Rights and Resources Initiative Logo, Used with permission.

Lourdes Gomez:
Rapid globalisation makes competition for land, raw materials and other resources intense. When the stakes are so high, can rural, indigenous peoples and urban, industrialised communities both benefit from resource extraction? Or is this situation a zero sum game?

Andy White:
I think they can definitely benefit, both directly and indirectly. Directly they can benefit from either revenues and incomes or the social and political development that can come with sound development. But of course that’s not always what happens, or frequently that does not happen. I don’t see it as a zero sum game, I think it’s a challenge that can be managed for the betterment of both local and global citizens as well as the company.

Forest dwelling tribes, Rajasthan, India. Photo credit: Society for Promotion of Wastelands Development (SPWD), India.

(LG Comment)
With more discussion, this issue emerges as a much more complex and multi-layered one. It has many levels; national and international, it has many players and it has many influences both internal and external, as Andy White discusses with me further…

AW:
Well, there’s a third major player in this match, and that is the government itself.  Frequently, the government inappropriately sides with the investor without adequately protecting the rights of its citizens, so ensuring that governments play the right role is important as well and critical.  Let me put it this way: It’s difficult for the investor alone to do the right thing, or do enough of the right things, and do all that is required.

Of course protecting the rights of citizens, ensuring national and international standards are followed, that there’s independent monitoring; all of that is not the role or job or expertise of the firm itself. They need to implement these, but it’s not their primary responsibility to understand the rules and obey them – well, certainly it is their responsibility to obey them, but not to proactively seek out and independently verify (that these standards are being met). I think it’s critical that the governments play their role, and frequently that is the weakest link. When the governments aren’t there to play their role, then there are plenty of private sector investors that are happy to abuse the relatively lawless situation. And of course there are many good actors, but there are a lot of actors that are eager to take advantage of the poor governance. What can be done by the private sector is to adhere to the high standards of free, prior informed consent. They can respect property rights, ensure sincere consultation and participation in the advisory (work) and the governance of the business in the local area.

I think there’s emerging best practice. There are some people over at the IFC (International Finance Corporation) that run a program that identifies and tries to encourage best practice investors in the mining sector, and they regularly do conferences etc.

(LG Comment)
Greater governance and sincere consultation with local communities are key steps towards reducing risk and avoiding escalation of conflict in communities impacted by infrastructure/mining projects – but what does this look like in real terms?

AW:
So there’s an emerging body of knowledge, it’s just frequently not implemented because governments don’t play their role, indigenous people aren’t really fully aware of their rights and what tools they have access to, and companies are either ignorant or unwilling to apply these models.

LG:
You would recommend that government play a stronger role in bringing these two parties “to the table”, as it were?

AW:
Absolutely. And also, first, make sure that everyone understands what the standards and the legal obligations are. Secondly, ensure that there is some independent verification of performance and compliance that is both independent and balanced. Of course governments are very eager for the revenues. We understand that, and they have to put their national good in mind – or perhaps I’m being too generous; they often do. There’s also local corruption, which is frequently the case in these mining operations. All these natural resource investments take place in rural areas where governance is weak and in countries where governance is weak, so corruption is frequently a problem. The governments can require transparency, adopt the EITI (extractive industries transparency initiative), they can require that all investors do so, they can ensure that there’s independent monitoring of compliance; there’s lots that governments can do. I think there’s a valid argument now that the demand is so great, and supply is so relatively limited, that investors will invest even with higher standards. There has been a fear in the past, of the race to the bottom – the fear that if one country adopted standards then the investor would run off to another country. I think, and I’ve seen evidence in the market research recently, that that’s no longer happening. I just read an article yesterday in a mining magazine that was saying that Newmont that was going into Haiti. Apparently they’d said “look, you know, the governance here is lousy, but look, the geology is great, so we’re still gonna go in.” It’s hard to find a more messed up place than Haiti.

LG:
So in these kinds of situations, what can the global community do to ensure best practice? Are there any frameworks that you would recommend or any actions that you would recommend to ensure that best practice can be implemented?

AW:
I think initiatives like EITI and Publish What You Pay are critical, and I think increasingly governments can use their purchasing power and their own rules to ensure that they don’t import illegal minerals, just like they don’t import illegal wood or other products and use them in their public purchasing. So there are two steps there: one, ensuring legal minerals and that mining adheres to highest standards; and secondly, use purchasing power of governments so that governments don’t buy illegal or unsustainable – or socially unsustainable – minerals. Those are two major levers that have not really been applied yet in the mining sector, and I think it should be considered.

LG:
What do you think about the current system in terms of international frameworks on best practices, does it take enough into account the interests of indigenous or forest or tribal communities?

AW:
No. Absolutely not. And the key problem is that in many of these countries, the land rights and the resources rights of the indigenous tribal communities are not yet formally recognized. They’re not recognized by all governments and actually implemented. So as you know, in many of these countries most mining now takes places in rural or remote areas. Those are the same areas where many indigenous and other rural, usually politically-marginal people live and have lived for millennia. But in many of these countries, the governments still claim that land as government land and the resources as government-owned resources, even though they’ve signed international conventions that say that they need to respect the rights of indigenous communities. Many countries have not yet done even that, but it’s actually a mixed bag: in some countries there are parts of the government, like the ministry of cultural affairs or something, they might have a rule or a law that says there must be consultation, but the ministry of mining might not follow that rule. So there are a lot of internal inconsistencies within governments as well.

(LG Comment)
According to Andy White, there are definite benefits to be had by all parties but there must be proper and sincere consultation with local communities and particularly, the terms of how these projects are carried out may not be co-ordinated so freely by the firms as is currently conducted.

With greater government involvement, the industry itself can gain a greater sense of accountability and transparency and ultimately perform much more effectively and avoid significant risks associated with poor performance.

Forest dwelling tribes, Rajasthan, India. Photo credit: Society for Promotion of Wastelands Development (SPWD), India.

AW:
So lack of recognition of rights, lack of knowledge of recognition, and lack of implementation of enforcement and compliance with those rights is a huge, huge problem. And that is indeed the key cause of the conflicts that emerge. The Conga Mine consultation that is ongoing right now in Peru is a great case in point. I think what’s interesting now and why your article is timely, is that these conflicts are reaching a head. They are coming to a greater scale, and that’s both because of increased demand and because of the increased capacity of aboriginal people … (unclear) … they’re more knowledgeable, and they have more access to political opportunities.

I think this is just the tip of iceberg, because neither of the trends is about to slow down, they will only increase. So that’s what we’re witnessing right now. And this is not only bad for indigenous peoples – forced assimilation … (unclear) … (unclear)… it’s also bad for the company and bad for the governments. Companies risk losing lots of money, so there’s not only moral or ethical issues here but for companies there’s financial and reputational risk issues that I think are awfully underestimated.

Governments too face major political risks. Again, I don’t know if you’re following the cases ongoing now in Peru … (unclear) … the government and the newly elected president. In Bolivia last year when there was a road that was … (unclear) … It was a major political fiasco for the government of Evo Morales. So this is not only bad for local people – of course they’re the ones that suffer most personally – but this is a no-win situation, this current business-as-usual. This is a no-win situation for governments or global investors in mining and other infrastructure projects.

I guess a second important thing to keep in mind from my perspective is that the impacts on local people are not only in the direct footprint of the mine. They’re also directly impacted by the road or the rail that are on the way to the mine, or from the mine to the port. That’s often a whole other set of people that are frequently not considered. The roads and rail and infrastructure of the operations themselves often create tremendous damage, and not only indirect environmental damage but also social-political disruption that can transform those communities. In addition to those direct impacts beyond the footprint, for all of those people both in the direct site and on the road to the site, investment in mining has tremendous social, economic and political impacts. It’s really transformative on health, etc., etc. It’s really completely transformative and it’s not only in the direct site where the mine takes place.

LG:
Actually, that makes me question … you mentioned before there’s a kind of forced assimilation of indigenous tribal communities into what we would classify as a modern Western lifestyle, and one of my questions would be: How would you demonstrate, or how would you propose, that we can benefit from saving indigenous and tribal communities for the future of our planet?

From my perspective, there’s certain skills, knowledge and understanding of the environment and ecology and even social ordering that indigenous tribal communities have, and that we may not be recognizing because of this forced assimilation or this project of rapid urbanization. How would you promote that these skills and knowledge be adopted?

AW:
Two fronts. #1 – much more direct interaction and consultation between communities and the investors and company officials about the bigger and broader implications. Frequently, my read is that the company officials talk about the more direct impacts and are knowledgeable about the more direct impacts, but not the broader social/political effects of the new investment. What will it mean? Either they don’t know or perhaps are not honest about the transformation that is likely to take place. So #1 is much more consultation and consideration of the bigger, broader transformation and making adjustments – considering opinions about that and making adjustments.

(LG Comment)
According to Andy White, there are definite benefits to be had by all parties involved. It is not only necessary but also absolutely realistic to think critically about what “benefits” means in the broader objective of reaching “sustainable development.” Does this mean we abandon the “development project”?

AW:
In my experience, many local people want some kind of development, unless they are completely uncontacted. It’s not like they don’t want a microwave oven or electricity, but of course on their terms and their way and at their rate. So they are not opposed to a job for their kid, school for their little girl. Some are, but most are not. It’s not like they are anti-development, they just want consultation and more on their terms. This is my opinion; I don’t represent them. That’s my reading of how things are. So the question is not what to do, but at what pace, and their role in the design and decision-making of this social transformation that’s taking place.

I think one thing that’s critical and that can be done much, much better is that direct consultation – regular, sincere consultation about not only the direct “OK, here’s where we are going to put the road, what do you think?” but about the transformation that’s taking place. And advisory bodies can be established, for example.

The second thing that can be done is to be much more involved, and to provide opportunities for younger people of the local communities for education, for their own pursuits. And of course a third is that – and many operations are already doing this – building schools and clinics and investing sincerely in the social infrastructure that’s necessary. But involving and enabling local youth to develop is also often the critical concern of all families, and particularly important in these remote areas where people have fewer options.

LG:
That tended to go into my next question. I did go through the publication Turning Point that was released. In particular, it sparked my interest because it was so well-related to this topic in terms of the long-term future and sustainability of our energy demands and of these communities that are being so largely impacted by those energy demands. I was going to ask: What would be some of the key recommendations that we should all take action on now, every stakeholder involved in the process, to ensure a balanced future?

AW:
Much of the investment for mining in particular comes from sovereign wealth funds – the major development banks of China, for example. I think there’s a need for governments themselves – government leaders, the elected leaders – to ensure that their sovereign wealth funds adopt these high-level standards. They need to recognize that no longer are their development agencies their major source of influence in the word. It’s no longer AUSAID, USAID, DFID. It’s not the development agencies that are influencing the world in the greatest way, it’s their purchasing policies and it’s their direct investments with their national pension funds and things like this. So there needs to be a kind of reckoning of the role of that public finance on the lives and livelihoods and ecosystems of the world. And these governments should ensure that their own financial investments adhere to the highest standards. I think that’s the first step, there’s not that reckoning right now. There’s still this delusion that the relatively tiny budgets that we have in public development agencies is how we help the world or affect the world. That’s no longer true, and our sovereign wealth funds, our investments, are often causing damage beyond what is known by our own citizens. They often a bit run amok because there’s not the accountability and the knowledge of how they operate and what standards they use. So I think we need a major new reckoning of the force that we’ve unleashed on the world and how it is transforming the world, and we need to ensure that since they are public – by and large, public – funds, we need to ensure that they adhere to the highest standards and obey the law. I think that’s the first step and I think that’s fairly new. I don’t think that many people are aware of that, or are working on that on the advocacy side. For example, the World Bank is a much smaller player than it ever used to be. The sovereign wealth fund of Brazil is almost twice the size of the whole World Bank, and they’ve become the major investor in roads and mining across South America. I don’t know if the citizens of Brazil are aware of the effect that their own public fund is having on their neighbours.

There’s a major reckoning that needs to take place, and that’s the true force of change now. They need to be held to account. We need the mechanisms of independent monitoring and awareness so that we’re all aware of what they do, and so that they themselves are better aware of what they’re doing. That’s the first place to start, and then getting those investors to adopt higher standards for sure.

Getting governments…there’s not a whole lot of governments in the world that have major mining sectors, it’s not that big. (There should be) more action to get them together. To get the governments to obey and enforce the rules would be a very important second step. Some of them are organized under the EITI, but that’s pretty paltry – it’s never really risen to a very high political level. But again, I think there’s opportunity to do more with that. Some of the major countries like the US or Australia that have major mining sectors can take a stronger leadership role in this. They all have pretty high standards in their own countries, but frequently the companies that are housed in their countries aren’t demonstrating the same respect when they go overseas.

(LG Comment)
Governance isn’t strictly limited to governments, although they have a strong role to play to uphold regulation and laws and ensuring that investors in any region meet best practice but firms must adhere to laws, local communities must be consulted genuinely and sincerely and the advocacy world must also be smarter about its involvement in this space…
AW:
Stronger political commitments from governments themselves are, I think, very important. I think on the NGO advocacy side, maybe we just all need to get a lot smarter and invest more energy in understanding the infrastructure and extractive sectors. There’s a small amount of intelligence and capacity to understand and deal with these. There aren’t that many NGOs that are smart about this and active in this arena, and I think it’s just grown to a level at which we all need to get much more involved and smarter about it. I think this is an issue whose time has come. It’s overdue for us to get more involved and shine a much brighter light on what’s actually going on and what are the good cases, what are the bad cases, and what can be done.

]]> http://futurechallenges.org/2012/10/rights-and-resources-in-global-mining-andy-white/feed/ 0 http://futurechallenges.org/2012/10/mining-and-inuit-communities-in-canada-tom-hoefer/ http://futurechallenges.org/2012/10/mining-and-inuit-communities-in-canada-tom-hoefer/#comments Thu, 18 Oct 2012 10:58:20 +0000 Tom Fries http://futurechallenges.org/?p=21691 This is a long version of the answer that Tom Hoefer (Executive Director, Northwest Territories and Nunavut Chamber of Mines) gave us for the Lead Article A Zero-Sum Game? which deals with the following question: Rapid globalization makes competition for land, raw materials and other resources intense. When the stakes are so high, can rural, indigenous peoples and urban, industrialized communities both benefit from resource extraction? Or is this situation a zero-sum game?

Resource extraction – particularly mining – in northern Canada is already benefitting both rural, indigenous (Aboriginal) peoples and urban, industrialized communities. Currently, the Northwest Territories and Nunavut host 5 mines producing diamonds, gold and tungsten. The mines’ physical footprint is less than 0.01% of the two territories’ area, which itself is the size of India. The region hosts fewer than 75,000 residents the majority of whom are Aboriginal (First Nation, Inuit and Metis). Education levels are lower than the Canadian average, unemployment is significantly higher, and social problems are greater.

Training partnerships and industry-community agreements have helped make mining the largest private sector employer of Aboriginal people, and have created a brand new Aboriginal mining business community. The mines provide much needed employment and income to fill the void created when NGO pressures decimated the fur trade, an economic cornerstone of Aboriginal communities for several hundred years. Aboriginal communities have captured thousands of person years of long term, high paying mining jobs, and several billion dollars in business spending through their new business ventures. The industry’s tax and royalty contributions are also helping move the territories and communities closer to economic self-reliance. The 4 NWT mines contribute about 30% of the GDP, and Nunavut’s single gold mine is already contributing over 10% of its GDP. The mines also employ workers from southern Canada, and they purchase materials and supplies from manufacturers there, creating jobs and wealth for other, urban and industrialized parts of Canada.

The Northwest Territories and Nunavut’s large size, remoteness and cold and harsh climate conditions are not favourable to economic diversity. Non-renewable resource development is our economic strength and today, the mining industry in the NWT and Nunavut is making the most significant socio-economic contributions to Aboriginal communities than ever in the industry’s 80-year northern history.

But it’s not enough. Given our Aboriginal baby boom, and given that mines don’t last forever we need to continue to explore for, and develop, new mines to address our employment needs. Our current mines are doing much to help, but there is room and need for further growth that will contribute much-needed community opportunities. We are hopeful that commodity markets will remain strong enough to support a number of exciting new mining ventures in both Territories which will provide still needed opportunities for local employment, business and government revenues.

Tom Hoefer, Executive Director, Northwest Territories and Nunavut Chamber of Mines

Mining proves that benefits of globalization remains merely on paper

In spite of the Philippine government’s promises that globalization will bring economic growth and development, our country continues to experience rapid resource depletion, extensive environmental degradation, and proliferation of conflicts.

A case in point is the liberalization of the mining industry which is among the longstanding centerpieces of our government. The Mining Act of 1995 during the Ramos administration is among the first globalization laws passed in the country, aiming to entice foreign investments in our mineral industry. Lots of privileges and incentives were given to foreign miners, such as full ownership of tens of thousands of hectares of mineralized lands for 50 years.

As of July 2012, mining concessions cover 1.15 million hectares of Philippine soil, mostly owned by foreign corporations. As these corporations have the right to own and exploit these areas, millions of our grassroots peoples were driven out of their lands. Large-scale mines have historically caused massive pollution and widespread forest denudation, affecting the livelihood and food source of rural communities.

A recent example is the series of dam failures in Philex Mining’s Padcal Mine since August 2012. Philex was suspended and fined for spilling more than 5 million metric tons of mine wastes to Balog Creek and Agno River. The toxic mine spill endangers not only the livelihood of the local communities but as also threatens their health.

Mining liberalization also dismally contributed to domestic economic growth. Anti-mining liberalization group Defend Patrimony noted that mining and quarrying contributed a measly 1.2% to our GDP and 0.16% to the government’s total revenue in 2011. This, as corporations annually extract billions of pesos worth of mineral resources from our reserves.  The promise of economic benefits which will supposedly lead to the improvement of social services and industrialization of both rural and urban areas remained merely on paper.

Clemente Bautista, President of Kalikasan: People’s Network for the Environment

In the case of Mongolia, the benefits of resource extraction are unevenly distributed between rural, indigenous people and urban communities. To a greater or lesser extent, the current legal environment on land ownership makes this inequality more pronounced. In Mongolia, land is considered state property. In 2002, the parliament of Mongolia passed the land law (effective as of 2003 May 1) which permits citizens of Mongolia to own land up to 0.07 hectare to 0.5 hectare per citizen depending on the area in which he/she resides. However, the law states clearly that pasture land will be owned only by the state. Moreover, traditionally and throughout the history of Mongolia, pasture land has always been seen as public property for common use by all of society.

Under these legal circumstances, the government of Mongolia has been rushing to extract natural resources at a very aggressive rate in order to meet the growing demands of rapid urbanization, which is mainly concentrated in Ulaanbaatar, the capital city of Mongolia. As a result, the state has been issuing exploration and mining licenses for mining companies expansively. About 1,200 exploration and mining licenses had been issued all over Mongolia as of 2010, covering pasture land, rivers and water resources. Since the land belongs to the state only, the nomad community had no legal voice in dealings for their traditional pasture land. As for the mining, license holders had no reason to bargain with indigenous nomadic people over the licensed areas.

Coal mine near Hailar, Mongolia. Picture taken by Herry Lawford, published under a CC BY 2.0 license on Flickr.

Since the pasture land is the only income resource for nomadic community, there have been several clashes between nomadic communities and mining companies since 2000, but the mining companies have always won in a legal sense because they have land usage rights to the areas of concern from the state, which owns land. As a result, nomadic communities have moved away from mining areas without any significant restoration of lost income or compensation from mining companies. When mining managers operating in the South Gobi region were asked about the biggest compensation they had provided to nomadic communities, their answer was that they had sent a “free” truck to make them move out of the mining area. Such “compensation” to nomadic communities from mining companies is commonplace and representative in Mongolia.

Given this situation, it is very hard to prove that rural communities are getting the same benefit as much as urban community.

Another big problem of natural-resource extraction for rural communities is environmental degradation. Nomadic livestock is totally dependent on nature, and water pollution, water shortages, dust from the trucks that transport raw coal and other natural resources to China through the Mongolian desert, all make the livestock on which nomadic communities depend more and more vulnerable to damage.

Some economists might argue that labor will move from a traditional sector to a mining sector which brings technology and productivity to economy, but this is not happening yet in Mongolia. The nomadic people are usually less educated and less experienced.  They will not easily find employment in mining sites. This kind of “theoretical” labor shift does not appear to be taking place so far in Mongolia.

The government of Mongolia should have a very specific strategy to balance the rapid growing demand of urban areas and the needs of neglected remote communities.  Even though nomadic herding is “out of date,” the living of almost 30% of population relies on it. In contrast, the mining sector employs only 6% of work force. In other words, the livestock sector itself is neglected. But its role in the Mongolian economy is not negligible, and it will remain appreciable certainly for the next 50 years, I believe.

Amartuvshin Amarjargal, Associate Professor at the University of Ulaanbataar

Hey Tom,

Interesting take on the war issue.

I might disagree with you on several points as I see it in a different gender perspective. I believe that war is a man made thing. It is very unfortunate that English language does not really differentiate between man as a male and man as human kind. In my view it has been always about a man’s pride showing others that they are better than the rest. And it is about a risk-taking behavior.

I am not aware of any woman starting a war and igniting a huge international conflict, maybe it is not in our nature? Yet women are constantly perceived as irrational, emotional and incapable of dealing with things on a large scale. Throughout the time people have fought in meaningless conflicts and thousands of mothers and wives suffered from the losses. Do we really need all this suffering? Cannot we go by without wars in let’s say Afghanistan, Vietnam or Chechnya?

Russia is famous for its arrogant machist leader Putin, who decides what’s best for us all. He keeps spending more and more money on military and less on social issues. Even though he spends so much money on the army, Russian army is in it’s worst shape: no one wants to serve there, soldiers get killed by their fellow soldiers without any particular reason. Serving in Russian army can turn into a curse for young men. The country is on the edge of poverty, yet we have a national pride of being the scariest American enemy. The Cold War is over! But M. Putin probably does not know about it.

The same happened to USA in Iraq: clearly Mr. Bush did not really know what he was getting into, yet he still took a risk and lost. And now America is drowning in a conflict that has nothing to do with USA. I think this machism has to end and we should think more of what is important for the society and not some arrogant leaders.

What happened in Egypt and Libya is horrifying, but where does this hatred towards Americans come from? First of all, salafism and all orthodox muslim views come from Saudi Arabia – an ally of the USA. Saudi Arabia had nothing but sand and Bedouin tribes before the oil discovery in the region. Egypt was an advanced country before Mubarak came to power. US government supported him from the very beginning and kept subsidizing Egyptian military while Mubarak was gradually destroying the country. Divide and conquer at its best. Mubarak has gradually destroyed the country while Saudi’s money kept orthodox religious views alive.

USA keeps supporting Saudi’s economy. Saudi Arabia has the most repressive regime in the world: no human rights, no women rights, no anything. Then why USA supports such an undemocratic regime that spreads its influence in the region; why don’t they start a war against them? I can tell you why: it is not about democracy but about capitalism and risk taking. These strategies did not bring us any good, yet we are falling for our path dependency.

Best,

Masha

Hey Tom!

I’ve been thinking about your email all day. As I strongly disagree with you, I tried to understand your point of view.

Maybe because I live in a country that doesn’t get involved in wars as much as United States (or other countries) do, I simply don’t get it.

One thing is another country to protect their citizens from the lack of rule of law. When this happen, the United Nations (after all, it literally represents the nations) should do something, not just 1 particular country. As an example, the genocide in Rwanda didn’t get as much attention from USA as it should.

Other thing, completely different, is going to another country to “bring democracy”. Again, as an non-American, that’s what seems when we read news about wars in Afghanistan and Iraq.

Well, but that’s my point of view, of course. The last war Brazil really got involved in was in Paraguayan war, in 1870, and it’s a embarrassing memory for us.

warm regards

Thanks Tom. Your email reminded me of this:

“Is it for faith to deliver peace, when on all sides inequity thrives for it shall indeed thrive, when the blessed walk past blissfully blind, content in their own moral purity, in the peace filling their souls? Oh, you might then reach out a hand to the wretched by the roadside, offering them your own footprints, and you may see the blessed burgeon in number, grow into a multitude, until you are as an army. But there will be, will ever be, those who turn away from your hand. The ones who quest because it is in their nature to quest, who fear the seduction of self-satisfaction, who mistrust easy answers. Are these ones then to be your enemy? Does the army grow angered now? Does it strike out at the unbelievers? Does it crush them underfoot?”

(Steven Erikson, Malazan Book of the Fallen, Book 8)

Regards

Rabab

***

From Tom:

Rabab, I would love – love – to read a post from you that uses this text as a jumping-off point. Do you disagree with my point of view? Tell me why. Speak from your heart. I want to read it. This is an important issue.

Tom

***

From Rabab:

I believe peace is completely dependent on completion – whether it is the completion of self, completion of needs or a completion of all that we deem important. However, such a Utopian world is perhaps impossible to achieve. Therefore, peace is not possible. We were not built for peace. Peace would mean the end of all endeavor, the end of all aspirations and this would lead to dissatisfaction thus, again, leading to war.

So in essence, I don’t disagree with you. And, yes, I can write about it, definitely.

Dear Tom

I think your opinions are very interesting and provocative – I like them-, specially because United States Americans have a particular way of experience war. Always from away (with the exception of the civil war). You send soldiers to do war, and the only attacks on your soil ever were Pearl Harbor and 9/11, of which today is another anniversary. That is very peculiar because then the experience of war is perceived very differently from those who had them in their own lands for years.

Wars are paradoxical. In my case I wouldn´t exist if it wasn´t for 2 wars. The Russian Revolution and the Second World War. My grandmother and my father wouldn´t have suffered displacement and loss, but then they wouldn´t have arrived at some point in Venezuela. But I rather not exist if I could have taken from them all that suffering, or the horrors they witnessed that made them deeply sad when they remembered them.

My president is menacing now with a civil war if he losses the election and now I wonder if I would be able to kill somebody or let myself be killed defending the results of some elections or contesting them. So all the questions in your questionnaire are actually worth writing about. And I certainly will do following what I have written here.

This is a fantastic content package.

Very kind regards,
Kira

***

From Tom:

Dear Kira -

My own grandfather was Belorussian, and fled the 1918 revolution as well as a young man. He would eventually join the US Army, and go on to interpret for Roosevelt (or was it Eisenhower?) and Stalin at the conferences in Yalta and Tehran.

My other grandfather was an American serviceman who met my grandmother, who was German, in postwar Berlin. My grandmother and my mother, who was 4 at the time, came through Ellis Island and moved to Washington, DC, but my grandfather was posted to Okinawa, Japan shortly thereafter, leaving them alone, lonely, and with little English in an unfamiliar city, when telephone conversations were expensive and Skype didn’t exist.

I think many of us have these stories, and I hope many of them will be shared. I am so grateful that you shared some of your family’s history with me.

Tom

***

From Kira:

Hi Tom

I guessed you had a particular background story like that. Most americans do and that is something that fascinates me. How we inhabit a world comprised by people product of tough circumstances like wars and consequential migrations.

My great grand mother was bielorrussian too

Kind regards,
Kira

Alexey Sidorenko, a Future Challenges blogger based, has been observing the rollback in democracy in Hungary under Fidesz. Looking from the outside in, he sees it as one example of a broader rollback in democracy in Eastern Europe. Follow Alexey @sidorenko_intl. This article is an unabridged version of the lead article “Democracy on Life Support“.

The recently released 2012 edition of the Bertelsmann Stiftung’s Transformation Index (BTI) pointed to a rollback in governance in Eastern Europe – freedom of speech, integration policy, etc. The poster child for this is the nation of Hungary, a Central European state that entered a period of “reforms” after the center-right Fidesz party won recent elections. Ongoing reports from the country are concerning and, sometimes, alarming. The dominant party, led by Victor Orbán, has already introduced changes to media laws, the country’s political structure, and internal and external security policy. Taken as a group, these changes are almost uniformly seen as anti-democratic by outside observers.

Fidesz has introduced serious changes to Hungary’s educational system while the country continues to experience serious economic difficulties. Fidesz’s reforms may be doing more harm than good to the country’s economy. Orbán has also taken a strongly anti-European line, best illustrated by his famous comparison of Europe to alcohol. Of the EU, he said that membership “gives a sense of almightiness but then prevents one from achieving it.”

From the Central European point of view, such a complex decline in democratic and European values in Hungary is surprising. Hungary was among the first to rebel against the Soviet presence in 1956 (reactions in the Czech Republic and Poland followed later), seeking a more democratic and European way of life. The activists and politicians of that time would be dismayed to discover that, half a century later, the dominant party would give up those dearly-bought ideals and seek instead for less democratic forms of governance. (Ed. Note: One of our authors, Kinga Szálkai, notes however that a majority of the well-known revolutionaries of 1956 supported Fidesz in the elections, some of them even campaigning for the party.)

This is how it looks to me, writing from Russia. But the outsider’s and insider’s perspectives might well be different. To get the best perspective on these issues, Future Challenges talks below with four experts.

1. Citizen X, a Hungarian Fidesz supporter who prefers not to be named.
2. Hauke Hartmann, of the BTI
3. Kinga Szálkai, a Future Challenges blogger from Hungary who does not support Fidesz
4. András Inotai, former Former Director General of the Institute for World Economics in Budapest (video interview – click here to view)

Do you think policies such as those of Fidesz/Orbán are viable in the twenty-first century? Do you think they are appropriate to prepare Hungary as an EU member state in the next 5-10 years?

Citizen X: Some of the most important values of the last 100 years are national self-determination, sovereignty and the freedom of identity. These values are unquestionable in the 21 century. The second Orbán government recognizes these values, and builds its politics on the fact that the member states of the EU have different linguistic, cultural, geographic and economic features, therefore a full economic and political integration among them is not possible. It would moreover lead to a dead end.

Zoltán Latinovits, famous Hungarian actor, claimed in another historical period that „without a nation, there is no internationalism.” The full economic and political integration of Europe is not possible, because there is another layer beyond economics and politics: the layer of language, identity, way of thinking (not to mention economic or political capabilities), that is very different all around Europe. We can integrate each other in the same extent as we understand and accept each other’s language and culture. With China and Russia it is not a problem – or let’s say it is another kind of problem. With its cultural, linguistic and identical features, the EU-integration has a natural limit, and the full monetary and political union is definitely beyond this limit. In the next 5-10 years, the EU has to face and take seriously the question of identities and related values, therefore the debates boosted by the Orbán-government can only help the renewal of the EU.

Hartmann: The approach the Orbán government takes towards democratic processes and political culture constitutes a regression in comparison to the democratic values of the European Union. Fidesz and their rightist partners argue that they have a clear mandate by the majority of the population to fundamentally change the political texture of the country. Radical reform without consensus-building is therefore not only legitimate, but an obligation to the majority of the voters. Minority positions are not considered to be an important element of the political discourse, providing food for thought as an uncomfortable yet welcome antidote to the self-satisfaction of those in power or an intellectual enrichment of the debate, but a disturbance of the reform drive which ought to be disregarded or curtailed. This ideology, ironically shared by some Islamist parties in the Arab world, is called “majoritarianism” and tends to contribute to a further polarization of the political discourse in Hungary. If there is not an active search for a middle ground or compromise, democratic quality and minority protection as understood by the EU suffer. In that sense, the majoritarianism of Fidesz and Orbán certainly are not appropriate to further Hungary’s integration into the EU (a goal decidedly not strived for by the rightist government, after all). If recent BTI results constitute a trend and not just a snapshot after the global economic and financial crisis, a nationalistic, xenophobic and majoritarian style of populist governance may well remain influential or even gain in importance. This, however, does not make it any more viable. In a globalized framework, isolationist postures and recourses to nationalist ideologies might in the short run feel good, but will in the long run weaken not only the political but also the economic standing of a country.

Szálkai: I do not think that looking inwards and turning away from the institutions of the international community can be a viable direction in the twenty-first century. In my opinion, a small, poor and crisis-ridden country in the heart of Europe, like Hungary, cannot and should not stand up against the mainstream integrational processes of nowadays, and can only have a future as a cooperating part of them. I think that the Fidesz government is aware of this fact, and is trying to balance between pleasing the leaders of the EU and satisfying its Hungarian voters as well. However, if and when the question of democratic and European values becomes part of this balancing act, the stable future of Hungary as an accepted and supported EU member state becomes endangered.

Do Orbán’s politics contribute to the broader economic and political crisis in Europe? If so, how? If not, why do you see them as isolated?

Hartmann: The Hungarian economy is neither large enough nor damaged enough to be a (main) contributor to the economic crisis in Europe. However, austerity measures not being taken might set the Hungarian budgeting off balance in the years to come. Also, populist and nationalist regressions in Europe have been dealt with before, so that Orbán’s policies in themselves are not a major crisis factor, but rather just contribute to the overall picture of political regression in Europe. What is, however, an unfortunate development is the slow and lukewarm response which the erosion of rule of law in Hungary has been receiving from Brussels and other European capitals. If the EU is perceived to be a paper tiger when it comes to democracy and human rights standards, establishing standards which it is unable or unwilling to keep up at home, a crisis of legitimacy arises which will be hard to overcome.

Citizen X: In the last ten years, Hungary was a typical instance of budgetary imbalance, state indebtedness and irresponsible economic processes. In this period burdened by a world economic crisis, Hungary, most unfortunately, needed and still needs the help of the international monetary institutions, and the situation necessitates a powerful crisis management as well. The ambivalent negotiation policy of the Orbán government against the IMF does not help the stabilization of the Hungarian economy or the recovery of the trust of the markets, and it has negative effects on the EU as well. It is characteristic of the Hungarian government that it mixes economic interests with political interests – just think about the introduction of the strict flat tax system or the redemption of the MOL shares, or, on the other side, about the new Labor Code. Such behaviours sometimes strengthen, other times weaken the positions of the country and its society. Their contradictions should be eliminated, and then Hungary could play a positive role and become a good example, strengthening the EU as well.

Szálkai: Hungary is a member of the EU, therefore the Hungarian government cannot be treated isolated from it. Hungary represents the EU and influences its international judgement and economic credibility with its political and economic decisions. If Hungary experiences a decline in democratic values, let alone European values, or in economic growth, it definitely contributes to a decrease in trust and credibility towards the EU – and, in this way, it contributes to the deepening of the economic and political crisis in Europe as well.

How entrenched do you think Orbán’s “reforms” already are? Do you think the next government could reset them, if there is a change in political attitudes? Are there any reforms that will be extremely hard to set back to the pre-Orbán state?

Hartmann: In Hungary, there is an unlucky combination of an uncompromising, hard-line government which is entitled with a two-thirds majority in parliament allowing it to change the constitution at will. This has led to a fundamental restructuring of the political and legal system, most noticeable in the curtailment of powers of the Constitutional Court. In a nutshell, Fidesz has seriously weakened the checks and balances originally provided for in the constitution. Any government which wishes to undo these changes will have to secure a two-thirds majority as well, which will require intensive political efforts and a successful coalition-building, as it appears to be highly unlikely that Hungarians will grant any other political party such an overwhelming mandate again as it gave to Fidesz. In a highly polarized society as Hungary is, this will prove to be a very arduous task.

Even if the constitutional changes might be reversed or modified, the political posts of nominally independent state institutions still are filled with loyal Fidesz-supporters. The rightist government thereby firmly anchored its reactionary policies in institutional changes and strategic nominations. Even if voted out of office, the framework it currently sets will be hard to undo.

Citizen X: The ambitions of the second Orbán-government are high, and sometimes even too confident. The implementation of the new constitution was timely and acceptable, the preceding and following institutional changes (the restructuring of the Media Council and the Constitutional Court or other national public institutions) are likely to prevail in the long term as well. In my opinion, the task of a possible new government would not be the re-reforming of the recently implemented and/or reformed basic systems of the state, but rather the qualitative proofing and refinement of them. Instead of the reprivatisation of the private pension funds, an individual account system could be introduced to the state pension system, the personal income tax system could be reformed into a double-rate tax system in case of extra income, and as for education, students should get access to new resources of stipendium. In my opinion, two years of symbolic governance (with giving double citizenship to over-border Hungarians or with the reconstruction of the main square around the Parliament), was enough, the situation of the country now can only be stabilized through a real social and economic recovery.

Szálkai: I believe that Fidesz still has a great chance to win the next elections in 2014, as it does not have a real alternative that is acceptable for the majority of the Hungarian society. Moreover, the second strongest political party is currently the right-fringe, anti-EU Jobbik, the election of which would lead to a more serious decline in democratic and European values in Hungary. Even if the next government will be a committed follower of these values, I am very pessimistic about the resetting of the laws that can only be changed with a two-third majority. The ongoing reform of the electoral districts will contribute to the difficulties in the restoration as well. However, there is another negative change that I find more important and will be extremely hard to restore in the course of time, and that is the significantly decreased trust in democratic institutions.

How is it that Orbán’s party is so popular, despite criticism from outside Hungary? Is it just populism and some sort of economic revanchism, or is it something more? Is it the sense of the ‘big Hungary’ and the post-War order that makes people so prone to the populist rhetoric?

Hartmann: Hungary is a more extreme representative of a development which the BTI 2012 observed throughout Eastern Europe in recent years. There is a pronounced disenchantment with a democracy that does not deliver socio-politically and an EU which is unable to overcome the East/West-divide of living standards anytime soon. Having faced the triple challenge of economic transformation after the fall of the Berlin Wall, of economic integration and the fulfillment of obligations to become an EU-member and of overcoming the effects of the global financial and economic crisis all in just over twenty years, there is a reform fatigue and a general feeling to have contributed a fair share without feeling positive socioeconomic effects. Populist politicians are able to exploit these sentiments by blaming “the establishment” and “Brussels”, benefitting from high voter volatility and the relatively instable and only weakly socially rooted party system. In the easy answers that populist parties provide lies an automatic accelerator: Not being able to find differentiated answers and reform compromises when it comes to concrete politics and daily reform work without being accused themselves of caving in to the establishment, populists must maintain a simplicity and rebellious posture in permanence. This is why Fidesz relies so intensively on – as the BTI-report states – a “Golden Past that Never Was” and is, up to this point, able to maintain popular support by simplification and self-aggrandizement.

Citizen X: On the one hand, it has to be admitted that the party of Orbán is extraordinarily well-organized. Personal relations strengthen this organization: the most intimate friends and colleagues of Orbán are in the most important positions, while other regimes often fail because of collegial relations and rivalry. On the other hand, after Trianon and the communist dictatorship, people have a certain demand on a national and value-oriented governance, which is based on a decent political will, a significant support and an ability to govern. Orbán and his government try to represent the possibly broadest layers of the society and to gain their support – should we call that populist?

The World War treaties have had deteriorating effects on Hungary, and ca. 5 million Hungarians were left over the borders. Handling their situation in the 21 century is a linguistic, cultural, or at most economic, but for no reason territorial question! I think that the Hungarian diplomacy is perfectly aware of this. In spite of that, a more tactful diplomatic direction would be necessary. It is an important initiative to give Hungarian citizenship to 5 million Hungarians, but this does not solve the societal and economic problems of Hungary. The country rather requires exemplary initiatives, best practices, and, most importantly, real cooperation between the political parties, the public sphere and the civil society to solve these problems.

Szálkai: Hungarian people experienced a great disappointment after the regime change and with the accession to the European Union. On the one hand, they expected prosperity from these changes. Instead, the period after the regime change was characterized by mass layoffs due to the restructuring, and the EU could not protect Hungary from the deep economic crisis of nowadays either. On the other hand, many people perceive that they are only ‘second-class’ citizens of the EU, and the comparison with Western European countries makes them even more disappointed. In my opinion, this state of despair makes the Hungarian society so receptive to populist rhetoric that invokes economic successes and national pride, promising a way out from the present situation.

Do you believe a local ethnic conflict is still possible in Central Europe (e.g. with Romania, Slovakia, Serbia, or Slovenia)?  Why or why not?

Szálkai: I do not believe that a local ethnic conflict is still possible in Central Europe. In spite of the hostile rhetoric that occurs time to time between these countries (or rather between the fringe groups of these countries), they are united in many international organizations and local initiatives, and they are aware of the fact that their main national interests can only be achieved by means of cooperation.

Citizen X: Hungary and the other countries of Central Europe should finally learn from the history of the past 150-160-170 years that it is neither possible nor permissible to establish homogeneous nation-states. The ethnic references of the Hungarian revolution of 1848-49 or the two world wars are the best examples supporting this standpoint, emphasized among others by István Bibó, famous Hungarian politician. Nevertheless, the listed countries constitute an important geopolitical unity, and besides the dangers and threats, can offer significant possibilities for each other in case of cooperation, we should never forget about this. But, while it is possible to accept a language law that discriminates Hungarians in Slovakia, and while in case of other countries there are no problems with double citizenship, but in case of Hungary it is treated as a political game, there cannot be a real cooperation between these countries. Still, Central European politicians may act according to bad historical reflexes and habits, but we should not play the role of the scaremonger! Everyone should support the understanding and development of different identities, they should be made acceptable and possible to live with, and no-one should treat them in violent or suppressive ways.

Hartmann: I honestly don’t know.