THE ROLE OF COMMUNITY BUSINESS FOR SUSTAINABLE DEVELOPMENT IN MONGOLIA

1. THE ROLE OF COMMUNITY BUSINESS FOR SUSTAINABLE DEVELOPMENT IN MONGOLIA Dr. Kee-SeonYoo Handong Global University

2. Table of Contents Introduction • Mongolia’s Rapid Industrialization, Its Issues and Benefits What is Community Business • Concept of Community Business • Background of Community Business • Classification of Community Business • Effect of Community Business Case Examples of Community Business • Developed Countries: England(Proper Job), • Japan(Morutowa) • Developing Countries: Kenya(Honey Care Africa), • Rwanda (Sustainable Health Enterprise) Conclusion • Direction of Mongolian Development Strategy

3. Rapid Industrialization of Mongolia, Its Issues and Benefits Exponential Growth of Mongolia [2005.4th Quarter ~ 2012.4th Quarter]

4. Rapid Industrialization of Mongolia, Its Issues and Benefits However, Many Issues Existing on the Other Side • Reduction of non-mining industries compared to mining industries centered growth • Population centralizing phenomenon in the metropolitan – 61% of Mongolian Population • Intensification of the gap between urban and rural area • Mitigating Poverty Rate compared to GrowthRate • Sustainable Development through Community Business

5. Gross National Happiness (GNH) • Gross National Happiness (GNH) is an attempt to define quality of life in a more holistic and psychological terms than Gross National Product. • GNH is based on the assertion that true development of human society takes place when material and spiritual development occur side by side to complement and reinforce each other

6. Top Down Approach • The top-down model is structured around the use of professional leadership provided by external resources that plan, implement, and evaluate development programs (Macdonald, 1995). • Focused on providing professional leadership to the development process coupled with supportive concrete services. • Through the process of residents following the external leadership and accessing the services offered by the program. • The top-down model dominated the way development programs were structured during the early practice period of development history (Moore, 1995; Lecomte, 1986).

7. Bottom Up Approach • These strategies included: • Comprehensive community participation, • Motivating local communities, • Expanding learning opportunities, • Improving local resource management, • Replicating human development, • Increasing communication and interchange, • Localizing financial access. • Focused on how people within communities could direct their own development process (David, 1993; Midgley, 1993).

8. Two Models of Economic Development Traditional Economic Development Community Economic Development • Sustainable development “people centered development” • Fosters social transformation to local ownership with philanthropic and public subsidies to grow local community and resident assets • Assumes that job quality and workforce development are needed but only part of the solution • Residents are active stakeholders who should have meaningful control of their community and participation in the project definition and development process • Control and allocation of resources should be a partnership with community residents • Growth “the bigger the better”/catch the “silver bullet” • Attract outside large capital projects with tax credits and other subsidies for the benefit of outside investors • Assumes that job creation and workforce development will resolve the problems of the poor • Residents are passive stakeholders whose involvement is to give legitimacy to the project • Control and allocation of resources in the hands of government and their development designees

9. Community Economic Development Objectives (Shragge, 1997) • Conventional CED Perspective – Business development to increase private investment and employment – Participation of residents to provide legitimacy • Progressive CED Perspective – Social transformation of the economy to benefit the grassroots – Include the poor as participants in the project definition and development process

10. Background of Community Business 1) Polarization of the Economy and Deterioration of Employment Status Deterioration of rural area and low investment phenomenon due to metropolitan-centered development. Resulting aggravate of income gap and polarization -> Create employment from the local, virtuous cyclic process of development in the area by reinvesting the profit generated through community business 2) Limitation of Regional Development Relying on External Resources Problems of short-sighted government policies and no continuous stimulation for the participation of local people -> Possibilities to solve the fundamental and long-term problems from the participations of the local residents who well understand the situation of the local problem by establish its own rules and regulations for the solution 3) Deterioration of Local Community Deterioration of the local community and the gap between urban and rural area further expands due to the progress of urbanization However, through community business the local residents can strongly request for required resources, efficiently utilize them and bring positive effect by supporting the economy from activation of its own local economic activity

11. What is Community Business? • CB is a type of social business that 1) local people has initiate 2) to solve the local problems and request of local people 3) tries to achieve the community vision and high quality of life and welfare of local community 4) by using corporative way to make profit. • Making Profit is just necessary condition, not sufficient condition. • The concept was introduced in the late 90’s ex) 20% of British private corporations are CB

12. What is Community Business? • “The word first established near Scotland, England in 1970-1980, defining economic independence of a local community by creating jobs through sustainable venture business” (Pearce,1993) “The local residents utilize local dormant resources aiming to resolve local issues by performing profitable small business” • (Kyushu Region Community Business Research Report, 2002) • “Sales activity to expand and to improve the range of service and merchandise that is beneficial to the local community by reinvesting excess profit or arise of local demands” • (Lee JaSung), 2010) • “Contributions to improve the welfare and the life quality of the local residents, who are the principal agents to solve the demands and the issues of the local community” • (Fukuoka, 2003, Local Business Survey)

13. What is Community Business? Business with appropriate-size and optimal-profit Community based business led by local resident Component of Community Business Middle of business and voluntary service (Social Enterprise) Opened Glocal Business

14. What is Community Business?

15. Effect of Community Business • Re-Humanization • Self-fulfillment and activation of community from personal efforts • Implant of network • Succession of Culture • Accumulation of wisdom • Creation of diverse community and its unique culture • Organization of community • Solution for Social Issues • Social service satisfying needs • Reduction of Environmental Load Self-Reliance of Community Business • Establishment of Economic Base • Use of technology and resources and creation of employment • Investment on community

16. Classification of Community Business Local Restoration Utilization of Local Resource Individual Independence Promote rejuvenation to the vacant suburban area and the conventional market Environment Improvement Livelihood Assistance Intermediate Assistance Support

17. Classification of Community Business Local Restoration Utilization of Local Resource Individual Independence Purpose of utilizing local resources such as local specialties and excavating and commercializing attractive resources Environment Improvement Livelihood Assistance Intermediate Assistance Support

18. Classification of Community Business Local Restoration Utilization of Local Resource Service form of community business that supports local resident’s participation in economic activities; its purpose is to support individual employment or entrepreneurship through employment training, entrepreneurship training and etc Individual Independence Environment Improvement Livelihood Assistance Intermediate Assistance Support

19. Classification of Community Business Local Restoration Utilization of Local Resource Improve urban life and natural environment by discovering a source of income in the process of solving environmental issues from the local or urban area Individual Independence Environment Improvement Livelihood Assistance Intermediate Assistance Support

20. Classification of Community Business Local Restoration Utilization of Local Resource Enhance the quality of the local life of resident’s welfare, and provide residential welfare such as health care, medical care and child care through community business which was once provided by the public sector Individual Independence Environment Improvement Livelihood Assistance Intermediate Assistance Support

21. Classification of Community Business Local Restoration Utilization of Local Resource Supporting the start-up or managing community business provides management and start-up support for pre-incubating entrepreneurs Individual Independence Environment Improvement Livelihood Assistance Intermediate Assistance Support

22. Publicity ① Urban Public CB ② Rural PublicCB Welfare Environment (Aged, Disabled Support) Health & Medical Job seeking support Lifelong Learning Nursing support • Job seeking support • Lifelong Learning Urban Rural Region Development Commercial Market Vitalization Tour & Network Traditional artcraft Public Facility Operation Craft Art Biz Food manufacturing & Distribution • Public Facility Operation ④ Reginal resource using CB ③LocalIndustry Improvement CB Profitability Classification of Community Business

23. Effect of Community Business

24. Procedures to develop the community by CB • Searching and Training Core People of the Community • Figuring out the Local Problems • Sharing the problems and develop the strategy • Building Capacity of Local People • Connecting Local problems and Biz Items • Selecting the first pilot item through item analysis • Familiar and Experienced Items • Small capital needed Items • Short investment cycle Items • Disseminated effect and prospectus • Feasibility analysis • Demand and Competitiveness(5 Forces) • Check Financing and Profitability • Starting Business

25. Case Examples of Community Business England– Proper Job • Proper Job led by the local residents to reduce the use of peat that cause ecological deterioration, started a Community Compost Project using composts from food waste. • Afterwards, organized a community business called ‘Proper Job’ meaning ‘Right work for the community’.

26. Case Examples of Community Business England– Proper Job • Utilize compost produce by the local residents to reuse them to grow and to sell vegetables in the local community • Operate an organic restaurant by donations from volunteers and local residents • Effect of employing 10 full-time employee and 30 part-time employee • Effect of Environmental Protection

27. Case Examples of Community Business

28. Case Examples of Community Business Japan– MorutowaCo.Ltd(ｧﾓｰﾙﾄｰわ) • Adachi-Gu in Tokyo is the only region without any meal delivery business • Local store owners established a corporation to solve this local issue and vitalize diminishing stores • The business began with managing a convenience store in a nearby hospital extended to various forms of service provider such as elder meal delivery service and cleaning services for major distribution corporation

29. Case Examples of Community Business Kenya– Honey Care Africa • Established in the year 2000 by entrepreneur Farouk Jima and two other investors as honey distributer and manufacturer • Purchase high quality honey from the local small farmers, manufacture and sell it in the East African domestic market and specialty food market in Europe • Reach business goal of economic, environmental and social performance • The growth of HCA economically profited approximately 7,800 small Kenyan farmers and made a living for them

30. Case Examples of Community Business Kenya– Honey Care Africa

31. Case Examples of Community Business Rwanda–Sustainable Health Enterprise(SHE) • Established to provide sanitary and health education about menstruation and low price sanitary pads for women in developing countries • Establish and operate a community business to create sanitary pads from local resources and not rely on expensive developed countries’ sanitary pads • $28, $280, $28 every 28 days, $2,800

32. Case Examples of Community Business Rwanda–Sustainable Health Enterprise(SHE)

33. Case Examples of Community Business Rwanda–Sustainable Health Enterprise(SHE)

34. Case Examples of Community Business Thailand–Maehae Community Enterprise Maesil

35. Case Examples of Community Business Nepal– Nahum Community Enterprise (Hurb)

36. Case Examples of Community Business Uganda– Dry Mango Project

37. Case Examples of Community Business Chard– Sugarcane Charcoal Project

38. Case Examples of Community Business Nepal - Local School Food Project

39. Direction of Mongolian Development Strategy Mongolia and Pastoral Establish a ‘Utilization of Local Resource’ Community Business utilizing local pastoral skills

40. Direction of Mongolian Development Strategy Community Business Development based on 6th Industry

41. Conclusion and Proposal for Development Direction for Mongolia Community Business and Development Plan

42. Hub-City Direction of Mongolian Development Strategy • Urban • Area Hierarchical Hub System • Small Villliage

43. Thank you