NGO Another Way (Stichting Bakens Verzet), 1018 AM Amsterdam, Netherlands.


                                                                                    01. E-course : Diploma in Integrated Development (Dip. Int.Dev.)


Edition 01: 08 December, 2009



Tekstvak:         Quarter 3.










Study points : 05 points out of 18

Minimum study time : 125 hours out of 504


The study points are awarded upon passing the consolidated exam  for  Section C : The Model.



Block 8 : Economic aspects.


                            [Study points 03 out of 18]

[Minimum study time: 85 hours out of 504]


The study points are awarded upon passing the consolidated exam  for  Section C : The Model.



Block 8 : Economic aspects.


Section 1 : Project costs.[40 hours]


01.  General introduction. (02 hours)

02. General sketch of the financial structures.(02 hours)

03. Short budget analysis. (02 hours)

04. Budget organisation. (02 hours)

05. Description of the local contributions. (02 hours)

06. Method for calculating local contributions. (02 hours)

07. Relationship between local money and formal money.(02 hours)

08. The budget (02  hours)

09. The budget in a form requested by donors/financing parties. (02 hours )

10. Annual expenses (budgets per year). (02 hours )

11. Quarterly budgets. (02 hours )

12. Excel spreadsheets for the preparation of the budget.(02 hours )

13. The sustainability of the system.(02 hours )

14. Tenders. (02 hours )

15. The bank structures with limitations imposed on the project coordinator.(02 hours )

16. Auditing structures. (02 hours)

17. Protection of donors and financing parties.(02 hours )


Section 1 report :  (06 hours) .




Section 1 : Project costs.[40 hours]


07. Relationship between local money and formal money.(At least 02 hours)


For  information on local money systems refer once again to parts 


3. Local money systems - introduction et

4. Local money systems- more detail


in Section 3: the financial structures in  block  4 the structures to be created.


This part deals with the relationship between the budget items expressed in formal money and those expressed in local money.


In principle :


All products and services which can be supplied locally are paid under the local money system set up in one of the early phases of the execution of integrated development projects. Once the local system is operative, all gods and services destined for the project can be supplied under the local money system. In principle, the populations have every interest to do so, as their purchasing power expressed in local accounting units ( 80 units per 8-hour working day) will undoubtedly be much greater than the conversion value of their work ( Euro 3 per  day) used for budget purposes.  


Until the local money system is ready, all operations necessarily have to be paid for in Euros to the charge of the formal money budget amount.


The concept does not apply to external consultants, as they have to survive and support their families under the formal money conditions applying in their countries of origin.


An exception to the rules is made for the local project coordinator (of local coordination group) responsible for the project. The reason for this is  the status of the local project coordinator vis-à-vis the main external consultant. The consultant at item 70301 accepts to work without salary. However, the payment of a per-diem a forfeit according to the allowances listed by the European Commission to cover living costs while abroad is payable. Provision is made for the project coordinator (or the coordination team collectively) to receive the equivalent of the consultant’s per diem payment. This is to ensure that the coordinator (or the team) feel truly responsible for the project and not inferior in rank to the consultant. 


Further, how the money made available to the coordinator (or the team) is distributed is a decision of the local parties responsible for project execution.  The funds can remain to the personal use of the coordinator, of the NGO the coordinator represents, or split up amongst various beneficiaries. For the project as such, this aspect has no importance, on condition that the coordinator is guaranteed of the respect necessary for him to be able to run the execution of the project.


Once the local money system is operative, it functions in parallel with the formal money system. Except for goods and services destined for project structures, the populations are always free to decide whether to carry a transaction out under the local money system or under the formal money one, or using a combination of the two.


The more that can be done under the local money system set up, the less the formal money amount needed for project execution. That is why integrated development projects under the Model cost less in formal money terms for all of the services together than what would be needed under traditional aid projects for just any one of its components. For Euro 75 per person (which can even, where necessary be repaid n a lump sum at the close of the first ten years of project operation) poverty can be eliminated in project areas achieving (and surpassing) nearly all of the Millennium Goals there and guaranteeing  to every inhabitants without exception a good quality of life. An that, contrary to the case with traditional initiatives, in an entirely ecological and sustainable way.


1. Opinion.


Why do you think such a budget concept has never been applied before ? Freely express your opinion on two pages. Use material from the whole of the course. You may wish to bas an analytical introduction on the part on basic concepts : detail of la Section 3: the financial  structures of block 4 the structures to be created.. You may wish to refer to the problems cited during the analyses in Section 1. analysis of the Millennium Goals in the third block  the problem to be resolved. You might wish to continue with an analysis of the  restrictions traditionally linked with local money systems born for the greater part at hobby level in industrialised countries without having the dimensions needed to created a viable market. You could choose to conclude your study with a  revision of the third level : states of section 1 anthropological analysis of the third block solutions to the problems .


2. Opinion.


Do you think the budget as presented is simple ? Give your opinion on one page.


3. Research.


Think about your project area. Are there any formal-money budget items in the typical budget that you think could be produced locally once the local money system has been established ? On one page supply details of them and the consequences this would have for the budget.


4. Opinion.


Do you agree with the budget provisions concerning the local project coordinator (where applicable the coordination team) ? Which alternative solutions, if any, would you like to propose for inclusion in the integrated development project in your area ? Express your opinion on one page.


 Eighth block :  Economic aspects. 

 Eighth block :  Project costs.

Main index  for the Diploma in Integrated  Development  (Dip. Int. Dev.)

 List of key words.

 List of references.

  Course chart.

 Technical aspects.

 Courses available.

Homepage Bakens Verzet


"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, New York 7th September 2005.



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