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HOW TO WRITE AN
INTEGRATED DEVELOPMENT PROJECT FOR THE AREA YOU LIVE OR WORK IN |
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(CLIQUEZ ICI POUR LA VERSION
EN FRANÇAIS)
Edition 09: 26 March,
2009.
MENU FOR DEVELOPMENT AID MINISTRIES
CREATIVE
PRACTICAL SOLUTIONS TO POVERTY REDUCTION
This
website provides simple, down-to-earth practical solutions to poverty- and development-related problems. It sets out
step by step how the solutions are put into effect. By
following the steps, users can draft their own advanced ecological
sustainable integrated development projects and apply for their seed financing.
Social, financial, productive and service structures are set up in a critical
order of sequence and carefully integrated with each other. That way,
cooperative, interest-free, inflation-free local economic environments are
formed in project areas. Local
initiative and true competition are then free to flourish there.
CONVERSION
OF TRADITIONAL PROJECT STRUCTURES INTO FULLY SUSTAINABLE ONES
Many
existing development projects have already failed or risk failure because they
are not fully sustainable over a longer term. This is often because an
appropriate framework of enabling social, financial, and productive structures
under which management and maintenance costs and long-term replacements of
capital goods can be carried out is missing.
The
social, financial, productive and service structures foreseen in the Model can
be built around structures set up under traditional projects to create cooperative, interest-free, inflation-free
local economic environments in the project areas. This way several thousand
employment opportunities can be created in each project area and large amounts
of on-going formal money costs saved. On-going financial leakage from project
areas, typical of traditional
development projects, is blocked. The small amount of formal money reaching the
project areas is, wherever possible, retained and continually recycled there.
POLICY IMPLICATIONS
The structures created during the execution of each project have many
policy implications. These are described in the paper Policy
implications of an innovative model for self-financing ecological sustainable
development for the world's poor.
PROJECT STRUCTURES
A short summary of the project structures is
set out in section 05.06 Summary of the project
structures of the Model. Each
project area forms a local economy system with between 50.000-70.000
inhabitants. Each local economy system is designed to be large enough to offer
wide possibilities of specialisation of productive activities, yet small enough
for each individual to be able to comprehend, associate with, and participate
in all of the project structures. The project areas interact with each other to
form a patchwork quilt of local economy systems which together make up a
powerful national economy.
FINANCIAL
ASPECTS
A
typical project budget for an area with 50.000 inhabitants is €5.000.000, or
€100 for each inhabitant. Of this, 25% is contributed directly by the
people themselves. This is done by way of conversion into Euros of the costs of
goods supplied and work done by the local inhabitants for the execution of the
project under the 05.21 interest-free cooperative local
money structures set up in an early phase of the project. This contribution usually
amounts to 425.000 days of 8 hours’ work. Allowing for a rate of conversion of
Euro 3 for each day of work, the amount contributed by the people is
roughly €1.250.000, or 25% of the total
project costs. This means the amount made available by third parties by way of
gift or by way of interest-free ten year loan is about 75% of the total project
costs being about €3.750.000 in all or €75 for each inhabitant. Exactly how
this money is split up amongst the various project structures is set out in
detail in 07.10 the balance sheet. Some 35-40% is used for
the drinking water structures, to cover the cost of drilling boreholes (where
necessary), pumps, solar panels and other equipment. About 15-20 % is used for
interest-free loans to enable local people to set up production facilities to
make items necessary for the execution of the project structures. There are no
costs involved in the drafting of the project documents and applications for
their seed financing, as these are done under the Model. This means that the
cost of foreign consultants for pilot projects in each country is limited to
10% (about € 350.000) of the formal money part of the project budget. The execution of each project includes the
training of people to lead the execution of similar projects in adjacent areas,
so that the system is sustainably self-propagating.
As is shown in the table 07.40 Income families contribute €0,60 per person or
about €3 per family of five each month into the project’s Cooperative Local
Development Fund. The budgeted net annual income of Euro 290.500
is sufficient to finance and repay an interest free formal currency loan for up
to Euro 3.750.000 over a period of 10 years, taking the various reserves and
loan repayments into account. Should payments out of reserves be higher than
expected, the project administration may choose to increase the monthly
contribution of the families after four or five years, as their standard of
living improves.
Interest-free, cost-free micro-finance provided through the 05.22
interest-free cooperative micro-credit structures in
each project area typically amount to at least €1,500 for each family in each
period of ten years. This is an ultra-conservative evaluation based on an
average two years’ payback period.
Interest-free loans for various project structures transferred to private
persons or cooperatives are paid back into the Cooperative Local Development
Fund over a period of 3-5 years. They are taken into account in the
calculations above. These loans include those for the gypsum composites
manufacturing units, the briquette manufacturing units, public transport
cooperatives (buses), and the maintenance and installation cooperatives
(vehicles). In case of loan repayment after ten years, funds available for
interest-free micro-credits will be temporarily reduced to zero. Since the
families continue to make their monthly payments to the Cooperative Local
Development Fund, the capital in the Fund for micro-credits will gradually
build up again during the second period of ten years as it did during the first
period of ten years. Where the original seed funding is by way of grant, the
large amount of capital in the Fund at the close of the first period of ten
years will continue to circulate to finance interest-free micro-credits. It can
also be used to finance extensions to project structures.
For more details refer to the sections 07.20 Short analysis, 07.30 Systematic out-go, 07.50 Observations, 07.60 Funds available for micro-credits.
PREPARATORY
FORMALITIES
Several formalities need
to be completed before a project can proceed to an executive phase. They pass
from initial partnership declarations to the formation of a working group whose
task it is to set NGOs up for the execution of the project and for on-going management of the project
structures. The management NGO is transferred to the local population as soon
as the planned project social and financial structures are in operation.
Ownership of the structures set up by the project are transferred to the
management NGO as they become operational.
For more details refer to section 05.09 Illustration of the formal steps necessary to get project
execution started.
BUILT-IN
PROTECTION FOR FUNDING PARTIES
Innovative means of protection of the investments
made by funding parties have been incorporated in the Model. Exposure of investors at any one point of
project execution is limited. This is made possible through the layering, or
sequential order of creation, of the
various project structures. Work on next following structures does not take
place until the preceding structures are in place and in operation.
The new capital content
of project structures tends to increase with progress in project execution. The
first (the social and financial) structures to be set up have relatively low
formal money capital content. The second (the productive) structures have an intermediate
level of capital content. The last (the service) structures, and especially the
distributed drinking water structures, have the highest level of capital
content. By the time the service structures are to be installed, most of the
work on them can be done under the local money system, operational costs and
formal money reserves for maintenance and long-term replacement are already being collected, and local
production of items necessary for the
service structures is already under way.
Projects, at least in theory, can qualify for
Carbon Emission Reduction Certificates under the Kyoto Treaty. Within the
framework of self-financing integrated development projects there is a market
for 20.000 – 30.000 high efficiency cookers in at least 10.000 families.
Assuming a fuel saving of 6.5 kg/day of fuel in each family, savings amount to
65 tons of wood per day or 23725 tons per year. Converted into tons of CO2,
that is 18705 tons of CO2 per year. Assuming a market value of Euro 24 per ton of CO2, this amounts to a
credit of nearly €450.000 per project per year to which other cost and time
savings can be added. Over ten years this alone would be enough to finance the
project. As described in 09.33 CER certificates Kyoto Treaty :
programme of activities as a single CDM project activity some timid steps are being taken to
help groups of smaller projects participate in emission rights trading. Carefully managed high application and
compliance costs have so far kept them out.
THE
COSTS OF INTEGRATED DEVELOPMENT
Formal money interest-free or
gift investments of €75 per person would involve a total investment of €337.500.000 for a country, such as
This is roughly four times the
INCREASE (US$48 billion) in the defence budget of the
Since the seed money for
projects under the Model does not even have to be by way of grant, it is clear
that solution of the poverty issue world-wide has never been a financial
problem and is not a financial problem today.
LOGICAL
PROJECT FRAMEWORK
For a general overview of a
typical project application under the Model see : 05.02 logical framework.
WOMEN’S RIGHTS
Section 08.20
women’s rights sets out how women’s full participation in the projects is
guaranteed.
ECOLOGICAL ASPECTS
Section 08.30 ecological aspects sets out how the
project concepts allow for energy-neutral structures, a wide use of alternative
energy technologies, and conservation pf the natural resources in project
areas.
AGRICULTURAL PRODUCTION AND FOOD SECURITY
Section 08.40 agricultural production and food
security sets out how the project covers management of communal lands,
waste recycling structures including recycling of urine, composted faeces, and
other organic solids, food and water security in times of drought and crisis,
plant nurseries, cooperative seed banks, biomass for the production of
mini-briquettes for cooking, and the protection of water sources and water
conservation.
ON-GOING
MANAGEMENT OF PROJECT STRUCTURES
As social,
financial, productive and service structures are created during project
execution they are taken over by the three-tiered 05.07 Local Cooperative for the
on-going management of the project structures. The local cooperative is
100% sustainably operated.
EMPLOYMENT OPPORTUNITIES
Each project
creates permanent sustainable employment for about 4.000 people, which is about
10% of the adult population in the project area.
(Sources quoted)
1.
2.Leonhardt D, What US$ 1.2 Trillion Can Buy, New York
Times, 17 January 2007. Associated Press
report 9 July 2007 from Washington D.C.citing
Congressional Research Service calculations for $610 billion for U.S.
Congress authorised financing of the
3. Dutch Rekenkamer-JSF an expensive investment, Sdu
government information service, 11
October 2006 (costs Euro 14.600.000.000 for 85 planes).
4. Foreign Trade Statistics, FT900 : U.S.International
Trade in Goods and Services, U.S.Census Bureau, Release 8 June 2007.
5. Watkins K. Eight broken promises, Oxfam briefing
paper 9, Oxfam International, Washington, 2001 (US$ 350 billion in 2001).
6. OECD Organisation for Economic Cooperation and
Development, press release “Development Aid from OECD countries fell 5.1% in
7. Easterly, William, The White Man’s Burden – Why the
West’s Efforts to Aid the Rest have Done so much
MORE INFORMATION
: SOME USEFUL GROUPS OF FILES
The complete Model for self-financing
ecological integrated development projects.
Short introductions to projects and instructions on how to get
started.
Short
summaries, including an executive summary, with basic information on
projects. This group of files includes
instructions on how to get a project started.
Illustrations of project structures.
Charts,
drawings and diagrams illustrating the main features of projects.
Attachments to project documents.
A list of documents with information supporting projects. The list
provides extra information on concepts and technologies used in the Model, such
as information on the work of the Brazilian sociologist Clodomir Santos de
Morais, local money systems, micro-credit systems, some recommended appropriate
technologies, and hygiene education courses.
Articles published on specific aspects of
the Model.
The list includes articles on policy aspects, the use of alternative
energy, micro-credits, and drinking water supply.
Some draft
projects prepared in English and French using the principles introduced by the
Model.
Back to:
"Money
is not the key that opens the gates of the market but the bolt that bars
them."
Gesell,
Silvio, The Natural Economic Order, revised English edition, Peter Owen, London
1958, page 228
“Poverty is created scarcity”
Wahu Kaara, point 8 of the Global Call to Action Against Poverty, 58th
annual NGO Conference, United Nations,
"In the end, it's about love for mankind. Freedom begins with love.
Our challenge is to learn to love the world"
Nigerian writer Ben Okri, interview in Ode Magazine, Dec 2002-Jan 2003,
p.49
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