THE ECONOMY OF PRESERVATION World Heritage as economic ...
THE ECONOMY OF PRESERVATION World Heritage as economic value Denis Leontiev Project consultant: Sergey Sitar
The Heritage market Coincidence or not but the economic crisis of the early 70s came roughly at the same time as launch of a global heritage market initiated by the signing of the UNESCO World Heritage Convention (Convention) in 1972. This paper looks at the correlation between the development of the free market and developments in the field of historic building preservation. Outlines potential scenario of UNESCO funding restructure and its effects on the World Heritage market. Economy The early 70’s signaled the end of a long period of continuous growth in the Western world by the failing of the Breton-woods financial system in 1971, oil crisis of 1973 and the banking crisis of 1974. It was a time of rethinking of economic paradigm which has prevailed since World War II. Just before in the late 60s, concurrent initiatives of the UNESCO and the White house laid the foundations for a World Heritage Convention. In 1972, during the recession UNESCO Convention was adopted. The idea of the protection of the world heritage had been discussed in various forms during the1960’s. In 1965 the UNESCO supported the establishment of International Council on Monuments and Sites (ICOMOS), and with its assistance starts the preparation of a draft convention on the protection of cultural heritage. In the same time the United States actively promotes the idea of establishing the World Heritage Trust which would protect natural and historic areas around the globe. Though the ideological foundations of this new world heritage organization had been developed during the economic conditions of Post World War II economic expansion, its implementation started in new economic reality - the period of Washington consensus. This term “Washington consensus” was coined by John Williamson in 1989 to summarize reforms which developing countries should follow: “The three big ideas here are macroeconomic discipline, a market economy, and openness to the world”.1 Later the term has been wider interpreted and argued.2 I use this term to label an new period of economy globalization which absorbed developing countries in the global economy. The Washington Consensus is started in the 1980’s and finished during the economic crisis of 2008. Among the most growing sectors of the service economy have been: tourism, entertainment technology and information-based services. The introduction of the World Heritage List and subsequent listing of many heritage sites corresponded with the rapid increase of tourism and number of national heritage trusts members. Global mass tourism inevitably transforms World Heritage Sites to economic assets and lies on the basis of a World Heritage monetization. Annually preservation of UNESCO World Heritage generates through its 911 sites at least 60 billion euro of income.3 Although this is only 1% of total global tourist economy,4 the potential economic benefits which UNESCO World Heritage status gives to the site has the tendency to prevail over the cultural aspects of preservation. “To get the World Heritage status is important,” revealed Gao Zhikai, an official at the Yin ruins in Henan province. “In China, once you get the title, you get a large budget for protection”.5 With the estimated growth of tourism this annual income will most likely double by 2020. Gradual transition of heritage into the domain of the market economy lead to the fact that economic benefit has inevitably become a central motivation for preservation of cultural monuments: as a result, preservation today can be compared to an industry. This tendency raises the question of the initial goals of World Heritage Convention, such as “ ... provides that it will maintain, increase, and diffuse knowledge, by assuring the conservation and protection of the world’s heritage“.6
Williamson, John, Did the Washington Consensus Fail?. Speech at the Center for Strategic & International Studies, Washington, 6.11.2002. Williamson, John, A Short History of the Washington Consensus. Conference “From the Washington Consensus towards a new Global Gov ernance Barcelona: 24–25.09.2004. 3 It can be calculated as 420 mln international visitors * 140 euro (daily tourist expenses) = 58,1 bln euro. Even we will add local tourism: 200 mln local tourists * 30 euro (daily tourist expenses) = 6 bln euro. In total it will be 64 bln euros. 4 Tourism 2020 Vision Study, UNWTO, 2002. 5 China spends billions on restoration as it touts for tourists. The Telegraph, 29 Jan 2011. 6 Convention Concerning the Protection of the World Cultural and Natural Heritage. UNESCO: Paris, 1972. 1 2
Washington consensus 1979-2008
1
Unesco World d heritage convention 1972
World heritage ge Trust 1972
Juxtaposition of economic & heritage periods
Financial & oil crisis 1971-1979
2008
1970
1945
WW II
Post WW II economic boom 1945-1970
Current economic crisis
Dow Jones index 2
880 mln 8 Number of N international in tourist to 700 7 00 mln
3,5 mln3 3 N Number of N National Trust o of UK m members 4
911 9 N Number of World Heritage W properties p
500 mln 2,19 2 ,19 mln
5
690 1
2 3
Williamson, John «Review of Globalisation and its discontents» conference by Peterson Institute for International Economic, 1989
300 mln
UWTO Statistic, 2009 National Trust Timeline (1895-2007)
200 mln
http://www.nationaltrust.org.uk/main/w-trust/w-thecharity/w-thecharity_our-past/w-history_trust-timeline.htm
4 5
UNESCO Statistic, 2010
335
NT for Historic Preservation USA Annual Report . 2009 Kennicott, Philip National Trust’s chief retiring, Washington Post, 4 November, 2009
0 ,26 mln 0,26
84
29 mln $
275 mln $ 2 National Trust N of America o ttotal assets
free ticket max
min
€
Visitors Amazon J-Store International books Mentioned
Distance to airport km
Visitors National
Distance to McD km
Admission fee euro
World Heritage Site Name
quantity of criterias
states
date of inscription
World Heritage Sites parametre Direct Flights from 10 most tourist active countries > 8 direct flights from countries till the site
> 5 mln visitors
> 1000 books
> 10000 articles
strelka denis leontiev World Heritage as economic value 2011
Institutions Today World Heritage is the main concern of national governments, non-governmental national and global trusts and of course UNESCO World Heritage Center. The convention was adopted at UNESCO General Conference during its 17th session in Paris on 16 November 1972. Although its international nature of the convention indicates that the nation State itself remains primarily responsible for the preservation of the World heritage property. “Each State Party to this Convention recognizes that the duty of ensuring the identification, protection, conservation, presentation and transmission to future generations of the cultural and natural heritage referred to in Articles 1 and 2 and situated on its territory, belongs primarily to that State.” UNESCO World Heritage Convention To fund its efforts the Convention decided to found the World Heritage Fund (WHF). The Fund is financed by State parties and voluntary contributions. Each state pays into the Fund maximum 1 % of total of its annual contributions to UNESCO.1 In 2010 the annual budget of the World Heritage Fund was about 7 $ million.2 A comparison of the annual income of WHF with other mayor organizations in the field of preservation shows a huge gap between their financial possibilities. (fig. 1) This financial gap is the result of strategic choice made by UNESCO in 1972. Six months before adoption of the Convention, the United States proposed to organize an alternative World Heritage Trust. The concept was presented at the United Nations Conference on Human Environment in Stockholm in June 1972. The proposal for preservation of unique natural and cultural sites was widely supported by countries. For the first time the idea of the World Heritage Trust was announced on the White House conference in 1965. Later it was used by the American President Nixon in his speech to Congress in February 1971. “It would be fitting by 1972 for the nations of the world to agree to the principle that there are certain areas of such unique worldwide value that they should be treated as part of the heritage of all mankind and accorded special recognition as a part of a World Heritage Trust.” Richard Nixon3 From the beginning UNESCO authorities were skeptical to this proposal: “I did not pay much attention to the proposal itself because of the word “Trust” not translatable in French, conveying to me a sort of private philanthropic foundation & not at all an intergovernmental mechanism based on an international conventions” Michel Batisse Director of Natural Resources Research Division UNESCO4 The concept of the Trust approved at the Stockholm conference now questioned the possibility of initiation of UNESCO World Heritage Convention. However, René Maheu, UNESCO General Director, insisted that the UNESCO proposal had to be chosen and realized.5
World Wild Life fund 489 mln euro
National Trust UK 440 mln euro
National Trust USA 40 mln euro
UNESCO WHF 7 mln euro
Figure 1 World preservation organizations annual revenue (Source: Annual reports 2009) Convention Concerning the Protection of the World Cultural and Natural Heritage. UNESCO: Paris, 1972. Article 16. World Heritage – Challenges for the Millenium. Paris: UNESCO World Heritage Centre, 2007. p.22. 3 Train, Russel. Polution, Politics, & Pandas. Enviromental memoir. Washington: Shearwater, 2003. p. 142. 4 Abdulqawi, Yusuf. Standard-setting in UNESCO. Leiden/Boston: Martinus Nijhoff Publishers, 2007 p.269 note 9. 5 Burek, Cynthia, Prosser, Colin. The History of Geoconservation. Bodmin: MPG, 2008 p.280. 1 2
The Trust ideologist was the American nature preservationist Russel E. Train. He was the chairman of Council on Environmental Quality and the adviser of the American President Richard Nixon on environmental issues. Russel E. Train believed that such a global organization should be realized as a non-governmental organization based within the context of United Nations, but outside the context of UNESCO. “From the beginning, I have seen the purpose of the World Heritage as being something more than simply helping to assure protection and quality management for unique natural and cultural sites around the world –as critically important as that goal is. Above and beyond that goal, I see the programme as an opportunity to convey the idea of a common heritage among nations and peoples everywhere! I see it as a compelling idea that can help unite people rather than divide them. I see it as an idea that can help build a sense of community among people throughout the world. I see it as an idea whose time has truly come.” Russel E. Train1 However, the concept of a non-governmental global preservation organization didn’t disappear. Russell E. Train was involved in initiation and development of most financially successful global preservation fund – the World Wild Life Fund (WWF). Today the WWF has the budget 70 times bigger than UNESCO World Fund and 5 mln global members.This gives us an idea of how the World Heritage Trust could have looked like today. The long-established heritage organizations, like National Trust UK and the USA, realized the monetization of built heritage on the national level. Today trusts are very wealthy and highly influential non-governmental organizations. The National Trust UK is the largest non-governmental heritage organization in the world. From the end of the 19th century, when it was founded, the Trust progressed through three main development stages: 1.Establishment of organization aims; 2.Acquisition of main heritage assets in the first part of 20th century; 3.Monetization of heritage assets in the second part of 20th century; ‘With 630,000 acres, most of them in rural areas, it’s the second largest landowner in the country.” 2 These heritage assets as well as 60 million annual visitors and 3,6 million members generate income of 440 mln euro (2009) per year.3 In the end of the 19th century Robert Hunter, one of the Trust founders, formulated the social aim of the organization as: “The central idea is that of a Land Company, formed not for the promotion of thrift or the spread of political principles, and not primarily for profit, but with a view to the protection of the public interest in open spaces in the country.”4 In comparison, in 21 century The National Trust’s policy on heritage acquisition states: “The property should be, and should be expected to remain, financially self-supporting.”5 Returning back to the UNESCO World Heritage Center (WHC) I can say that the progress of non-governmental organizations like The National Trust of the UK and US, WWF or Global Heritage Fund (GHF) allow them to advise UNESCO on the new strategy. “The biggest problem is UNESCO’s failure to tap philanthropists and corporations. If you’re Coca-Cola, you don’t want to sink money into the UNESCO bureaucracy” Jeff Morgan. Executive Director, GHF Fund6 In 70’s UNESCO developed a strategy which did not imply the monetization of the world heritage. But current UNESCO initiatives give us understanding of the direction in which UNESCO will develop further: “Therefore the main possibility for providing support and increasing the system’s capacity to assist sites lies in the growth of other public and private contributions, and in the development of new forms of fund-raising and financing. Examples include: • involvement of the tourism industry in informing the public and in supporting, directly and indirectly, conservation activities; • increasing role of the Convention in the area of social and ethical investments of banks, insurances and corporations; • launching of public fund-raising and membership programmes;; • creation of regional or national funds – such as the recently established African World Heritage Fund.” Francesco BANDARIN, Director, UNESCO World Heritage Centre7
Train, Russel. World Heritage Convention 30th Anniversary speach, Venice, Italy, 16 November 2002. Who really owns Britain?. Counrtylife magazine Online: 16 November 2010. 19 June 2011
The Heritage market Coincidence or not but the economic crisis of the early 70s came roughly at the same time as launch of a global heritage market initiated by the signing of the UNESCO World Heritage Convention (Convention) in 1972. This paper looks at the correlation between the development of the free market and developments in the field of historic building preservation. Outlines potential scenario of UNESCO funding restructure and its effects on the World Heritage market. Economy The early 70’s signaled the end of a long period of continuous growth in the Western world by the failing of the Breton-woods financial system in 1971, oil crisis of 1973 and the banking crisis of 1974. It was a time of rethinking of economic paradigm which has prevailed since World War II. Just before in the late 60s, concurrent initiatives of the UNESCO and the White house laid the foundations for a World Heritage Convention. In 1972, during the recession UNESCO Convention was adopted. The idea of the protection of the world heritage had been discussed in various forms during the1960’s. In 1965 the UNESCO supported the establishment of International Council on Monuments and Sites (ICOMOS), and with its assistance starts the preparation of a draft convention on the protection of cultural heritage. In the same time the United States actively promotes the idea of establishing the World Heritage Trust which would protect natural and historic areas around the globe. Though the ideological foundations of this new world heritage organization had been developed during the economic conditions of Post World War II economic expansion, its implementation started in new economic reality - the period of Washington consensus. This term “Washington consensus” was coined by John Williamson in 1989 to summarize reforms which developing countries should follow: “The three big ideas here are macroeconomic discipline, a market economy, and openness to the world”.1 Later the term has been wider interpreted and argued.2 I use this term to label an new period of economy globalization which absorbed developing countries in the global economy. The Washington Consensus is started in the 1980’s and finished during the economic crisis of 2008. Among the most growing sectors of the service economy have been: tourism, entertainment technology and information-based services. The introduction of the World Heritage List and subsequent listing of many heritage sites corresponded with the rapid increase of tourism and number of national heritage trusts members. Global mass tourism inevitably transforms World Heritage Sites to economic assets and lies on the basis of a World Heritage monetization. Annually preservation of UNESCO World Heritage generates through its 911 sites at least 60 billion euro of income.3 Although this is only 1% of total global tourist economy,4 the potential economic benefits which UNESCO World Heritage status gives to the site has the tendency to prevail over the cultural aspects of preservation. “To get the World Heritage status is important,” revealed Gao Zhikai, an official at the Yin ruins in Henan province. “In China, once you get the title, you get a large budget for protection”.5 With the estimated growth of tourism this annual income will most likely double by 2020. Gradual transition of heritage into the domain of the market economy lead to the fact that economic benefit has inevitably become a central motivation for preservation of cultural monuments: as a result, preservation today can be compared to an industry. This tendency raises the question of the initial goals of World Heritage Convention, such as “ ... provides that it will maintain, increase, and diffuse knowledge, by assuring the conservation and protection of the world’s heritage“.6
Williamson, John, Did the Washington Consensus Fail?. Speech at the Center for Strategic & International Studies, Washington, 6.11.2002. Williamson, John, A Short History of the Washington Consensus. Conference “From the Washington Consensus towards a new Global Gov ernance Barcelona: 24–25.09.2004. 3 It can be calculated as 420 mln international visitors * 140 euro (daily tourist expenses) = 58,1 bln euro. Even we will add local tourism: 200 mln local tourists * 30 euro (daily tourist expenses) = 6 bln euro. In total it will be 64 bln euros. 4 Tourism 2020 Vision Study, UNWTO, 2002. 5 China spends billions on restoration as it touts for tourists. The Telegraph, 29 Jan 2011. 6 Convention Concerning the Protection of the World Cultural and Natural Heritage. UNESCO: Paris, 1972. 1 2
Washington consensus 1979-2008
1
Unesco World d heritage convention 1972
World heritage ge Trust 1972
Juxtaposition of economic & heritage periods
Financial & oil crisis 1971-1979
2008
1970
1945
WW II
Post WW II economic boom 1945-1970
Current economic crisis
Dow Jones index 2
880 mln 8 Number of N international in tourist to 700 7 00 mln
3,5 mln3 3 N Number of N National Trust o of UK m members 4
911 9 N Number of World Heritage W properties p
500 mln 2,19 2 ,19 mln
5
690 1
2 3
Williamson, John «Review of Globalisation and its discontents» conference by Peterson Institute for International Economic, 1989
300 mln
UWTO Statistic, 2009 National Trust Timeline (1895-2007)
200 mln
http://www.nationaltrust.org.uk/main/w-trust/w-thecharity/w-thecharity_our-past/w-history_trust-timeline.htm
4 5
UNESCO Statistic, 2010
335
NT for Historic Preservation USA Annual Report . 2009 Kennicott, Philip National Trust’s chief retiring, Washington Post, 4 November, 2009
0 ,26 mln 0,26
84
29 mln $
275 mln $ 2 National Trust N of America o ttotal assets
free ticket max
min
€
Visitors Amazon J-Store International books Mentioned
Distance to airport km
Visitors National
Distance to McD km
Admission fee euro
World Heritage Site Name
quantity of criterias
states
date of inscription
World Heritage Sites parametre Direct Flights from 10 most tourist active countries > 8 direct flights from countries till the site
> 5 mln visitors
> 1000 books
> 10000 articles
strelka denis leontiev World Heritage as economic value 2011
Institutions Today World Heritage is the main concern of national governments, non-governmental national and global trusts and of course UNESCO World Heritage Center. The convention was adopted at UNESCO General Conference during its 17th session in Paris on 16 November 1972. Although its international nature of the convention indicates that the nation State itself remains primarily responsible for the preservation of the World heritage property. “Each State Party to this Convention recognizes that the duty of ensuring the identification, protection, conservation, presentation and transmission to future generations of the cultural and natural heritage referred to in Articles 1 and 2 and situated on its territory, belongs primarily to that State.” UNESCO World Heritage Convention To fund its efforts the Convention decided to found the World Heritage Fund (WHF). The Fund is financed by State parties and voluntary contributions. Each state pays into the Fund maximum 1 % of total of its annual contributions to UNESCO.1 In 2010 the annual budget of the World Heritage Fund was about 7 $ million.2 A comparison of the annual income of WHF with other mayor organizations in the field of preservation shows a huge gap between their financial possibilities. (fig. 1) This financial gap is the result of strategic choice made by UNESCO in 1972. Six months before adoption of the Convention, the United States proposed to organize an alternative World Heritage Trust. The concept was presented at the United Nations Conference on Human Environment in Stockholm in June 1972. The proposal for preservation of unique natural and cultural sites was widely supported by countries. For the first time the idea of the World Heritage Trust was announced on the White House conference in 1965. Later it was used by the American President Nixon in his speech to Congress in February 1971. “It would be fitting by 1972 for the nations of the world to agree to the principle that there are certain areas of such unique worldwide value that they should be treated as part of the heritage of all mankind and accorded special recognition as a part of a World Heritage Trust.” Richard Nixon3 From the beginning UNESCO authorities were skeptical to this proposal: “I did not pay much attention to the proposal itself because of the word “Trust” not translatable in French, conveying to me a sort of private philanthropic foundation & not at all an intergovernmental mechanism based on an international conventions” Michel Batisse Director of Natural Resources Research Division UNESCO4 The concept of the Trust approved at the Stockholm conference now questioned the possibility of initiation of UNESCO World Heritage Convention. However, René Maheu, UNESCO General Director, insisted that the UNESCO proposal had to be chosen and realized.5
World Wild Life fund 489 mln euro
National Trust UK 440 mln euro
National Trust USA 40 mln euro
UNESCO WHF 7 mln euro
Figure 1 World preservation organizations annual revenue (Source: Annual reports 2009) Convention Concerning the Protection of the World Cultural and Natural Heritage. UNESCO: Paris, 1972. Article 16. World Heritage – Challenges for the Millenium. Paris: UNESCO World Heritage Centre, 2007. p.22. 3 Train, Russel. Polution, Politics, & Pandas. Enviromental memoir. Washington: Shearwater, 2003. p. 142. 4 Abdulqawi, Yusuf. Standard-setting in UNESCO. Leiden/Boston: Martinus Nijhoff Publishers, 2007 p.269 note 9. 5 Burek, Cynthia, Prosser, Colin. The History of Geoconservation. Bodmin: MPG, 2008 p.280. 1 2
The Trust ideologist was the American nature preservationist Russel E. Train. He was the chairman of Council on Environmental Quality and the adviser of the American President Richard Nixon on environmental issues. Russel E. Train believed that such a global organization should be realized as a non-governmental organization based within the context of United Nations, but outside the context of UNESCO. “From the beginning, I have seen the purpose of the World Heritage as being something more than simply helping to assure protection and quality management for unique natural and cultural sites around the world –as critically important as that goal is. Above and beyond that goal, I see the programme as an opportunity to convey the idea of a common heritage among nations and peoples everywhere! I see it as a compelling idea that can help unite people rather than divide them. I see it as an idea that can help build a sense of community among people throughout the world. I see it as an idea whose time has truly come.” Russel E. Train1 However, the concept of a non-governmental global preservation organization didn’t disappear. Russell E. Train was involved in initiation and development of most financially successful global preservation fund – the World Wild Life Fund (WWF). Today the WWF has the budget 70 times bigger than UNESCO World Fund and 5 mln global members.This gives us an idea of how the World Heritage Trust could have looked like today. The long-established heritage organizations, like National Trust UK and the USA, realized the monetization of built heritage on the national level. Today trusts are very wealthy and highly influential non-governmental organizations. The National Trust UK is the largest non-governmental heritage organization in the world. From the end of the 19th century, when it was founded, the Trust progressed through three main development stages: 1.Establishment of organization aims; 2.Acquisition of main heritage assets in the first part of 20th century; 3.Monetization of heritage assets in the second part of 20th century; ‘With 630,000 acres, most of them in rural areas, it’s the second largest landowner in the country.” 2 These heritage assets as well as 60 million annual visitors and 3,6 million members generate income of 440 mln euro (2009) per year.3 In the end of the 19th century Robert Hunter, one of the Trust founders, formulated the social aim of the organization as: “The central idea is that of a Land Company, formed not for the promotion of thrift or the spread of political principles, and not primarily for profit, but with a view to the protection of the public interest in open spaces in the country.”4 In comparison, in 21 century The National Trust’s policy on heritage acquisition states: “The property should be, and should be expected to remain, financially self-supporting.”5 Returning back to the UNESCO World Heritage Center (WHC) I can say that the progress of non-governmental organizations like The National Trust of the UK and US, WWF or Global Heritage Fund (GHF) allow them to advise UNESCO on the new strategy. “The biggest problem is UNESCO’s failure to tap philanthropists and corporations. If you’re Coca-Cola, you don’t want to sink money into the UNESCO bureaucracy” Jeff Morgan. Executive Director, GHF Fund6 In 70’s UNESCO developed a strategy which did not imply the monetization of the world heritage. But current UNESCO initiatives give us understanding of the direction in which UNESCO will develop further: “Therefore the main possibility for providing support and increasing the system’s capacity to assist sites lies in the growth of other public and private contributions, and in the development of new forms of fund-raising and financing. Examples include: • involvement of the tourism industry in informing the public and in supporting, directly and indirectly, conservation activities; • increasing role of the Convention in the area of social and ethical investments of banks, insurances and corporations; • launching of public fund-raising and membership programmes;; • creation of regional or national funds – such as the recently established African World Heritage Fund.” Francesco BANDARIN, Director, UNESCO World Heritage Centre7
Train, Russel. World Heritage Convention 30th Anniversary speach, Venice, Italy, 16 November 2002. Who really owns Britain?. Counrtylife magazine Online: 16 November 2010. 19 June 2011
