Baltic Sea Region; Sustainable Development; Cooperativism;
Baltic Sea Region – Sustainable Development – Cooperativism
Summary
The core intentions of this paper are to draw the attention on the topic “social economy”, its pre-WWII modalities in Estonia, Latvia and Lithuania, to reflect about the pro’s and possible contra’s of its re-habilitation and to invite to participate in initiatives which support “sustainable” economic, social and civic society “development” and the use of modern competitive Western European “self-help economy” instruments, for the benefit of the average citizen, its local, regional and national environment and for the success of the EU enlargement.
Baltic liberalists and their business friends, at home and abroad, often ridiculise approaches of this kind. They call them romantic, nostalgic and, therefore, not viable. Their rejection hides the fear that their own still fragile, merely profit oriented systems (which actually dominate in the region) could suffer set-backs by the return of Western Europe wide successful cooperative and municipalities based economic, civic society based structures.
Because of the lack of a strong counterweight, as here focused, there is no balanced economy and social and civic society improvements lag behind, in spite of enormous own and externally financed efforts since the political change.
Two topics are specifically targeted:
a) Generation of state-of-the-art, regional historic traditions rooted rules and regulations for cooperatives and mutual societies in the three Baltic countries.
b) Building, from below, of democratic, self-ruled sustainable development systems and institutions, starting with a local initiative for the muncipality of Noarootsi (Estonia) and its inhabitants.
Financial support could complement own efforts; it could help to achieve results quicker; but external help should never become a substitute for the commitment and sacrifice of the final beneficiaries, the future users of the systems, and for the administrative and legal cooperation of national, regional and local authorities.
Sustainable development and cooperativism are natural and all over Western Europe successful allies; they complement each other for the benefit of local communities or human groupings who created and orient them. Because of the high synenergy potential, both are here combined.
The concept is, at the same time, conceptually conservative and innovative. The innovation is to abstain from newly created or exotic models and to choose the old harsh times tested, once omni-present and everywhere successful models of the Baltic region as orientation.
Much of the economic and cultural heritage can be re-activated and adapted to meet the challenge of generating a prosperous future in the European Union.
Cross-border effects, i.a. an irradiation into Russia, Ukraine and the CIS in general, and into Poland and other new EU members, is intended.
model region: noarootsi, estonia
noarootsi’s people
Noarootsi has been chosen because of its unique human mix. Persons who stayed in the region, others who emigrated to escape war and Soviet regime and who returned after the political change and new-comers, as myself, live here together and exchange their specific experience, their views, their wishes and their plans. Human relations are open. From daily experience, people know whom they can trust. Influence from abroad is accepted as normal
At the same time, all difficulties of the so-called transition economy countries can be observed in this place. Dynamism, willingness to change, reticense and hesitation exist side-by-side.
Improvement initiatives undertaken in Noarootsi will produce results which can be applied in other Estonian, Baltic or new EU regions – and perhaps also in Russia and Ukraine; the model function will be a high value side-effect.
The preparatory work and the considerations laid down in this paper recommend to use Noarootsi as the point of departure for more comprehensive actions. Nevertheless, a competition between this place and alternatives with comparable conditions shall not be excluded. Also a joint approach with other regions, inside or outside Estonia, is factible.
In Noarootsi (an Estonian commune - the Swedish resp. German name is: Nuckö – which covers the peninsula of the same name and some adjacent areas is close to the middle town of Haapsalu - in German or Swedish: Hapsal - a spa and sea-side resort, famous since the Tsars’ times) and several places nearby there are, since centuries, apart from “ethnic[1]” Estonian settlers, Swedish origin Estonians.
During WWII, most Swedish Estonians fled to Sweden where they were treated as Swedish citizens. After the end of the “cold war”, numerous Swedish Estonians settle again on the restituted lands of their ancestors, without giving up their connections with Sweden. There are family ties between them and those who stayed in the country. They are acceped as equals and as integral parts of the national civic society.
War and post-war events destroyed, almost completely, the traditional Baltic civic society[2] and its systems and institutions.
The few traditions oriented persons, who survived in this region under the occupation regime, had to keep silent; ties among like-minded persons weakened. Fifteen years after the political changes, the fear to unite is still present. Those who grew up under Soviet rule, never heard of the former self-governed, democractic economic self-help systems of their pre-decessors. It is hard to convince them that looking back is helpful to meet the challenges of to-day and the future.
The Soviet rulers perverted the inherited cooperativism concepts. Still to-day, very few people differentiate beween central State command driven collectives called “cooperatives” and traditional Continental European institutions with the same name which are designed and destined to serve individuals.
This makes initiatives difficult which try to re-vitalize the once wide-spread and successful spirit of cooperativism and mutualism. The willingness of the citizens to unite with the objective to defend common interests, i.a. to support sustainable development[3], remains weak.
The returning Swedish Estonians are more open for Western European cooperative ideas than those who have experimented the highly effective Soviet brain-washing. The exchange of views between groups with contrasting life experience is a specific Noarootsi asset which can support the “normalization” process – and the proposed approaches.
The willingness to accept[4] assistance from experienced external out-siders is still a problem. After re-winning independence, many insist in the right to own mistakes. The danger of wasting time, energy and chances when trying to “re-invent the wheel” is under-estimated by them.
In spite of these difficulties, I have commited myself to identify external and internal partners and to persuade them to transfer their know-how and to establish durable connections with the region here in question because I am convinced that sustainable development is a challenge, but also a realistic option for Noarootsi and that the appropriate vehicle for this aim is cooperativism.
Resources of Noarootsi[5]
Noarootsi has no booming industries, nor exceptionally fertil soils. There is no mineral wealth in the region. Nevertheless, since centuries, the inhabitants were able to reach a modest but safe well-being, on the basis of their entrepreneurial spirit and an intelligent use of the existing resources.
In former times, much more people were able to secure their livelihood there than the small population which now is settling in the region. The former and the actual resources are widely the same. They can be used more intensely (e.g. berries and mushrooms from the forests and excellent products derived from them) without damaging or destroying nature and natural cycles.
The resources which merit to be mentioned in first place, are the region’s calmness and its many free, though always accessible places with many species of fauna and flora which are extincted elsewhere.
Experience in other European regions teaches that care for nature and environment is necessary, nevertheless. Authorities and private institutions are aware of this need and have reached considerable achievements. EU rules and regulations is a new field for which know-how transfer is highly necessary and would be welcome.
Big, comparatively healthy forests are here but also open moorlands, marshes and meadows. Long beaches with few visitors – even during summer time, big and small lakes, the smaller hidden in the forests, and quiet creeks are to be found.
After the withdrawal of the occupationist frontier soldiers, who hunted everything to increase their food supply, more and more animal species returned to this place. Millions of migratory birds are in the fields, on the lakes and in the sea, during spring and autumn.
There is an increasing number of biker paths for short and long excursions. Horse riding is everywhere possible; horses can be rented at some places. Wildlife observation posts are installed. Natural reserves and no-go areas within them are clearly signalled. At central points, close to the long but never over-crowded beaches, good parking grounds and simple but cosy and clean shelters have been erected; waste is collected.
Big hotel complexes or ugly and land consuming caravaning grounds do not exist – and, hopefully, will never exist. There is a Swedish style holiday complex which fits well into the nature.
Noarootsi is an ideal place for “soft” (and – to safeguard high standards - strictly controlled) high quality tourism and for summer or longer term residences on re-furbished traditional farms.
This will never be a place for mass tourists who expect that everything is pre-arranged by vacation mangers and monitors. The motto for the region could be “come to uneventful Noarootsi and seize the opportunity to arrange everything, as you wish it”.
In near-by Haapsalu there are well equiped mud-baths with a two centuries old reputation. The Tsars, the nobility and their entourage came here every year before WWI. The fine extra-long railway station where these people used to arrive, has been carefully restored.
Rehabilitative medicine centres[6], one clean, friendly but rather modest, the others for a more demanding clientèle, exist already exist in Haapsalu.
Similar institutions (perhaps also nursing homes) could be established in Noarootsi. EU health insurers would welcome offers of good service at costs, far below those of German or Scandinavian centres. This would be an attractive alternative for hiring Baltic personnel for jobs abroad.
There is a “Swedish” boarding school at Pürksi. It has its roots in a (1940 closed) Scandinavian type adult education centre which had the objective to raise the cultural and know-how standards of the (Swedish and other Estonian’s) peasant’s and fishermen’s daughters and sons. During the Soviet years, the school received considerable help from the Swedish Crown; the funds were invested in excellent installations. The school and the residences remain vacant during the long summer holidays when they could be used for other purposes.
I suggest to host in the school and its residential annexes Baltic Sea Basin wide summer events, e.g. for discussing subjects as “sustainable development” and “cooperativism”. This would generated some income for the school and would create a specific international image of Noarootsi.
Problems and Solution options
The trap of external financial grant should be avoided because donations normally lead to short-lived results and to profiteering, instead of authentic self-help and sustainability. Volunteering should dominate, at least during the start period.
Participation in official reconstruction and development programmes shall not be left aside for all times. But ahead of approaching them, solid structures have to be erected which are destined to enable safe though slow progress towards growth and prosperity. Official programmes can accelerate on-going processes but they cannot substitute indidual sacrifice for a common goal.
“Development from above” usually fails. Co-determination[7] of the final beneficiaries is essential, together with democratic self-governed but, at the same time, control (audit) mechanisms. Only this produces real “ownership”.
These observations, necessarily, lead to cooperativism principles, methodologies and practices. “Social economy[8]”cannot succeed without the cooperation of local (or regional) civic society, nor leaving aside the successful experience of cooperativism – especially its role in the rebuilding of post-war Western Europe.
The lessons of the recent and the more far-back past were neglected during the EU-accession process; the unjustified expectation that free market forces would generate automatically civic, social and economic progress became a credo.
The Baltic region possesses a rich cooperativism tradition. Until 1940, thousands of cooperatives and mutual societies[9] operated and backed the economic “middle class”[10]. Their number exceeded that of their German, Austrian, Swiss or Scandinavian homologues.
These institutions were closed – but never dissolved – in 1940. It would be worth-while trying to re-activate some of them with the alternative objectives, or to start again commercial operations, or to use property restituted to them for the support of new initiatives in the old spirit.
In any case, a fresh start has to respect the traditions; on the contrary, innovations will fail[11].
The insight into the problems of the Baltic region is combined with hints how civic, social and economic convergence and cohesion between the “old” and the “new” Europe could be supported.
The inherited successful traditions of this region, which are identic with those of the more Western Central European countries are stressed. Cooperation of those who were able to practice continuity, which was interrupted in the East for five decades under imposed regimes, is needed.
The holders of the necessary know-how, the big Western European groupings of this kind, are unwilling to engage in partnerships, on their own account. Therefore, access to the public domains “social economy”, “cooperativism” and “mutuality” has to be opened by knowledgeable volunteers which do not belong to the inner circle of the EU “establishment”.
This paper defines suggestions how the resumption of difficult times tested Baltic traditions with European back-ground could be help to solve actual problems in a pragmatic and excessive costs avoiding way and how and where support from official and private authorities could be helpful and where subventions carry risks.
There are so many similarities between the pre-Sovietic past and the current situation that it seems to be wise and safe to re-activate the inherited systems – of couse, incorporating progress achieved in regions where the traditions continued without interruption.
Wealth and happiness for all cannot be reached but reliable systems to protect the standards of living of the average local people are attainable goals. I offer my professional know-how to those who ask me to collaborate.
Above all, I want to encourage my Noarootsi neighbours to accept the challenges of the new time and to give the right answers, in their own interest and for the sake of the human and natural environment in which they are embedded and which will always be the essence of their lives. The quick progress observed in the past ten years of living among them makes me confident.
I have experimented over the past fifteen years that the rehabilitation of civic society and its supportive structures requires permanent exchange[12] and partnership with persons and institutions which were able save the continuity of the basic structures which, until our days, protect their economic, social and civic life.
These considerations have led to two projects, one of a more general nature, the other, an initiative at the “grass-root” level.
Because of the immanent functional link between cooperativism and sustainable development, both complexes are addressed.
The projects
Project 1: Re-Building the frame-works for cooperatives and mutual societies
This project aims at introducing state-of-the-art laws for cooperatives and mutual societies, which are in-line with the legal heritage[13] of the Baltic region.
Only a few years ago, German specialists recommended to copy laws and by-laws based of their home countries. It was beyond their imagination that the Baltic pre-WWII economic self-help institutions were constituted under rules belonging to the Germanic law culture which since centuries has far reaching European ramifications.
Advisers from Canada recommended the creation of typical North American credit unions and special rules for them in a region where formerly thousands of Central European style savings and loan banks and mutual insurers had successfully operated.
As a preparation for EU membership, the Baltic countries – as the other candidates - had to adopt big numers of European rules, the so-called EU acquis package. Social economy[14] and cooperativism had no weight in the accession preparation process.
It is overdue, to close the gap and to open the path for success promising self-help tools for the average citizen, independent or employed, to provide him with the necessary legal frame-work to protect his economy and his and his family’s subsistence. The most generous official or private welfare can never be a satisfactory substitute for civic society based economic self-help.
The project should start with the collection of “monuments of the economic culture” of this region, i.e. the old cooperative laws and by-laws, together with pre-WWII academic literature on the topic. Tests by the author have proved that a lot of material can be found within the Baltic countries and abroad, not only in the national but also in Western European languages, especially in German.
With this in hand, it could be undertaken to modernize the old legislation with the help of elements taken from compatible modern legislations[15]. Again, the German cooperative law and by-laws, necessarily, will have to be a guidance.
From the first moment on, there should be a close cooperation with the EU Commission which intends to create EU wide standard statutes for cooperatives[16].
Project 2: (Model) local foundation for sustainble development
A few months ago, I presented basic ideas for a “Noarootsi Foundation for Sustainable Development” (see publications list) to my neighbours in this region, to the local authorities and to a local institution for nature and environment protection (SILMA).
SILMA has already shown interest because my concept would provide it with a solid basis to safeguard its future, even if the actual governmental assistance would be reduced or withdrawn.
This nature and environment protection body should also become the nucleus for complementary activities, especially such which would generate income for the local population. This complementary objective will not distort SILMA’ s prime aims.
The initial capital dotation for the new foundation should be derived from the transfer of communal real estate[17]. A monetary dotation would be preferable but funds are not accessible. Real estate transfer is an acceptable alternative, especially if land with value increase potential is included in the transaction.
It can be anticipated that an institution with a solid capital basis will have a much better good-will than an institution which is condemned to ask for grants. The chances to win participation in official reconstruction or development programmes will be improved. Self-financing of projects would also be enabled.
The definition of the range of activities of the foundation will be guided by the (above described) “natural” (including the human factors) resources[18].
It urges that the managers of SILMA prepare the statutes and other formalities of the foundation (i.a. its licensing) and, above all, the proposed property transfers, together with cooperation willing individuals with undoubtable reputation, local, regional and national authorities for civic society affairs and for nature and environment.
Another need is the arrangement of development partnerships with European like-minded institutions[19], especially with such with experience in the economic side of sustainable development. Transfer of know-how for the handling EU rules, regulations and regional development programmes should be part of the partnership, as well.
This project could and should become a model for similar initiatives in other Baltic Sea region and more far away countries, members of the EU and beyond (see above).
Annexes
My baltic references
Actually, I have two residences, one in Germany (close to the city of Bonn – tel. + fax: +49.2642.1532) where I spend the time from late autumn to early summer (October – May), and the other in Noarootsi where I live each year from mid-June until the end of September on a end-of-the-19th century farm (tel. there: +372.47.41193; the e-mail address is always: lewerenz.juergen@freenet.de).
I came to Estonia and to Noarootsi during my time as the first long-term EU Commission (PHARE Programme) adviser for the Baltic countries in 1992, shortly after they had re-won their independence.
In those days, I was attached to the re-activated Estonian Central Bank (Eesti Pank) where I designed the actual currency[20] of the country.
My mission years 1992-1993 were extremely harsh, not only for the citizens of the Baltic countries but also for foreigners as myself[21].
Exchange with the Central Bank officers was difficult or impossible. I was expected to deliver advice without having the opportunity to discuss or to communicate. There was no feed-back, not from my local counterparts, nor from EU Commission headquarters.
During my time as EU adviser and after this period, I collected information about the pre-Soviet financial sector of the Baltic region (see chapter “my documents”); my special interest has always been cooperative and muncipal banking[22].
I managed to interest the apex institutions of the German Cooperatives and of the Savings Banks – Landesbanken groupings, the Federal Government of Germany and the EU Commission in the idea of re-activating the Baltic self-help economy heritage. Several smaller projects took place but not long-term assistance[23].
My identification with the Baltic region and with the highlighted subjects is multifold: Already my forefathers settlet in this region; I was born in Koenigsberg (now Kaliningrad) into a rural mortgage bankers’ family.
My personal and professional back-ground and my economic independence qualify me as a guide for institutions and persons who want to attain the described targets. I voluntarily help others to improve their business but I do not want to profiteer by myself.
My Documents
(directly subject related: bold)
- Banking in the Baltic Region; 300 Years within the European Tradition; Future Outlook after the End of the Soviet Period (Banken im Baltikum, vorgestern, gestern, heute. Morgen?); German; 1996. Frankfurt/Germany (Available in book shops)
- Development of Human Resources for Banking, following Western European Practices (Qualifizierung von Bankkaufleuten). German-English-Estonian language mix. 1993. Kiel/Germany
- Excessive Debt of Developing Countries – Traditional and New Solutions (Überschuldung der Entwicklungsländer). 1988. German. German Savings Banks Association series
- Labour Banks in Latin America and in the Caribbean (Arbeiterbanken in Lateinamerika und in der Karibik). Adapted versions in German, English, Spanish. 1976. Frankfurt/Germany
- Legal Protection of Foreign Investments in Chile (Rechtsschutz ausländischer Investitionen in Chile). 1966. Cologne/Germany
- Excessive Indebtedness - do not address the burning Problem (Der Mantel des Schweigens). German. Afrika Post. 3/1991
- Excessive External Debt of Latin America, History and Outlook (Überschuldung in Lateinamerika - Rückblick, Gegenwart, Perspektiven). Article for: Armut im Süden, Wohlstand im Norden. German. 1988. Hanns Seidel Stiftung
- State Governed and Independent Savings Banks in Colombia (Staatliche und freie Sparkassen in Kolumbien). German. Die Sparkasse. 2/1986
- Human Resource Problems faced by Development Assistance Institutions focussing Self-Help Systems. (Personenbezogene Probleme bei der Selbsthilfeförderung in der Dritten Welt). German. Papers and Reports. No. 16. 1985. Philipps Universität Marburg/Germany
- The Disaster of the Foreign Aid Programmes in Peru after the Fall of the Populist Military Regime in 1976 (Peru - Nach der Entwicklungseuphorie: Die große Verzweiflung). E+Z/D+C. German and Spanish. German Foundation for International Development
- Grameen Bank and Micro Credit; Lesson learned from a Failed Approach: Partnership between State and Business for Self-help in Developing and Reform Countries (Grameen Bank und Mikrokredit; Alternative zum Fehlschlag: Partnerschaft zwischen Staat und Wirtschaft für Selbsthilfe in Reform- und Entwicklungsländern). German. June 1999 (Paper for the German Government (Can be sent by e-mail upon request)
- Development Help Buccaneers and Out-dated Foreign Assistance: Performance of the Bangladesh Financial Sector (Von Selbsthilfe-Gauklern und degenerierter Einmischung. Leistungen des Finanzwesens in Bangladesch). German. Netz, June 2000
- Financial Services in Eastern Reform Countries for the Middle Class Citizen and the General Public (Leistungen der Finanzwirtschaft in den östlichen Reformländern für das mittelständische Bürgertum und die Allgemeinheit). German. 2001 (Can be sent by e-mail upon request)
- Baltic Sea Basin Initiative: Financial Services for the West and the East. German and English. 1994 (Can be sent by e-mail upon request)
- Cooperation with the Central Bank of Uzbekistan (Deutsche Bundesbank / Central Bank of Uzbekistan Development Partnership). German. Feasibility study for GTZ and Deutsche Bundesbank. 1994
- Bank Monthly/Bank Monatsschrift (Six Numbers focussing Banking Systems/ Institutions/ Human Resources Building). Produced during the mission as EU adviser to the emerging Central Bank of Estonia. German and English. Tallinn. 1992/1993
- Consolidation and Development of the Estonian Banking Sector (Memorandum for the EU Commission, the IMF and the international central banking community and other interested institutions and individuals - ahead of the Estonian monetary reform). English. Tallinn. 1992
- Self-Control Systems for Financial Institutions in Estonia and Beyond, i.e. Latvia, Lithuania, possibly also Russia and other Reform Countries (Systems building pre-feasibility study for German Savings Banks Association, Swedish Savings Bank, Swedish Wallenberg Group, Eesti Ühispank Group). English. 1998
- Analysis of the Banking Services for Small and Medium Enterprises and Agriculture in Estonia and Latvia. Structural, Self-Help, Target Group Problems. German. 2000 (Can be sent by e-mail upon request)
- Baltic Social Economy. (Future EU Members Estonia, Latvia and Lithuania). Working Paper for interested public and private institutions of the wider EU). English. December, 2001 (Can be sent by e-mail upon request)
- Baltic Region. Moving towards EU Structural Funds, together with Social and Economic Institutions of Civic Society. (Memorandum for the EU Commission, national and supra-national civic institutions of the wider EU). English. July, 2002 (Can be sent by e-mail upon request)
- Wirtschaftsvereine auf Gegenseitigkeit als Träger eigenverantwortlicher Daseinsvorsorge in der baltischen Region. (Baltic Region: Mutual Societies as Pillars of Self-reliant and Users Driven Protection against Financial Risks of Life). Memorandum for EU and Baltic Region Members of Parliament. German. Jan. 2003 (Can be sent by e-mail upon request)
- Proposal for Cross-Border Mutual Societies Services in the Baltic Region. Memorandum for public and private EU, global and Baltic region promotional bodies and persons. English. Feb. 2003 (Can be sent by e-mail upon request)
- Baltic Region (EU Accession Countries Lithuania, Latvia, Estonia): Mutual Societies (Credit Unions; Mutual Insurers; apex institutions). Assistance Proposal for global, North American and EU “Self-Help Economy” groupings. English. Feb. 2003 (Can be sent by e-mail upon request)
- Users Driven Systems of Protection against Economic Risks of Life. Memorandum for World Bank Working Groups on Civic Society and Social Economy. English. Feb. 2003 (Can be sent by e-mail upon request)
- Baltic Sea Cross-Border Cooperative for Middle Class Economy. (Ostsee-Genossenschaft für den Mittelstand, Rostock). Project Proposal for German Baltic Sea Cities and Interested Groupings. German. April, 2003 (Can be sent by e-mail upon request)
- Network “Cooperatives and New EU”. Working Paper, English and German. 2004 (Can be sent by e-mail upon request)
- Jointly negotiating better terms for home insurance. Flyer for the inhabitants of Noarootsi, Estonia. Estonian; English; German; Swedish. 2004 (Can be sent by e-mail upon request)
- Partnership with a communal initiative for sustainable development in Estonia. (Partnerschaft mit einer kommunalen Initiative für nachhaltige Entwicklung in Estland). Working paper for “Friends of the Earth” and their national counterparts, especially for the German “BUND”. German. 2005 (Can be sent by e-mail upon request)
- Proposal for Noarootsi Development. (Vorschlag für die Entwicklung von Noarootsi). Working paper. German; English. 2004 (Can be sent by e-mail upon request)
- Action Proposal: Cooperative law in the Baltic region. Yesterday; to-day; tomorrow. (Aktionsvorschlag: Genossenschaftsrecht in der baltischen Region. Gestern, heute, morgen). Working paper. German. 2005 (Can be sent by e-mail upon request)
- Baltic Sea Region: Jewish social economy heritage. Working paper. English. 2005. (Can be sent by e-mail upon request)
[1] „Ethnic“ should not be confused with “pure”. In my opinion, pure Estonians do not exist. Since the Middle Ages, local people, especially in the country-side (the towns, until the Industrial Revolution, where places of Germanic craftsmen and merchants; they continued to practise their traditional way of living, especially their association in guilds; out of the spirit of defending business interests. In later centuries, the mutual societies and cooperatives, but also the municipalities based “savings banks” emerged.) mixed with Western new-comers. The Germanic eastward going noblemen were accompanied by young bondsmen from their places of origin (mostly from Lower Saxony-Guestphalia) who married local women. These families developed a peasant’s language, composed of Germanic and Finno-Ugric elements. In the 16th and 17th century Lutheran pastors from Germany and Sweden, unified the different dialects and created literary languages. They translated their German bibles and used the texts to teach the local people reading and writing (as in other Western European regions). The last big up-grading step for the Baltic languages was the drafting of laws and by-laws in the new official Baltic languages.
[2] After the end of WWI, emigration of German Estonians – once a considerable part of the population – started. Under the Hitler-Stalin Pact, many Germans, voluntarily, surrendered their property in favour of the Soviet Union and left the country; many Baltic Grmans settled in occupied Poland as beneficiaries of German State indemnizations on the basis of confiscated “enemy” property. Against the end of WWII, most of the remaining Baltic Germans fled. Also many “ethnic” Estonians abandoned their country. At that time, the Baltic Jews, with very few exceptions, had already become victims of the holocaust.
During the past occupation period, many people originating from different regions of the Soviet Union found jobs in the Baltic Soviet Republics; the majority of these work places have disappeared after the switch to market economy; some of the workers left eastward, others stayed, some obtained Estonian citizenship, others not.
[3] Here understood as: protection of nature and environment protection + compatible income generation
[4] The waiting for ready-made solutions, produced by external advisers, can frequently be observed, an attitude which has much in common with the long practice of submission to “Moscow” orders. The advising specialist is considered as the “owner” of the advice object; consequently, he is expected to assume the responsibility and to build systems and institutions. If he abstains from practising (as a profit seeking businessman) what he advised, he is jugdged as incompetent.
[5] Noarootsi’s centre of gravity is Pürksi (in Swedish or German: Birkas) where the local administration and the „Swedish“ school are. Over the years, close ties between the communal council, the local administration personnel and the teachers have developed. This alliance will fall apart with the municipalities reform which is due and will take place in short time. Noarootsi will merge with neighbour communes and the administration could be shifted to Haapsalu. Noarootsi could influence the new structures positively if, ahead of the reform via a common development initiative of the local governors, the school and the local nature and environment institution.
[6] They are still mainly Finland oriented
[7] The widely used term “participation” is avoided because it is originally meant for soldiers, not for civic movements. It was created by the Pentagon for its specific purposes.
[8] The English language term “social economy” contains a typical Anglo-American vision of the economic side of civic society. It is narrower than the Continental European “cooperativism” concept. Social economy stresses social welfare while the Continental Europeans focuses “associated market economy”. Of course, social aspects are also elements of cooperativism but economic self-determination and emancipation of the middle class and market competition to defend individual economies are at the centre, but not financial transfers and other favours for low income people. The Anglo-American concept has much in common with the collective ideas. Continental European Cooperativism contrasts with Collectivism and Central Command. – In spite of its built-in contradictions, the term “social economy” is unavoidable in an English languate document which addresses persons who follow the international discussion on the subject here in question.
[9] These institutions were governed by the pre-Sovietic Russian Cooperatives Law of 1917 which had much in common with German rules and regulations. The law was one of the few which under the Kerenski Government (the last ahead of the Bolshevik revolution) were dispatched. Because of the political changes, it was not applied in Russia. Nevertheless, the „Baltic Provinces“ practised it, also after their independence from Russia. Some of the „new“ countries used it until 1940, others (e.g. Latvia, in 1937) dispatched own laws (but always keeping the legal heritage and the ties with the German model up-right).
[10] Among the best organised and influential were the (Central European type) Jewish rural and urban cooperative systems in Lithuania; their success was one of the fruits of the extraordinary freedoms, introduced with the help of the League of Nations, for the ethnic and the cultural communities in the newly created States of Lithuania, Latvia and Lithuania.
[11] Right after the fall of the Soviet system, ex-Balts with residence in North America (especially in the Canadian Desjardins region, close to Montreal) promoted, supported by official Foreign Aid, the installation of North American type “Credit Unions” (i.e. closed shop mutual savings and loan societies for poor workers and neighbourhoods). Special laws for this „alien“ model have been dispatched in all three Baltic countries; they provided a legal frame for the Credit Unions but, at the same time, exclude them from the financial market; these Credit Unions are restricted to do business with their members; risks for the banking system were thus prevented, but at the cost of insatisfactory social and insignificant economic functions.
[12] Communcating is still a big problem. The Soviet times habit not to answer a question, is still widely practised. The fear of showing doubts, to ask back or even, to demonstrate gratitude, can be observed frequently. A connected problem is the wide-spread absence of good civic manners. The external adviser is widely considered as a mechanician without personal involvement in his subject.
[13] See in the literature list at the end, the topic „cooperative law in the Baltic region“
[14] Social economy, in the social welfare close Anglo-American but also in the Western Continental European, more market economy close sense (see also foot-note 6)
[15] Perhaps, a first brain-storming work-shop could take place in a near future at the mentioned Swedish boarding school for a dozen persons from the old and the new EU countries
[16] From the beginning on, the EU Commission involved the cooperative associations of the EU member countries but their contributions are low. Especially, the institutions of the “old” EU have shown little interest. The new EU members are, certainly, more open for Commission suggestions. It can be anticipated that the Commission will welcome a cooperation offer.
[17] As most communes in the Eastern European reform countries, which restituted property to the old owners, Noarootsi commune is in “entrusted” possession of vast lands given up by the old owners. These trusteeships are a heavy burden for the local authorities because they involve expenditures which cannot be covered by sales or rent producing investments. Real estate sales, still to-day, require full cash payment on the spot; long-term financing is not accessible for low or middle income persons in rural regions or in small towns. Commercial activities are out of the range of a local administration.
[18] Wind energy is one of the big new issues in this coastal area. Strong economic powers are involved. A balance between profit interests and nature and environment protection has still to be developed. Transparency is required, from the first moment on. The proposed foundation could play a mediator role to settle conflicts between indidual, groupings and general interests and to support the involved authorities.
[19] “Friends of the Earth” and its German and Swedish members, but also an institution of a German Land (Hessen) with experience in Eastern European nature and environment protection projects have been addressed shortly ago.
[20]. From the start on, the Estonian Crown had a peg, the Deutschmark. Transition to the EURO is in course. – My official EU mission was pre-mature and therefore impossible to fulfil; free travel and profiteering from the ruins of the Soviet empire were sought, but not advice for financial services know-how and for professional ethics. When my counterpart, the President of the Central Bank (who had been installed only the week before my arrival), saw from the professional c.v. my central banking back-ground, he asked me (without requesting the EU Commission to re-orient my duties) to provide hints for a monetary reform which had to take place in a few months, in spite of all the insecurities of the time. This was long before the arrival of the first IMF, European Central Banks and World Bank missions. I had to improvise without personal or institutional backing or access to literature. A timely, simple, safe and socially balanced solution had to be found. My recommendation was a copy of the 1948 West German money reform, plus an indemnisation for holders of small USSR ruble savings. The full set of the pertinent German laws - Allied Forces acts (in English and French, with a German translation) - of that time was (slightly) adapted to the Estonian requirements. The briefly after arriving first IMF specialists were surprised to find a complete draft legislation set, accompanied by a professional English translation. The secret behind and my functions were never revealed. (For details see my book “Banking in the Baltic Region” in the annex or contact me personally).
[21] Residences, hotels and offices were almost unheated but extremely expensive. Food and other daily needs articles were not available and therefore, my wife had to go weekly to nearby Helsinki to buy essentials. Telephone conversations, at home and at the working place, were intercepted or blocked. My waste box was searched every night. I was treated as a spy, not as friend. On weekends, my wife and myself recovered in a Swedish style holiday complex at Noarootsi, a place which was heated, where we were able to prepare our own food and where excursions without fear were at reach. Also after the end of my EU mission, I regularly spent my holidays there. Finally, in 1996, I bought a near-by farm, together with my wife, who died in 2003.
[22] See my book “Banking in the Baltic Region”, mentioned in foot-note 18
[23] My employer at that time, the German Federal International Aid Ministry, encharged me (in 2000) with a study on the financial situation of small businesses and farmers (see literature list) in Estonia and Latvia.
The EU Commission appreciated my proposals (see also literature list) to engage in the field of economic self-help but it had to leave the initiative for support requests to the national governments which did not react.
Summary
The core intentions of this paper are to draw the attention on the topic “social economy”, its pre-WWII modalities in Estonia, Latvia and Lithuania, to reflect about the pro’s and possible contra’s of its re-habilitation and to invite to participate in initiatives which support “sustainable” economic, social and civic society “development” and the use of modern competitive Western European “self-help economy” instruments, for the benefit of the average citizen, its local, regional and national environment and for the success of the EU enlargement.
Baltic liberalists and their business friends, at home and abroad, often ridiculise approaches of this kind. They call them romantic, nostalgic and, therefore, not viable. Their rejection hides the fear that their own still fragile, merely profit oriented systems (which actually dominate in the region) could suffer set-backs by the return of Western Europe wide successful cooperative and municipalities based economic, civic society based structures.
Because of the lack of a strong counterweight, as here focused, there is no balanced economy and social and civic society improvements lag behind, in spite of enormous own and externally financed efforts since the political change.
Two topics are specifically targeted:
a) Generation of state-of-the-art, regional historic traditions rooted rules and regulations for cooperatives and mutual societies in the three Baltic countries.
b) Building, from below, of democratic, self-ruled sustainable development systems and institutions, starting with a local initiative for the muncipality of Noarootsi (Estonia) and its inhabitants.
Financial support could complement own efforts; it could help to achieve results quicker; but external help should never become a substitute for the commitment and sacrifice of the final beneficiaries, the future users of the systems, and for the administrative and legal cooperation of national, regional and local authorities.
Sustainable development and cooperativism are natural and all over Western Europe successful allies; they complement each other for the benefit of local communities or human groupings who created and orient them. Because of the high synenergy potential, both are here combined.
The concept is, at the same time, conceptually conservative and innovative. The innovation is to abstain from newly created or exotic models and to choose the old harsh times tested, once omni-present and everywhere successful models of the Baltic region as orientation.
Much of the economic and cultural heritage can be re-activated and adapted to meet the challenge of generating a prosperous future in the European Union.
Cross-border effects, i.a. an irradiation into Russia, Ukraine and the CIS in general, and into Poland and other new EU members, is intended.
model region: noarootsi, estonia
noarootsi’s people
Noarootsi has been chosen because of its unique human mix. Persons who stayed in the region, others who emigrated to escape war and Soviet regime and who returned after the political change and new-comers, as myself, live here together and exchange their specific experience, their views, their wishes and their plans. Human relations are open. From daily experience, people know whom they can trust. Influence from abroad is accepted as normal
At the same time, all difficulties of the so-called transition economy countries can be observed in this place. Dynamism, willingness to change, reticense and hesitation exist side-by-side.
Improvement initiatives undertaken in Noarootsi will produce results which can be applied in other Estonian, Baltic or new EU regions – and perhaps also in Russia and Ukraine; the model function will be a high value side-effect.
The preparatory work and the considerations laid down in this paper recommend to use Noarootsi as the point of departure for more comprehensive actions. Nevertheless, a competition between this place and alternatives with comparable conditions shall not be excluded. Also a joint approach with other regions, inside or outside Estonia, is factible.
In Noarootsi (an Estonian commune - the Swedish resp. German name is: Nuckö – which covers the peninsula of the same name and some adjacent areas is close to the middle town of Haapsalu - in German or Swedish: Hapsal - a spa and sea-side resort, famous since the Tsars’ times) and several places nearby there are, since centuries, apart from “ethnic[1]” Estonian settlers, Swedish origin Estonians.
During WWII, most Swedish Estonians fled to Sweden where they were treated as Swedish citizens. After the end of the “cold war”, numerous Swedish Estonians settle again on the restituted lands of their ancestors, without giving up their connections with Sweden. There are family ties between them and those who stayed in the country. They are acceped as equals and as integral parts of the national civic society.
War and post-war events destroyed, almost completely, the traditional Baltic civic society[2] and its systems and institutions.
The few traditions oriented persons, who survived in this region under the occupation regime, had to keep silent; ties among like-minded persons weakened. Fifteen years after the political changes, the fear to unite is still present. Those who grew up under Soviet rule, never heard of the former self-governed, democractic economic self-help systems of their pre-decessors. It is hard to convince them that looking back is helpful to meet the challenges of to-day and the future.
The Soviet rulers perverted the inherited cooperativism concepts. Still to-day, very few people differentiate beween central State command driven collectives called “cooperatives” and traditional Continental European institutions with the same name which are designed and destined to serve individuals.
This makes initiatives difficult which try to re-vitalize the once wide-spread and successful spirit of cooperativism and mutualism. The willingness of the citizens to unite with the objective to defend common interests, i.a. to support sustainable development[3], remains weak.
The returning Swedish Estonians are more open for Western European cooperative ideas than those who have experimented the highly effective Soviet brain-washing. The exchange of views between groups with contrasting life experience is a specific Noarootsi asset which can support the “normalization” process – and the proposed approaches.
The willingness to accept[4] assistance from experienced external out-siders is still a problem. After re-winning independence, many insist in the right to own mistakes. The danger of wasting time, energy and chances when trying to “re-invent the wheel” is under-estimated by them.
In spite of these difficulties, I have commited myself to identify external and internal partners and to persuade them to transfer their know-how and to establish durable connections with the region here in question because I am convinced that sustainable development is a challenge, but also a realistic option for Noarootsi and that the appropriate vehicle for this aim is cooperativism.
Resources of Noarootsi[5]
Noarootsi has no booming industries, nor exceptionally fertil soils. There is no mineral wealth in the region. Nevertheless, since centuries, the inhabitants were able to reach a modest but safe well-being, on the basis of their entrepreneurial spirit and an intelligent use of the existing resources.
In former times, much more people were able to secure their livelihood there than the small population which now is settling in the region. The former and the actual resources are widely the same. They can be used more intensely (e.g. berries and mushrooms from the forests and excellent products derived from them) without damaging or destroying nature and natural cycles.
The resources which merit to be mentioned in first place, are the region’s calmness and its many free, though always accessible places with many species of fauna and flora which are extincted elsewhere.
Experience in other European regions teaches that care for nature and environment is necessary, nevertheless. Authorities and private institutions are aware of this need and have reached considerable achievements. EU rules and regulations is a new field for which know-how transfer is highly necessary and would be welcome.
Big, comparatively healthy forests are here but also open moorlands, marshes and meadows. Long beaches with few visitors – even during summer time, big and small lakes, the smaller hidden in the forests, and quiet creeks are to be found.
After the withdrawal of the occupationist frontier soldiers, who hunted everything to increase their food supply, more and more animal species returned to this place. Millions of migratory birds are in the fields, on the lakes and in the sea, during spring and autumn.
There is an increasing number of biker paths for short and long excursions. Horse riding is everywhere possible; horses can be rented at some places. Wildlife observation posts are installed. Natural reserves and no-go areas within them are clearly signalled. At central points, close to the long but never over-crowded beaches, good parking grounds and simple but cosy and clean shelters have been erected; waste is collected.
Big hotel complexes or ugly and land consuming caravaning grounds do not exist – and, hopefully, will never exist. There is a Swedish style holiday complex which fits well into the nature.
Noarootsi is an ideal place for “soft” (and – to safeguard high standards - strictly controlled) high quality tourism and for summer or longer term residences on re-furbished traditional farms.
This will never be a place for mass tourists who expect that everything is pre-arranged by vacation mangers and monitors. The motto for the region could be “come to uneventful Noarootsi and seize the opportunity to arrange everything, as you wish it”.
In near-by Haapsalu there are well equiped mud-baths with a two centuries old reputation. The Tsars, the nobility and their entourage came here every year before WWI. The fine extra-long railway station where these people used to arrive, has been carefully restored.
Rehabilitative medicine centres[6], one clean, friendly but rather modest, the others for a more demanding clientèle, exist already exist in Haapsalu.
Similar institutions (perhaps also nursing homes) could be established in Noarootsi. EU health insurers would welcome offers of good service at costs, far below those of German or Scandinavian centres. This would be an attractive alternative for hiring Baltic personnel for jobs abroad.
There is a “Swedish” boarding school at Pürksi. It has its roots in a (1940 closed) Scandinavian type adult education centre which had the objective to raise the cultural and know-how standards of the (Swedish and other Estonian’s) peasant’s and fishermen’s daughters and sons. During the Soviet years, the school received considerable help from the Swedish Crown; the funds were invested in excellent installations. The school and the residences remain vacant during the long summer holidays when they could be used for other purposes.
I suggest to host in the school and its residential annexes Baltic Sea Basin wide summer events, e.g. for discussing subjects as “sustainable development” and “cooperativism”. This would generated some income for the school and would create a specific international image of Noarootsi.
Problems and Solution options
The trap of external financial grant should be avoided because donations normally lead to short-lived results and to profiteering, instead of authentic self-help and sustainability. Volunteering should dominate, at least during the start period.
Participation in official reconstruction and development programmes shall not be left aside for all times. But ahead of approaching them, solid structures have to be erected which are destined to enable safe though slow progress towards growth and prosperity. Official programmes can accelerate on-going processes but they cannot substitute indidual sacrifice for a common goal.
“Development from above” usually fails. Co-determination[7] of the final beneficiaries is essential, together with democratic self-governed but, at the same time, control (audit) mechanisms. Only this produces real “ownership”.
These observations, necessarily, lead to cooperativism principles, methodologies and practices. “Social economy[8]”cannot succeed without the cooperation of local (or regional) civic society, nor leaving aside the successful experience of cooperativism – especially its role in the rebuilding of post-war Western Europe.
The lessons of the recent and the more far-back past were neglected during the EU-accession process; the unjustified expectation that free market forces would generate automatically civic, social and economic progress became a credo.
The Baltic region possesses a rich cooperativism tradition. Until 1940, thousands of cooperatives and mutual societies[9] operated and backed the economic “middle class”[10]. Their number exceeded that of their German, Austrian, Swiss or Scandinavian homologues.
These institutions were closed – but never dissolved – in 1940. It would be worth-while trying to re-activate some of them with the alternative objectives, or to start again commercial operations, or to use property restituted to them for the support of new initiatives in the old spirit.
In any case, a fresh start has to respect the traditions; on the contrary, innovations will fail[11].
The insight into the problems of the Baltic region is combined with hints how civic, social and economic convergence and cohesion between the “old” and the “new” Europe could be supported.
The inherited successful traditions of this region, which are identic with those of the more Western Central European countries are stressed. Cooperation of those who were able to practice continuity, which was interrupted in the East for five decades under imposed regimes, is needed.
The holders of the necessary know-how, the big Western European groupings of this kind, are unwilling to engage in partnerships, on their own account. Therefore, access to the public domains “social economy”, “cooperativism” and “mutuality” has to be opened by knowledgeable volunteers which do not belong to the inner circle of the EU “establishment”.
This paper defines suggestions how the resumption of difficult times tested Baltic traditions with European back-ground could be help to solve actual problems in a pragmatic and excessive costs avoiding way and how and where support from official and private authorities could be helpful and where subventions carry risks.
There are so many similarities between the pre-Sovietic past and the current situation that it seems to be wise and safe to re-activate the inherited systems – of couse, incorporating progress achieved in regions where the traditions continued without interruption.
Wealth and happiness for all cannot be reached but reliable systems to protect the standards of living of the average local people are attainable goals. I offer my professional know-how to those who ask me to collaborate.
Above all, I want to encourage my Noarootsi neighbours to accept the challenges of the new time and to give the right answers, in their own interest and for the sake of the human and natural environment in which they are embedded and which will always be the essence of their lives. The quick progress observed in the past ten years of living among them makes me confident.
I have experimented over the past fifteen years that the rehabilitation of civic society and its supportive structures requires permanent exchange[12] and partnership with persons and institutions which were able save the continuity of the basic structures which, until our days, protect their economic, social and civic life.
These considerations have led to two projects, one of a more general nature, the other, an initiative at the “grass-root” level.
Because of the immanent functional link between cooperativism and sustainable development, both complexes are addressed.
The projects
Project 1: Re-Building the frame-works for cooperatives and mutual societies
This project aims at introducing state-of-the-art laws for cooperatives and mutual societies, which are in-line with the legal heritage[13] of the Baltic region.
Only a few years ago, German specialists recommended to copy laws and by-laws based of their home countries. It was beyond their imagination that the Baltic pre-WWII economic self-help institutions were constituted under rules belonging to the Germanic law culture which since centuries has far reaching European ramifications.
Advisers from Canada recommended the creation of typical North American credit unions and special rules for them in a region where formerly thousands of Central European style savings and loan banks and mutual insurers had successfully operated.
As a preparation for EU membership, the Baltic countries – as the other candidates - had to adopt big numers of European rules, the so-called EU acquis package. Social economy[14] and cooperativism had no weight in the accession preparation process.
It is overdue, to close the gap and to open the path for success promising self-help tools for the average citizen, independent or employed, to provide him with the necessary legal frame-work to protect his economy and his and his family’s subsistence. The most generous official or private welfare can never be a satisfactory substitute for civic society based economic self-help.
The project should start with the collection of “monuments of the economic culture” of this region, i.e. the old cooperative laws and by-laws, together with pre-WWII academic literature on the topic. Tests by the author have proved that a lot of material can be found within the Baltic countries and abroad, not only in the national but also in Western European languages, especially in German.
With this in hand, it could be undertaken to modernize the old legislation with the help of elements taken from compatible modern legislations[15]. Again, the German cooperative law and by-laws, necessarily, will have to be a guidance.
From the first moment on, there should be a close cooperation with the EU Commission which intends to create EU wide standard statutes for cooperatives[16].
Project 2: (Model) local foundation for sustainble development
A few months ago, I presented basic ideas for a “Noarootsi Foundation for Sustainable Development” (see publications list) to my neighbours in this region, to the local authorities and to a local institution for nature and environment protection (SILMA).
SILMA has already shown interest because my concept would provide it with a solid basis to safeguard its future, even if the actual governmental assistance would be reduced or withdrawn.
This nature and environment protection body should also become the nucleus for complementary activities, especially such which would generate income for the local population. This complementary objective will not distort SILMA’ s prime aims.
The initial capital dotation for the new foundation should be derived from the transfer of communal real estate[17]. A monetary dotation would be preferable but funds are not accessible. Real estate transfer is an acceptable alternative, especially if land with value increase potential is included in the transaction.
It can be anticipated that an institution with a solid capital basis will have a much better good-will than an institution which is condemned to ask for grants. The chances to win participation in official reconstruction or development programmes will be improved. Self-financing of projects would also be enabled.
The definition of the range of activities of the foundation will be guided by the (above described) “natural” (including the human factors) resources[18].
It urges that the managers of SILMA prepare the statutes and other formalities of the foundation (i.a. its licensing) and, above all, the proposed property transfers, together with cooperation willing individuals with undoubtable reputation, local, regional and national authorities for civic society affairs and for nature and environment.
Another need is the arrangement of development partnerships with European like-minded institutions[19], especially with such with experience in the economic side of sustainable development. Transfer of know-how for the handling EU rules, regulations and regional development programmes should be part of the partnership, as well.
This project could and should become a model for similar initiatives in other Baltic Sea region and more far away countries, members of the EU and beyond (see above).
Annexes
My baltic references
Actually, I have two residences, one in Germany (close to the city of Bonn – tel. + fax: +49.2642.1532) where I spend the time from late autumn to early summer (October – May), and the other in Noarootsi where I live each year from mid-June until the end of September on a end-of-the-19th century farm (tel. there: +372.47.41193; the e-mail address is always: lewerenz.juergen@freenet.de).
I came to Estonia and to Noarootsi during my time as the first long-term EU Commission (PHARE Programme) adviser for the Baltic countries in 1992, shortly after they had re-won their independence.
In those days, I was attached to the re-activated Estonian Central Bank (Eesti Pank) where I designed the actual currency[20] of the country.
My mission years 1992-1993 were extremely harsh, not only for the citizens of the Baltic countries but also for foreigners as myself[21].
Exchange with the Central Bank officers was difficult or impossible. I was expected to deliver advice without having the opportunity to discuss or to communicate. There was no feed-back, not from my local counterparts, nor from EU Commission headquarters.
During my time as EU adviser and after this period, I collected information about the pre-Soviet financial sector of the Baltic region (see chapter “my documents”); my special interest has always been cooperative and muncipal banking[22].
I managed to interest the apex institutions of the German Cooperatives and of the Savings Banks – Landesbanken groupings, the Federal Government of Germany and the EU Commission in the idea of re-activating the Baltic self-help economy heritage. Several smaller projects took place but not long-term assistance[23].
My identification with the Baltic region and with the highlighted subjects is multifold: Already my forefathers settlet in this region; I was born in Koenigsberg (now Kaliningrad) into a rural mortgage bankers’ family.
My personal and professional back-ground and my economic independence qualify me as a guide for institutions and persons who want to attain the described targets. I voluntarily help others to improve their business but I do not want to profiteer by myself.
My Documents
(directly subject related: bold)
- Banking in the Baltic Region; 300 Years within the European Tradition; Future Outlook after the End of the Soviet Period (Banken im Baltikum, vorgestern, gestern, heute. Morgen?); German; 1996. Frankfurt/Germany (Available in book shops)
- Development of Human Resources for Banking, following Western European Practices (Qualifizierung von Bankkaufleuten). German-English-Estonian language mix. 1993. Kiel/Germany
- Excessive Debt of Developing Countries – Traditional and New Solutions (Überschuldung der Entwicklungsländer). 1988. German. German Savings Banks Association series
- Labour Banks in Latin America and in the Caribbean (Arbeiterbanken in Lateinamerika und in der Karibik). Adapted versions in German, English, Spanish. 1976. Frankfurt/Germany
- Legal Protection of Foreign Investments in Chile (Rechtsschutz ausländischer Investitionen in Chile). 1966. Cologne/Germany
- Excessive Indebtedness - do not address the burning Problem (Der Mantel des Schweigens). German. Afrika Post. 3/1991
- Excessive External Debt of Latin America, History and Outlook (Überschuldung in Lateinamerika - Rückblick, Gegenwart, Perspektiven). Article for: Armut im Süden, Wohlstand im Norden. German. 1988. Hanns Seidel Stiftung
- State Governed and Independent Savings Banks in Colombia (Staatliche und freie Sparkassen in Kolumbien). German. Die Sparkasse. 2/1986
- Human Resource Problems faced by Development Assistance Institutions focussing Self-Help Systems. (Personenbezogene Probleme bei der Selbsthilfeförderung in der Dritten Welt). German. Papers and Reports. No. 16. 1985. Philipps Universität Marburg/Germany
- The Disaster of the Foreign Aid Programmes in Peru after the Fall of the Populist Military Regime in 1976 (Peru - Nach der Entwicklungseuphorie: Die große Verzweiflung). E+Z/D+C. German and Spanish. German Foundation for International Development
- Grameen Bank and Micro Credit; Lesson learned from a Failed Approach: Partnership between State and Business for Self-help in Developing and Reform Countries (Grameen Bank und Mikrokredit; Alternative zum Fehlschlag: Partnerschaft zwischen Staat und Wirtschaft für Selbsthilfe in Reform- und Entwicklungsländern). German. June 1999 (Paper for the German Government (Can be sent by e-mail upon request)
- Development Help Buccaneers and Out-dated Foreign Assistance: Performance of the Bangladesh Financial Sector (Von Selbsthilfe-Gauklern und degenerierter Einmischung. Leistungen des Finanzwesens in Bangladesch). German. Netz, June 2000
- Financial Services in Eastern Reform Countries for the Middle Class Citizen and the General Public (Leistungen der Finanzwirtschaft in den östlichen Reformländern für das mittelständische Bürgertum und die Allgemeinheit). German. 2001 (Can be sent by e-mail upon request)
- Baltic Sea Basin Initiative: Financial Services for the West and the East. German and English. 1994 (Can be sent by e-mail upon request)
- Cooperation with the Central Bank of Uzbekistan (Deutsche Bundesbank / Central Bank of Uzbekistan Development Partnership). German. Feasibility study for GTZ and Deutsche Bundesbank. 1994
- Bank Monthly/Bank Monatsschrift (Six Numbers focussing Banking Systems/ Institutions/ Human Resources Building). Produced during the mission as EU adviser to the emerging Central Bank of Estonia. German and English. Tallinn. 1992/1993
- Consolidation and Development of the Estonian Banking Sector (Memorandum for the EU Commission, the IMF and the international central banking community and other interested institutions and individuals - ahead of the Estonian monetary reform). English. Tallinn. 1992
- Self-Control Systems for Financial Institutions in Estonia and Beyond, i.e. Latvia, Lithuania, possibly also Russia and other Reform Countries (Systems building pre-feasibility study for German Savings Banks Association, Swedish Savings Bank, Swedish Wallenberg Group, Eesti Ühispank Group). English. 1998
- Analysis of the Banking Services for Small and Medium Enterprises and Agriculture in Estonia and Latvia. Structural, Self-Help, Target Group Problems. German. 2000 (Can be sent by e-mail upon request)
- Baltic Social Economy. (Future EU Members Estonia, Latvia and Lithuania). Working Paper for interested public and private institutions of the wider EU). English. December, 2001 (Can be sent by e-mail upon request)
- Baltic Region. Moving towards EU Structural Funds, together with Social and Economic Institutions of Civic Society. (Memorandum for the EU Commission, national and supra-national civic institutions of the wider EU). English. July, 2002 (Can be sent by e-mail upon request)
- Wirtschaftsvereine auf Gegenseitigkeit als Träger eigenverantwortlicher Daseinsvorsorge in der baltischen Region. (Baltic Region: Mutual Societies as Pillars of Self-reliant and Users Driven Protection against Financial Risks of Life). Memorandum for EU and Baltic Region Members of Parliament. German. Jan. 2003 (Can be sent by e-mail upon request)
- Proposal for Cross-Border Mutual Societies Services in the Baltic Region. Memorandum for public and private EU, global and Baltic region promotional bodies and persons. English. Feb. 2003 (Can be sent by e-mail upon request)
- Baltic Region (EU Accession Countries Lithuania, Latvia, Estonia): Mutual Societies (Credit Unions; Mutual Insurers; apex institutions). Assistance Proposal for global, North American and EU “Self-Help Economy” groupings. English. Feb. 2003 (Can be sent by e-mail upon request)
- Users Driven Systems of Protection against Economic Risks of Life. Memorandum for World Bank Working Groups on Civic Society and Social Economy. English. Feb. 2003 (Can be sent by e-mail upon request)
- Baltic Sea Cross-Border Cooperative for Middle Class Economy. (Ostsee-Genossenschaft für den Mittelstand, Rostock). Project Proposal for German Baltic Sea Cities and Interested Groupings. German. April, 2003 (Can be sent by e-mail upon request)
- Network “Cooperatives and New EU”. Working Paper, English and German. 2004 (Can be sent by e-mail upon request)
- Jointly negotiating better terms for home insurance. Flyer for the inhabitants of Noarootsi, Estonia. Estonian; English; German; Swedish. 2004 (Can be sent by e-mail upon request)
- Partnership with a communal initiative for sustainable development in Estonia. (Partnerschaft mit einer kommunalen Initiative für nachhaltige Entwicklung in Estland). Working paper for “Friends of the Earth” and their national counterparts, especially for the German “BUND”. German. 2005 (Can be sent by e-mail upon request)
- Proposal for Noarootsi Development. (Vorschlag für die Entwicklung von Noarootsi). Working paper. German; English. 2004 (Can be sent by e-mail upon request)
- Action Proposal: Cooperative law in the Baltic region. Yesterday; to-day; tomorrow. (Aktionsvorschlag: Genossenschaftsrecht in der baltischen Region. Gestern, heute, morgen). Working paper. German. 2005 (Can be sent by e-mail upon request)
- Baltic Sea Region: Jewish social economy heritage. Working paper. English. 2005. (Can be sent by e-mail upon request)
[1] „Ethnic“ should not be confused with “pure”. In my opinion, pure Estonians do not exist. Since the Middle Ages, local people, especially in the country-side (the towns, until the Industrial Revolution, where places of Germanic craftsmen and merchants; they continued to practise their traditional way of living, especially their association in guilds; out of the spirit of defending business interests. In later centuries, the mutual societies and cooperatives, but also the municipalities based “savings banks” emerged.) mixed with Western new-comers. The Germanic eastward going noblemen were accompanied by young bondsmen from their places of origin (mostly from Lower Saxony-Guestphalia) who married local women. These families developed a peasant’s language, composed of Germanic and Finno-Ugric elements. In the 16th and 17th century Lutheran pastors from Germany and Sweden, unified the different dialects and created literary languages. They translated their German bibles and used the texts to teach the local people reading and writing (as in other Western European regions). The last big up-grading step for the Baltic languages was the drafting of laws and by-laws in the new official Baltic languages.
[2] After the end of WWI, emigration of German Estonians – once a considerable part of the population – started. Under the Hitler-Stalin Pact, many Germans, voluntarily, surrendered their property in favour of the Soviet Union and left the country; many Baltic Grmans settled in occupied Poland as beneficiaries of German State indemnizations on the basis of confiscated “enemy” property. Against the end of WWII, most of the remaining Baltic Germans fled. Also many “ethnic” Estonians abandoned their country. At that time, the Baltic Jews, with very few exceptions, had already become victims of the holocaust.
During the past occupation period, many people originating from different regions of the Soviet Union found jobs in the Baltic Soviet Republics; the majority of these work places have disappeared after the switch to market economy; some of the workers left eastward, others stayed, some obtained Estonian citizenship, others not.
[3] Here understood as: protection of nature and environment protection + compatible income generation
[4] The waiting for ready-made solutions, produced by external advisers, can frequently be observed, an attitude which has much in common with the long practice of submission to “Moscow” orders. The advising specialist is considered as the “owner” of the advice object; consequently, he is expected to assume the responsibility and to build systems and institutions. If he abstains from practising (as a profit seeking businessman) what he advised, he is jugdged as incompetent.
[5] Noarootsi’s centre of gravity is Pürksi (in Swedish or German: Birkas) where the local administration and the „Swedish“ school are. Over the years, close ties between the communal council, the local administration personnel and the teachers have developed. This alliance will fall apart with the municipalities reform which is due and will take place in short time. Noarootsi will merge with neighbour communes and the administration could be shifted to Haapsalu. Noarootsi could influence the new structures positively if, ahead of the reform via a common development initiative of the local governors, the school and the local nature and environment institution.
[6] They are still mainly Finland oriented
[7] The widely used term “participation” is avoided because it is originally meant for soldiers, not for civic movements. It was created by the Pentagon for its specific purposes.
[8] The English language term “social economy” contains a typical Anglo-American vision of the economic side of civic society. It is narrower than the Continental European “cooperativism” concept. Social economy stresses social welfare while the Continental Europeans focuses “associated market economy”. Of course, social aspects are also elements of cooperativism but economic self-determination and emancipation of the middle class and market competition to defend individual economies are at the centre, but not financial transfers and other favours for low income people. The Anglo-American concept has much in common with the collective ideas. Continental European Cooperativism contrasts with Collectivism and Central Command. – In spite of its built-in contradictions, the term “social economy” is unavoidable in an English languate document which addresses persons who follow the international discussion on the subject here in question.
[9] These institutions were governed by the pre-Sovietic Russian Cooperatives Law of 1917 which had much in common with German rules and regulations. The law was one of the few which under the Kerenski Government (the last ahead of the Bolshevik revolution) were dispatched. Because of the political changes, it was not applied in Russia. Nevertheless, the „Baltic Provinces“ practised it, also after their independence from Russia. Some of the „new“ countries used it until 1940, others (e.g. Latvia, in 1937) dispatched own laws (but always keeping the legal heritage and the ties with the German model up-right).
[10] Among the best organised and influential were the (Central European type) Jewish rural and urban cooperative systems in Lithuania; their success was one of the fruits of the extraordinary freedoms, introduced with the help of the League of Nations, for the ethnic and the cultural communities in the newly created States of Lithuania, Latvia and Lithuania.
[11] Right after the fall of the Soviet system, ex-Balts with residence in North America (especially in the Canadian Desjardins region, close to Montreal) promoted, supported by official Foreign Aid, the installation of North American type “Credit Unions” (i.e. closed shop mutual savings and loan societies for poor workers and neighbourhoods). Special laws for this „alien“ model have been dispatched in all three Baltic countries; they provided a legal frame for the Credit Unions but, at the same time, exclude them from the financial market; these Credit Unions are restricted to do business with their members; risks for the banking system were thus prevented, but at the cost of insatisfactory social and insignificant economic functions.
[12] Communcating is still a big problem. The Soviet times habit not to answer a question, is still widely practised. The fear of showing doubts, to ask back or even, to demonstrate gratitude, can be observed frequently. A connected problem is the wide-spread absence of good civic manners. The external adviser is widely considered as a mechanician without personal involvement in his subject.
[13] See in the literature list at the end, the topic „cooperative law in the Baltic region“
[14] Social economy, in the social welfare close Anglo-American but also in the Western Continental European, more market economy close sense (see also foot-note 6)
[15] Perhaps, a first brain-storming work-shop could take place in a near future at the mentioned Swedish boarding school for a dozen persons from the old and the new EU countries
[16] From the beginning on, the EU Commission involved the cooperative associations of the EU member countries but their contributions are low. Especially, the institutions of the “old” EU have shown little interest. The new EU members are, certainly, more open for Commission suggestions. It can be anticipated that the Commission will welcome a cooperation offer.
[17] As most communes in the Eastern European reform countries, which restituted property to the old owners, Noarootsi commune is in “entrusted” possession of vast lands given up by the old owners. These trusteeships are a heavy burden for the local authorities because they involve expenditures which cannot be covered by sales or rent producing investments. Real estate sales, still to-day, require full cash payment on the spot; long-term financing is not accessible for low or middle income persons in rural regions or in small towns. Commercial activities are out of the range of a local administration.
[18] Wind energy is one of the big new issues in this coastal area. Strong economic powers are involved. A balance between profit interests and nature and environment protection has still to be developed. Transparency is required, from the first moment on. The proposed foundation could play a mediator role to settle conflicts between indidual, groupings and general interests and to support the involved authorities.
[19] “Friends of the Earth” and its German and Swedish members, but also an institution of a German Land (Hessen) with experience in Eastern European nature and environment protection projects have been addressed shortly ago.
[20]. From the start on, the Estonian Crown had a peg, the Deutschmark. Transition to the EURO is in course. – My official EU mission was pre-mature and therefore impossible to fulfil; free travel and profiteering from the ruins of the Soviet empire were sought, but not advice for financial services know-how and for professional ethics. When my counterpart, the President of the Central Bank (who had been installed only the week before my arrival), saw from the professional c.v. my central banking back-ground, he asked me (without requesting the EU Commission to re-orient my duties) to provide hints for a monetary reform which had to take place in a few months, in spite of all the insecurities of the time. This was long before the arrival of the first IMF, European Central Banks and World Bank missions. I had to improvise without personal or institutional backing or access to literature. A timely, simple, safe and socially balanced solution had to be found. My recommendation was a copy of the 1948 West German money reform, plus an indemnisation for holders of small USSR ruble savings. The full set of the pertinent German laws - Allied Forces acts (in English and French, with a German translation) - of that time was (slightly) adapted to the Estonian requirements. The briefly after arriving first IMF specialists were surprised to find a complete draft legislation set, accompanied by a professional English translation. The secret behind and my functions were never revealed. (For details see my book “Banking in the Baltic Region” in the annex or contact me personally).
[21] Residences, hotels and offices were almost unheated but extremely expensive. Food and other daily needs articles were not available and therefore, my wife had to go weekly to nearby Helsinki to buy essentials. Telephone conversations, at home and at the working place, were intercepted or blocked. My waste box was searched every night. I was treated as a spy, not as friend. On weekends, my wife and myself recovered in a Swedish style holiday complex at Noarootsi, a place which was heated, where we were able to prepare our own food and where excursions without fear were at reach. Also after the end of my EU mission, I regularly spent my holidays there. Finally, in 1996, I bought a near-by farm, together with my wife, who died in 2003.
[22] See my book “Banking in the Baltic Region”, mentioned in foot-note 18
[23] My employer at that time, the German Federal International Aid Ministry, encharged me (in 2000) with a study on the financial situation of small businesses and farmers (see literature list) in Estonia and Latvia.
The EU Commission appreciated my proposals (see also literature list) to engage in the field of economic self-help but it had to leave the initiative for support requests to the national governments which did not react.
posted by Juergen Lewerenz at 9:59 AM
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