the many obstacles facing the people.
In addition, the Women’s Development Fund and the Social Assistance Fund have mobilized national NGOs and international donors for both income generation schemes and distress relief for the vulnerable. The success of women in actively implementing projects with the help of the various funds is a testament to the strength and resilience of ordinary Mongolians.
Working with the National Poverty Alleviation Programme initiatives, the UN System Action Plan and Strategy provides technical assistance and capacity training to realize the objectives of the national programme.
In all, eight new projects are on the agenda for 1997, including credit provision, skills and vocational training, water and sanitation provision, urban renewal, pre-school education and one capacity building project at the institutional level.
Freedom of information
Under the Partnership for Progress, UNDP is working with donors and international NGOs to promote and foster a participatory democracy. A key component of good government and democracy is the free flow of information. That is why UNDP has placed a significant portion of its resources into ensuring government, NGOs and citizens have access to the state-of-the-art computer communications technology, especially the Internet and e-mail. The Governance and Economic Transition Programme will have nine new projects by the end of 1997: seven to support national reforms in government and the civil service, two to support journalists as they come to grips with their new responsibilities in a democratic society, and one in the tertiary education sector, following a series of faculty-strengthening education projects that have been ongoing since the early 1990s.
The Consolidation of Democracy through Strengthening of Journalism project offers direct support to working journalists.
Six journalism centres throughout the country offer hands-on training courses and access to news and information from international and Mongolian sources.
At the aimag level, Citizen Information Service Centres will be custom tailored to the information needs of each aimag’s residents. These centres will increase the free flow of information from the capital, which is currently hampered by poor communications infrastructure.
Decentralization, governance and economic transition
The Government has wisely foreseen the need to engage in a fundamental shift in how Mongolia is governed. Not only should it provide institutions that can address the social and economic shocks of the 1990s, but it also must provide a stable and efficient policy to ensure a prosperous and secure future for Mongolia.
Decentralization in government administration is a cornerstone of the Government’s policy to make managers of public services more responsive to local people’s needs. In an ambitious programme to decentralize and consolidate democracy in Mongolia, the Government has promised to devolve decision-making more and more to the local level. The UNDP plays a key role in ensuring this process continues and that local politicians acquire the skills necessary to handle these new responsibilities.
A respect for nature
Mongolia’s flora, fauna and unspoiled landscapes are at a watershed. Mongolians have traditionally had a respect for the natural environment as a source of food and shelter from the harsh climate. These close ties have meant that environmental preservation and respect for nature form an integral part of cultural traditions. As far back as the reign of Chingis Khan in the 13th century, Mongolia has had nature reserves. The new social and economic imperatives have put a strain both on these traditions and the environment, with a corresponding stress on Mongolians.
Semi-nomadic herding still forms the backbone of the country, and the pressures of the 90s have only re-enforced this. Many Mongolians have turned to herding as the only guarantee of a steady supply of food and economic well-being.
The environment is regularly challenged by natural disasters. In 1996, a rash of forest fires destroyed large swathes of land and caused extensive economic and environmental damage. Floods, heavy snowfall, extremely low temperatures, strong winds, dust storms, and earthquakes are all natural hazards for Mongolia.
Keeping Mongolia green
UNDP’s mandate in environmental protection and preservation is reflected in its support to the Government. As Mongolia addresses the challenge of up-holding international conventions to which it is signatory, it must sustain and preserve a decent and dignified lifestyle for all its citizens.
In the area of disaster management, the Government is emphasizing preventative measures as much as relief. UNDP support is focused on an extensive campaign for preparedness, technical support and capacity building to deal with both natural and man-made disasters.
The flagship programme for the environment is the Government’s Mongolia Agenda for the 21st Century (MAP 21). The Government’s continuing biodiversity programme, under the auspices of the Global Environment Fund (GEF), has already shown results, with the on-going mapping of the country’s biodiversity for future generations.
Two new projects were initiated in 1997: the Sustainable Development Electronic Information Network reaches out to people in remote and isolated locations. The Energy Efficient Social Service Provision Project has introduced straw-bale construction, an environmentally-friendly, energy-efficient and pollution-reducing building technology. This technology uses straw for insulation within the walls of buildings. Schools and health clinics will be built with straw insulation by work crews trained by the project.
The environmental challenges Mongolia faces are acknowledged by the world community as both requiring a global and a national commitment. UNDP acts as conduit for a number of globally-supported programmes focused on local action. The axiom “think globally, act locally” is the principle guiding the UNDP/Mongolian Partnership for Progress’ environmental activities.
Note: Mongolia was experiencing ‘shock therapy’ during the 1990s, as well as austerity, in response to the collapse in subsidies and state supports when trade relationships with the Soviet Union ended.