NGO
Another Way (Stichting Bakens
Verzet), 1018 AM
01. E-course :
Diploma in Integrated Development (Dip.
Int. Dev.)
Edition
01: 14 November, 2009.
Edition
02 : 22 September, 2011.
SECTION B :
SOLUTIONS TO THE PROBLEMS.
Value: 06
points out of 18 .
Expected work
load: 186 hours out of 504.
The points
are finally awarded only on passing the consolidated exam for Section B :
Solutions to the Problems.
Fourth
block: The structures to be created.
Value : 03 points out of 18
Expected work load: 96 hours
out of 504
The points
are finally awarded only on passing the consolidated exam for Section B :
Solutions to the Problems.
Fourth block:
The structures to be created.
Section 3: Financial
structures.[24 hours]
20.00 hours :Financial structures.
04.00 hours : Preparation report.
Section 3: Financial
structures.[24 hours]
20.00 hours :Financial structures
: analysis.
1. The basic concepts -
introduction. [ 2.5 hours]
2. The basic concepts – more
details. [ 2.5 hours]
3. The local money systems -
introduction [ 2.5 hours]
4. The local money systems – more
details. [ 2.5 hours]
5. The interest-free
micro-credit systems -
introduction.[2.5 hours]
6. The interest-free
micro-credit systems -
more details.[2.5 hours]
7. The cooperative purchasing groups -
introduction. [2.5 hours]
8. The cooperative purchasing groups
– more details. [2.5 hours]
04.00 hours : Preparation report.
Section 3: Financial structures.[24
hours]
20.00 hours :Financial structures
: analysis.
3. The local money systems -
introduction [ At least 2.5 hours]
This section provides general information on
local money systems in industrialised
countries. The innovative application of local money concepts to integrated
development projects in different from that described in this section. For
example, all adult inhabitants of an integrated development zone automatically
become members of the local money system there as of right. At the same time,
they are always free to use the system of not to use it, except for certain
services provided for the project itself.
All members are issued with a start capital, representing a certain
number of hours’ (probably 50) work, so as to avoid all sensation of
indebtedness.
«Each morning we wake up with 86.400 seconds paid into our personal time
account » Terris François (co-founder of the first local Money system in
1. Opinion.
On one page,
relate this concept to local money systems.
An important
resource for local economic development in general (it is not specific to local money
systems as such) is the manual by Ward B. and Lewis J., Plugging the
Leaks, New Economics Foundation,
2. Opinion.
On one page
apply the example of the perforated bucket to your chosen project area.
Click here to see how a local money transaction works.
Because of the nature and distribution of the
populations in most integrated development project areas only one local money
system is generally foreseen for each
project area. However, the inhabitants
are quite free to opt for two or more systems should they wish to do so. All
adults within a system should be registered as members, but use of the system
with exceptions for goods and services necessary for the project itself, would
be voluntary. Any member may usually freely choose whether to conduct a given
transaction in the local currency system or within the formal currency system.
The LETS group will usually have +/- 35000 registered adult members. Children
under the age of 14 will not be registered as they are not, under the
international convention on the rights of children, allowed to work. They will
become registered members of their local LETS systems upon reaching the age of
(14). The members of (the, each) group will be coded so that their and
tank-commission and well areas can be identified and the cost of more local,
optional, initiatives such as PV lighting for study purposes debited to the
members directly involved rather than to the whole project area.
Integrated development projects provide for a rapid increase in the
educational facilities made available to all of the children in a project area.
The populations will decide on the age for the entry of children into the local
money system. In principle, participation in the local money systems is not in conflict with secondary and tertiary
education, provided the rights of children are respected..
A "catalogue" of goods and services
is may, where considered useful, be prepared periodically in a form which can
be understood/read by the group members. In the various project areas what is
available and who provides it will often be widely known at local level.
All the local LETS currencies within the region
of which the project area is part will have the same reference value. This will
be decided with the local population for this project, as it is serves as pilot
project for the region.
The reference value will normally be based on
the perceived value of an hour’s
work. Since the local LETS currencies in
the region will have the same reference value, they can be transferable from
one to another. However, not all goods and services will be transferable
between the different systems, as this could lead to a drain of resources from
one system to another. LETS systems work best when the financial resources remain
balanced within each system. The LETS coordinators and the members will decide
which goods and services are "exportable". Gypsum composite products
made in group A, for instance, could be exportable to group "B".
Cloth made in group "B" may be exportable to group A. Crops and
vegetables not grown in one group could be importable from the others.
Assume that a gypsum composite product is sold
by a group A member to a group B member. The transaction would be in local
currency A. The gypsum composite product manufacturer would be credited in
local currency A. The coordinator of group A would advise his counterpart in
group B of the debit for the group B member and separately credit group A with
the same amount in group B currency. The group B coordinator would debit the
group B buyer in local currency B, and, separately, debit group B with the same
amount in group A currency. Goods and services supplied by group B to group A
would be registered the other way round. The group A and B coordinators then simply
eliminate the respective debits and credits by pairing value units one for one.
The following registrations take place:
a)
The group A producer would be credited in local
currency A.
b)
The coordinator of group A would advise his counterpart
in group B of the debit for the group B member.
c)
The coordinator of group A would credit his group A
with the same amount in group B currency.
d)
The group B coordinator would debit the group B buyer
in local currency B.
The group B coordinator would debit his group B
with the same amount in group A currency.
e)
Goods and services supplied by group B to group A
would be registered the other way round, following the procedures described in
steps a) to e).
f)
The group A and B coordinators then simply eliminate
the respective debits and credits by pairing value units one for one.
g)
In case of a (large) remaining credit balance of one
of the two groups at the cost of the
other, the coordinators will take whatever steps necessary to bring the balance
of the accounts as close as possible back to zero as quickly as possible. There
are many ways of doing this. Allowing extra goods and services to be exported
from the debtor system to the creditor system is one way. Organising markets or
fairs with debtor area products in the credit area is another. Organising
tourist outings of creditor area residents in the debtor area is another.
It is a key to the success of the system that
the imports and exports of each group remain balanced, their sum tending to
zero.
There will be an elected local LETS coordinator
in each tank commission area. The LETS coordinator will need to be literate and
will be responsible to the general LETS systems coordinator. The local coordinators
will help those members unable to write/sign their cheques (or deal with other
methods of payment), arrange distribution of chequebooks (or other payment
forms)to the LETS users, collect the used cheques (or equivalent) deposited in
the LETS POST box near the local water tank and take them to the general LETS
systems coordinator for registration. The local coordinators will also display
the monthly or weekly reports on the LETS NOTICE BOARD near or above the LETS
POST box, advise illiterate members of their LETS balances, call a fortnightly
or monthly meeting where the users can discuss the operation of their LETS
system, make special requests (such as, for example, increasing the debt limit
for sick members or for those making special purchases), and discuss ways to
use the goods and services of those with high debts so as to help balance their
trading accounts. The local coordinators will also discuss with the members
selected proposals for allowing export and import of goods and services into
the local LETS system and report back to the general LETS coordinator.
Modern systems for the registration of transactions
are being developed. One of them is a slate
for micro-finance
described in an article by P. Pain in the Hindu,
The first general LETS systems coordinator will
be chosen by the Project Administrator. He and the locally elected LETS
coordinators will make up the LETS COMMISSION. The LETS COMMISSION will meet at
least once a month to discuss particular problems and to decide on actions
needed to balance the export/import accounts amongst the various local LETS
currencies.
The fortnightly/monthly reports for members in
each tank commission area will be published on the local LETS NOTICE board and
discussed at a general meeting of the local members. The report will show, for
each member, the previous balance, the current balance, the total number of
plus transactions and minus transactions conducted, and list each plus and
minus transaction since the previous report.
Payments for LETS services provided by members to their communities will
be debited to a special LETS code for the community. When the community debt
reaches one LETS currency unit (or other agreed amount) for each member, each
member will be debited with that amount. The community LETS code will then be
credited by the same total amount. This system allows collective communal
property to be involved in the LETS transactions. For example, the sale of wood
from communal land can be registered as a credit to the LETS group involved,
and then transferred from there to individual group members.
The processes broadly follow traditional
balance of payments transactions but the objective is to maintain a balance in
imports and exports. A large debit balance between one LETS group and another
would show resources are being transferred from one group to another. The
coordinators would then have to take steps to correct the imbalance. They
could, for example, temporarily extend the range of goods and services the
debtor group can export to the creditor group, such as by arranging a special
market.
In
areas with a high illiteracy rate, one of
the main problems to be solved is the
form of the local transactions. In
Where cheques (or other transaction forms) are
used, they will have three parts. Each part will have the member's name and
LETS number pre-printed on it. The SELLER'S cheque is used in each transaction.
The BUYERS name and system code are filled in on the cheque, with the
assistance of the local coordinator where necessary, as well as a description
(with LETS code) of the goods or services sold. Finally the cheque is signed by
BOTH parties and deposited in the LETS post box. The amount credited to the
seller must be exactly the same as that debited to the buyer.
3. Opinion.
Give a one-page indication on the acceptance of a local money system in
your chosen project area, and the type of system which would be the most
appropriate.
Poor
people in your project area cannot participate in transactions for the transfer
of goods and services because they don’t have «the means » to do it.
Through the introduction a a local money system, you
will provide them with this possibility. It is your job to encourage them to
make use of the system.
4. Opinion.
Write a one-page, down-to-earth speech
to convince the people in your project area of the opportunities opened through
the introduction of a local money system
there.
For
a rapid introduction of your local money
system, you need the support of locally-known persons to create precedents and
to act as « «role
models » .
5.
Research.
Make a list on one page of at least 10
people in your project area that you would choose as «role models ». Next
to each one, say why.
◄ Fourth block : Section 3: Financial structures.
◄ Fourth block : The structures to be created.
◄ Main index for the Diploma in Integrated Development
(Dip. Int. Dev.)
"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,
“Poverty is created scarcity”
Wahu Kaara,
point 8 of the Global Call to Action Against Poverty, 58th annual
NGO Conference, United Nations,
This work is
licensed under a Creative Commons
Attribution-Non-commercial-Share Alike 3.0 Licence.