Starting from Scratch: The Challenge of Transition

By David South (Canada), UNV Information Officer, UNDP, Mongolia

UNV News #78 November 97

After seven years of transition to a market economy, Mongolia – a former satellite of the Soviet Union that has had a democratic government since 1992 – has been profoundly changed. Where it once had a rigid communist government and few contacts with the west, Mongolia has pursued rapid economic, political and social liberalisation. Mongolia has a small population – 2.3 million – spread out over a vast territory wedged between Russia and China.

Communication has in many ways deteriorated over the past seven years as the old communication networks from the communist era have not been fully replaced by the private sector. More and more it became apparent that government and the private sector were almost working in the dark in understanding how transition has affected Mongolians.

In partnership with the Mongolian government, UNDP initiated the researching of Mongolia’s first human development report back in the middle of 1996. It was launched on September 5 of this year, with UNVs playing a key role. To lead the team in producing the report, British poverty specialist and UNV Shahin Yaqub was brought in. Only 29-years-old – one of the youngest UNVs in Mongolia – Yaqub joined a rapidly expanding UNV presence in the country. There are now 24 international UNVs and 26 Mongolian UNVs deployed throughout the country in UNDP’s projects.

The thirst for expertise in Mongolia – a country undergoing the growing pains of transition to a market economy – has placed high demand on UNVs. UNVs occupy senior roles in all of UNDP’s projects.

The 1997 Mongolian Human Development Report is a prime example of the important goal of capacity building conducted by the UNDP. For Yaqub, the report’s principal author, it was like starting from scratch. A poverty research office had to be set up before the work could begin. A team of Mongolia’s top statistical researchers had to be trained in the latest methodologies for social research.

Yaqub was excited by the project. He said: ”There was no office when I first came. We had to organise the office to understand who does what and basically create the focal point for poverty analysis in Mongolia”.

Yaqub also had some of his basic assumptions tested. The small population of this country – only 2.3 million – had meant the previous communist regime was able to build up a large archive of statistics on the population. A good portion of the information was not up to international standards, but it potentially represented a wellspring of data to start from. “Mongolia is number-rich. To even have that kind of data is very rare for a developing country. But unfortunately we found all this information was stored on Russian mainframe computers that didn’t work anymore!”

During the actual production of the report, Yaqub was joined by three more UNVs: Mustafa Eric, a Turkish journalist working with the Press Institute of Mongolia, Jerry van Mourik, a Dutch journalist now working as the Support Officer to the United Nations Resident Co-ordinator, and UNDP Information Officer David South, a former journalist with the Financial Times in London, England.

The high-profile role played by media UNVs was crucial if the report was to not end up collecting dust on a government shelf. The report is a repository of essential and new information on the state of human development in Mongolia, including data showing rising poverty rates and serious threats to food security. Like all human development reports produced by UNDP, it was not meant to be a prescriptive tract, but a lubricant for a national debate on sustainable development in Mongolia. This altered the design and presentation of the report.

Instead of looking academic, the report took on the appearance of a magazine, from its cover to colourful children’s paintings inside. UNV Mustafa not only assisted with the report’s design and production, he also used his contacts in the Mongolian media to ensure the report was distributed across the country. UNV van Mourik assisted with publicity, including producing an emotionally-charged television commercial weaving together vignettes from Mongolia’s recent history to tell the story of human development.

Already in its second print run in both English and Mongolian, the report has been adopted as their study guide by Mongolians wanting to learn English.

“Mongolia is a rewarding place to work,” said Yaqub. “As a technical specialist and UNV, what you bring to the job is valued. I researched poverty for five years before coming to Mongolia and I felt I had something to contribute. But I also realised I had something to learn as well. You always have to keep in mind you are bringing your own baggage to the job – be it cultural, emotional or intellectual. Coming from an academic background, I was not afraid to be told I was wrong.”

Yaqub, who had worked in poverty analysis in the Philippines and Bangladesh before coming to Mongolia, will never forget the country that sparked his new passion: horses.

“You give up things as a volunteer – your time, your income, all the things you took for granted back home. But what you give up is compensated by rewarding work and good friends. When I learned to ride a horse, I can place it directly and clearly to Mongolia – that memory will always be with me.”

Just before Yaqub left Mongolia for work with UNDP in New York, he participated in a series of public debates in one of Mongolia’s poorest provinces, Khuvsgul aimag. The public debates are used to introduce the report to the grassroots while sparking discussion on sustainable human development.

"Starting from scratch: The challenge of transition": UNV News, November 1997

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Update on Saturday, October 17, 2020 at 3:05PM by David South

Buyng into capitalism: Mongolians' changing perceptions of capitalism in the transition years by Paula L. W. Sabloff (12 Oct 2020).

It was a pleasure to have the opportunity to comment on a draft of Buying into capitalism: Mongolians' changing perceptions of capitalism in the transition years by External Professor Emeritus Paula L. W. Sabloff from the Santa Fe Institute (12 Oct 2020: Central Asian Survey). 

"A political anthropologist, she uses complex-systems tools to analyze three different databases: Mongolians’ changing ideas on democracy and capitalism, the emergence of early states all over the world, and 19-20th century Cozumel."

The Santa Fe Institute "is the world's leading research center for complex systems science."

Mongolia Looks to Become Asian IT Leader

A Mongolian information technology company founded by a woman has shown a way to thrive in the country’s often-chaotic economic environment. With the global economic crisis moving into its third year, Intec’s strategies to survive and thrive offer lessons for other IT start-ups in the South.

While the global economy’s prospects are still uncertain, on the positive side, many believe the best place to be is in emerging economies like Mongolia, with some foreseeing healthy growth for the next 20 to 30 years. Mongolia’s information technology entrepreneurs are looking to prove this is the case. The country has made great strides in improving e-government – jumping from 82nd place to 53rd in the UN e-government survey 2010 (http://www2.unpan.org/egovkb/global_reports/10report.htm) – and is now aiming to become an Asian software and IT services outsourcing powerhouse.

A Northeast Asian nation (http://en.wikipedia.org/wiki/Mongolia) sandwiched between Russia and fast-growing China, Mongolia grapples with the combination of a large territory, a small population (2,641,216) and limited transport infrastructure connecting it to its neighbours. Historically, it is a nomadic nation with a strong animal herding tradition. But during the Communist period, it industrialized and became more urban. After the collapse of Communism at the beginning of the 1990s, the country experienced a terrible economic and social crisis, with rapidly rising poverty rates and high unemployment.

Despite its infrastructure obstacles, Mongolia has been able to develop a lively information technology sector, often with the assistance of the United Nations. During the late 1990s, as the internet revolution exploded, the UN led on supporting infrastructure, skills development, innovation and legislation.

Information technology consulting and services company Intec (www.itconsulting.mn), founded in 2004, has been able to thrive through the global economy’s ups and downs by identifying an under-serviced niche as a consulting, research and training company. Intec now has five full-time staff and works with a broad network of Mongolian and international consultants.

As is often the case with new businesses, Intec initially found that many doors were closed to start-up enterprises.

“The major challenges which I faced were to make people understand about the consulting services,” said Intec’s founder, Lkhagvasuren Ariunaa. “The consulting services concept was new to Mongolia and Mongolians at that time and not many organizations were willing to work with consulting services. The international and donor organizations were keen to work with consulting services companies; however, they were requiring companies to have a list of successfully implemented projects, which was difficult for a new starter like Intec.

“For example, registering with the Asian Development Bank consulting services database required companies to be operational for at least three years. So, we got registered with ADB consulting services database only in 2008. Meanwhile, personal connections and communication skills helped to find jobs and opportunities for Intec.”

Ariunaa had worked for the Soros Foundation (http://www.soros.org/) but it closed its offices in Mongolia in 2004. Faced with unemployment, Ariunaa went about seeing what she could do next: a dilemma many people face in today’s economy.

“It took me about eight months to develop a business plan and directions of operation of the company. I started in a big room at the national information technology park building with one table, chair and computer.

“It has been quite challenging years for bringing a company to the market and finding niches for us. We have franchised the Indian Aptech WorldWide Training center (http://www.aptech-worldwide.com) in Mongolia – may be one of the few franchising businesses in Mongolia. Currently that center is now a separate entity/company and it has over 20 plus faculty staff and over 300 students.”

Ariunaa had been active in the sector for over 10 years, but while knowing many of the players and organizations, she spent time researching what niche Intec could fill in the marketplace.

“Looking at the ICT market, there were quite a number of internet service providers, mobile phone operators, a few companies started developing software applications, and services etc. However, there were only two to three consulting companies in the ICT sector which to my knowledge at that time were providing consulting services, and still there was a room for Intec.”

Intec then focused on three areas: consulting services, training and skills, and research. Intec found they were pioneering a new concept in Mongolia.

Intec’s first contract was a job with the University of Milwaukee-Wisconsin in the United States to organize a three week course for American students to learn about the digital divide in Mongolia. But the global economic crisis hit Mongolia hard in 2009.

“It was challenging to survive and continue working the same way,” Ariunaa said. “There were few ICT-related jobs in Mongolia at that time, and one of our major clients left Mongolia and we had to find other clients in the market.

“One of the ways of approaching this was that we were not asking for fees, instead we would have a barter agreement – we will deliver them services and they will provide some services for us. For the company itself, we needed to find ways of financing and covering costs for renting of premises, paying salaries for staff on time, paying taxes and other expenses.”

The environment in Mongolia is being helped by the Information and Communications Technology and Post Authority (ICTPA) of Mongolia (http://www.ictpa.gov.mn) , which has been driving forward an e-Mongolia master plan. With 16 objectives, it ambitiously seeks to place Mongolia in the top five of Asian IT nations, competing with South Korea, Singapore, Japan and China.

Ariunaa believes Mongolia has many competitive advantages. “Mongolia is known for a high-literacy rate and math-oriented training and education, and ICT specialists are targeting to become a software outsourcing country for other countries. Another advantage of Mongolians is that they can easily learn other languages: we are fluent in Russian, English, Japanese, Korean, German and we believe that with these two major advantages, we will be able to do a good job with outsourcing of software development.”

While men still dominate the ICT sector in Mongolia, Ariunaa has not found being a woman a disadvantage. “In Mongolia, as gender specialists say, there is a reverse gender situation. Women are educated, well-recognized and well-respected. There were situations, when I was the only women participant in the meeting with about 20 men. But I never felt somewhat discriminated or mis-treated and I think that’s the overall situation towards gender in Mongolia.”

Intec’s success working with Aptech WorldWide Training’s franchising contract brought many advantages for a start-up. “It’s a faster way to do things, and you don’t have to re-invent the wheel.”

As a Mongolian company, Intec has found it best to play to its local strengths. “National companies have knowledge, expertise and experience of local situations, know players and understand about legal, regulatory matters. … partnership or cooperation are one of the means of cooperating with big global players.”

Intec’s success is also down to Ariunaa’s enthusiasm: “It’s fun and I love doing it – just usually do not have enough time!”

By David South, Development Challenges, South-South Solutions

Published: July 2010

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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