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Venezuela’s Currencies Promote Cooperation Not Competition

By David SouthDevelopment Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

The global economic crisis has spread around the world and is bringing many problems in its wake.  As global currency markets gyrate wildly, and people find they can go from having wealth to being poor almost overnight, the question is being asked: “is there another way?”

The global economy is slowing rapidly. Even Iceland – a country recently named as having the best quality of life in the world (Human Development Index) (HDI) – has gone broke, and many other nations around the world will face serious economic crises. People will need to protect themselves from the worst effects of the fallout from various economic bubbles bursting.

Runaway inflation, as is occurring in Zimbabwe – reaching 231 million percent in October, 2008 according to official sources – shows faith in a country’s currency can be sorely tested. But do people and the poor in particular, need to be prisoners of the economy managed by a national currency?

The ‘prosumer’ movement (http://en.wikipedia.org/wiki/Prosumer), where consumers take an active role in re-shaping markets and economies to their benefit, around the world is looking for ways to bypass national currencies and make food, goods and services more affordable and stable, improving the lives of the poor. One way this is done is through alternative currencies (http://en.wikipedia.org/wiki/Alternative_currency).

Cimarrones, or the Cimarron, joins 10 other alternative currencies currently in operation across Venezuela. They are circular cardboard tokens with a picture of a runaway slave on them.

Supported by Hugo Chavez, the country’s president, the new currencies are aimed at tackling poverty and establishing new economies. The currencies can’t be exchanged for the Venezuelan currency, the bolivar.

It works like this: to be a prosumer, you must first bring something to sell before you can buy anything. The range of products for sale at prosumer markets is not vast, but that isn’t the point.

“It’s magic,” Pablo Mayayo, an Argentinian advising Venezuela on prosumer schemes, told The Economist. “ When you take away money, which is the cause of almost all the great evils in the world, people relate to each other in a different way, by cooperating, not competing.”

Argentina pioneered so-called “barter markets” in response to its economic crises, helping people avoid starvation, looting and perhaps a revolution. By the end of 2002, there were 4,500 barter markets being used by half a million people producing 600 million credits.

“They were organized geographically around church halls, car parks and baseball courts,” recalled Peter North, a Liverpool University geographer. “They offered a wide range of products and services, supplied by professionals, trades people and farmers, as well as housewives and the unemployed. Stalls attracted ‘prosumers’ in their thousands, who paid with credit coupons issued by one or more barter markets. Everyone involved was both a prosumer and a producer, since you couldn’t purchase credits or exchange them for pesos.”

In Rio Chico, a small town in the Venezuelan coastal region of Barlovento, the prosumer currency market has people happy with the prices.

“I grow coconuts,” said Angenia Hernandez. “In the shops they cost 3.5 bolivares each (US $1.63) at the official exchange rate), but we we’re going to sell them at [the equivalent of] 1.5.” She calls it an end to “commercial fascism.”

Because of global currency speculation and investment flows, national currencies are not entirely at the control of national governments. High inflation seriously hurts the poor and low-waged, and national currencies can hurt the rural poor, who become prisoners to high interest rates charged by urban lenders.

Turning to a local, alternative currency has many advantages: it stops currency speculation, stops the flow of wealth to urban areas, preserves purchasing power, keeps trading local. Avoiding the draining away of wealth to middlemen, it addresses currency scarcity, and fosters greater awareness of how economies function and the mechanisms of trade

Criticism of these schemes say it is just a re-run of regressive company currencies and feudal tokens that were used in the past to control people and force them to only buy products from the landowner or boss.

In Papua New Guinea , shells are used for money and are called Tabu.  It is an ancient currency system used by the Tolai people of East New Britain Island . Stephen Demeulenaere (www.network-economies.com), who has worked on alternative currencies around the world and helped with the re-introduction of the Tabu in Papua New Guinea , sees it playing a key role in the local economy.

“Tabu was very effective at addressing poverty,” he said, “because anything could be purchased with it, from a handful of peanuts up to a piece of land or even a car, without needing national currency.  Tabu is produced traditionally by women, so theoretically nobody would suffer from a lack of it.  The advantage over the national currency is that it has a very long history of use, and people trust it more than the national currency.

“Tabu builds wealth by facilitating the exchange of locally-produced goods and services which may not circulate in a ‘national-currency only’ economy, and values activities that may not be considered to be economically viable if the use of national currency was the only option.  In the west we see this where ‘mother’s work’, hobbies, mutual-aid and other traditional under-valued but economically important activities are not valued monetarily.

“By encouraging the exchange of locally-produced goods and services, wealth is built in the community from the ground up.”

Over 75,000 people now use the shells, usually traded in great rings.

Getting the introduction of an alternative currency right is critical. In Argentina, such currencies were criticised for being manipulated by criminal gangs and political forces.

“The main advice I have is to study the community closely, and our website at http://www.complementarycurrency.org, provides free resources for people wishing to start their system,” Demeulenaere said.

“The system must be transparent so that people trust it and participate in maintaining its health and stability; democratic, so that it can not be abused by those in power; appropriate, so that it achieves general social and economic goals and aspirations of the community; and to be complementary to the regular economy so that the system helps its members to improve their lives economically.”

At the Jai Marketplace in Thailand , all of the goods in the market can be bought entirely in the local currency called “Jai’. Jai is convertible to Thai Baht or to organic, locally made cow fertilizer, and is designed to improve the local economy and the climate for micro, small and medium enterprises through the local exchange network.

Published: January 2009

Resources

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP’s South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South’s innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.

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Southern Innovator Magazine | 2010 – 2014 

By David South

Southern Innovator in Tianjin, China.
Issue 5 of Southern Innovator at the Global South-South Development Expo (GSSD Expo) 2014 held in Washington, D.C.
Volunteers in Nairobi, Kenya pose with Southern Innovator Issue 4 at the Global South-South Development Expo (GSSD Expo) in 2013.
Southern Innovator Editor and Writer David South in Australia.
Southern Innovator Graphic Designer and Illustrator Sólveig Rolfsdóttir in Iceland.

Some comments that have come in so far about SI’s first issue:

“What a tremendous magazine your team has produced! It’s a terrific tour de force of what is interesting, cutting edge and relevant in the global mobile/ICT space… Really looking forward to what you produce in issues #2 and #3. This is great, engaging, relevant and topical stuff.”, to “Looks great. Congratulations. It’s Brill’s Content for the 21st century!”

What they are saying about SI on Twitter: From @CapacityPlus Nice job RT @ActevisCGroup: RT @UNDP: Great looking informative @SouthSouth1 mag on South-South Innovation; @UNDP Great looking informative @SouthSouth1 mag on South-South Innovation; @JeannineLemaireGraphically beautiful & informative @UNDP Southern Innovator mag on South-South Innov. 

And on Pinterest:

Peggy Lee • 1 year ago 

“Beautiful, inspiring magazine from UNDP on South-South innovation. Heart is pumping adrenaline and admiration just reading it”

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP’s South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South’s innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator. 

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Poorest Countries Being Harmed by Euro Currency Crisis

By David South, Development Challenges, South-South Solutions

New UNOSSC banner Dev Cha 2013

SOUTH-SOUTH CASE STUDY 

The ongoing economic crisis in Europe is forecast to harm the economies of the world’s poorest countries if it continues, according to a study by the United Kingdom’s Overseas Development Institute (ODI) (odi.org.uk).

As an example, Kenya’s shilling currency has weakened and increased the cost of imports, leading to a surge in inflation, while the number of European tourists has declined, according to Business Daily.

Raging since 2009 (http://www.bbc.co.uk/news/business-13856580), the eurozone crisis has seen several European countries struggling to pay debts built up during the boom years, and this has threatened the currency compact among countries that use the euro single currency (http://www.ecb.europa.eu/euro/html/index.en.html). Several countries have introduced harsh austerity measures to try and rein in the debts and stabilize economies while keeping countries within the eurozone.

This has had the consequence of dramatically raising unemployment levels, reducing consumption of goods and services and increasing poverty rates in many European countries. Some governments have responded by reducing the amount of legal labour migration allowed into their countries.

The study estimates that the euro crisis could amount to a loss of US $238 billion for poorer countries from 2012 to 2013 as aid, trade, investment and remittance payments sent home to relatives and friends are damaged by the crisis.

This would particularly harm export-dependent, emerging-market countries. The study found demand was weakening for products from low and low-to-middle income countries. This would in turn harm growth in these countries. Growth in the past decade has helped many countries lift millions of people out of poverty and enabled the growth of new middle classes, who in turn use their rising incomes to purchase consumer goods and invest.

The crisis will cause developing countries’ currencies to drop in value if they are pegged to the euro, and for countries to be economically harmed because of austerity policies in European countries, said the study’s author, Dr. Isabella Massa.

“The EU remains the largest single export market for poorer countries, although it is the emerging BRIC economies which are their main source of imports.”

The European Union (EU) (http://europa.eu/index_en.htm) is the biggest market in the world and the largest importer of goods from developing countries. The ODI report found a 1 per cent drop in global export demand has the knock-on affect of reducing growth in poor countries by 0.5 per cent. The countries most at risk from the crisis are Mozambique, Kenya, Niger, Cameroon, Cape Verde and Paraguay.

For example, 17 per cent of Ivory Coast’s exports go to the EU. Mozambique sends 14 per cent of its exports to the EU and Nigeria sends 10 per cent.

Tajikistan in Central Asia was the most highly dependent economy on remittance payments from its workers living outside the country to prop up its GDP (gross domestic product). Remittance payments from Tajik citizens outside the country made up 40 per cent of GDP.

Liberia and the Democratic Republic of Congo were both heavily dependent on foreign direct investment (FDI) from Europe in 2010.

Many countries have also grown used to strong demand for their resources in recent years as China has rapidly developed and urbanized, sucking in more and more resources from around the world, including sub-Saharan Africa.

“Poor countries are vulnerable to the euro crisis not only because of their exposure (due to dependence on trade flows, remittances, private capital flows and aid) but also because of their weaker resilience compared to 2007, before the onset of the global financial crisis,” said Massa.

“The ability of developing countries to respond to the shock waves emanating from the euro area crisis is likely to be constrained if international finance dries up and global conditions deteriorate sharply.

“The escalation of the euro crisis and the fact that growth rates in emerging BRIC economies, which have been the engine of the global recovery after the 2008-9 financial crisis, are now slowing down make the current situation really worrying for developing countries.”

Despite the gloom, there are many positive and powerful antidotes to this economic crisis, including rising South-South trade and innovation, which shows it is possible to reduce dependency on wealthy-developed countries alone for economic prosperity.

Published: September 2013

Resources

1) UNRISD: United Nations Research Institute for Social Development: The United Nations Research Institute for Social Development (UNRISD) is an autonomous research institute within the UN system that undertakes multidisciplinary research and policy analysis on the social dimensions of contemporary development issues. Website: unrisd.org/

2) The Global Urbanist: News and analysis of cities around the world: planning, governance, economy, communities, environment, international. Website: globalurbanist.com

3) OECD: The global economic crisis is entering a new phase amid signs of a return to positive growth in many countries. But unemployment is likely to remain high and much still needs to be done to underpin a durable recovery. This website will track the recovery. Website: http://www.oecd.org/general/tacklingthecrisisastrategicresponse.htm

4) African Union: This vision of a new,  forward looking, dynamic and integrated Africa will be fully realized through relentless struggle on several fronts and as a long-term endeavor. The African Union has shifted focus from supporting liberation movements in the erstwhile African territories under colonialism and apartheid, as envisaged by the OAU since 1963 and the Constitutive Act, to an organization spear-heading Africa’s development and integration. Website: http://www.au.int/en/

5) Youth-Inclusive Financial Services (YFS-Link) Program website: The first space for financial services providers (FSPs) and youth-service organizations (YSOs) to gather, learn and share about youth-inclusive financial services. Website: http://www.makingcents.com/ourWork/yfsLink.php

6) Triple Crisis Blog: Global Perspectives on Finance, Development and Environment: Website: http://triplecrisis.com/

7) African Economic Outlook: A unique online tool that puts rigorous economic data, information and research on Africa at your fingertips. A few clicks gives access to comprehensive analyses of African economies, placed in their social and political contexts. This is the only place where African countries are examined through a common analytical framework, allowing you to compare economic prospects at the regional, sub-regional and country levels. Website: africaneconomicoutlook.org/en

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New Swimwear for Plus-size Women in Brazil

By David South, Development Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

Brazil is well known for its stylish swimwear, with styles usually targeted at young women and those with more conventional, media-friendly body shapes. But now a company is making visiting the beach more comfortable and empowering for plus-size women.

Prior to the arrival of plus-size swimwear, women turned to over-sized tshirts and baggy shorts to hit the beach. Now, Brazilian companies are pioneering fashionable and sexy swimwear for women of all sizes.

Brazil has a well-known beach culture – a culture celebrated over the years in popular pop tunes like ‘The Girl From Ipanema’ (http://en.wikipedia.org/wiki/The_Girl_from_Ipanema). The country has successfully turned its alluring beach culture into lucrative businesses,including fashion enterprises that have become global brands. The global hit brand of beach flip flops Havaianas (havaianas.com) is a good example.

Lehona (lehona.com.br) makes ‘Moda Praia’ – plus-size – swimwear for women. The swimsuits are specially designed to flatter larger body shapes and give women the confidence to go back to the beach. It is seeking to end the discrimination inherent in beach culture that favours the “thin, the rich and the chic.”

Body shapes have been changing in Brazil – as they have been across the world and the global South. While one cause is the global obesity crisis -ballooning as diets change with rising prosperity – there is also another, more positive cause: greater access to nutrition and increasing consumption of milk and meat tends to lead to larger body shapes. This has happened across the world and in many countries irrespective of the racial and ethnic background of the people. Norwegians in Northern Europe were once some of the shortest people in Europe and suffered from poverty and malnutrition. But, as food security increased and nutrition improved, they have over time become the second tallest people in Europe behind the Netherlands (The Changing Body: Health, Nutrition,and Human Development in the Western World since 1700).

For Brazil, malnutrition was widespread until recently. Records show 10 per cent of the country’s rural northeast in the 1970s was considered underweight.

The Brazilian statistics institute has found the past decade’s economic boom has had another consequence as well as lifting many millions out of poverty. It has found 48 per cent of adult women and 50 per cent of adult men are now overweight. This compares with 1985, when 29 per cent of women and 18 per cent of men were overweight.

Diets have changed in the intervening years. Rice, beans and vegetables are now in competition with potato chips, processed meats and sugary soft drinks.

And apart from nutrition and diet changes because of increasing incomes,there is also a cultural change. While the wealthy are more used to lifestyles with plenty of exercise, newly prosperous people do not necessarily have the fitness habit. One study found just 10 per cent of Brazilian teens and adults exercise regularly.

The Lehona brand has become a quick hit and receives many telephone calls and emails from would-be customers, its owners claim.

The Brazilian cultural expectation for women’s beachwear is skimpy, showing more rather than less. This prejudices women who do not have slim body shapes or who are not under 30.

Started in 2010 by clothing designer Clarice Rebelatto and run by her son Luiz Rebelatto, Lehona was started out of personal need.

“Honestly, the problem went way beyond just bikinis. In Brazil, it used to be that if you were even a little chunky, finding any kind of clothes in the right size was a real problem,” said Clarice Rebelatto, a size 10, to The Associated Press.

“And I thought, ‘I’m actually not even that big compared to a lot of women out there, so if I have problems, what are they doing?’”

The approach to the swimsuits is counter to many other brands targeting plus-size women. They are bold and emphasize the shape rather than try to cover it up and hide it.

The brand sells itself through specialty stores for large and tall women in Brazil. A bikini sells for around 130 reais (US $66).

“Some brands, they don’t want their image to be associated with chunky women= Only the thin, the rich and the chic,” Luiz Rebelatto told The Associated Press.

“We’re working from the principle that bigger women are just like everyone else: They don’t want to look like old ladies, wearing these very modest, very covering swimsuits in just black.”

The plus-size market has even been taken up by conventional Brazilian swimwear manufacturer Acqua Rosa (http://www.acquarosanet.com.br/site/). It released its plus-size line in 2008 and claims sales now account for 70 per cent of their total sales.

One woman frequenting Copacabana beach copacabana.info) in Rio de Janeiro is Elisangela Inez Soares. She is happy and confident with the new swim suits.

“It used to be bikinis were only in tiny sizes that only skinny girls could fit into. But not everyone is built like a model,” concludes Soares.

Resources

1) Start a Fashion Business: A website packed with step-by-step advice on starting a fashion business. Website: startafashionbusiness.co.uk/

2) A website compiled by an American fashion expert on how to run a fashion business for profit. Website: http://fashionforprofit.com/about-us/

3) The catalogue for the Lehona swimsuit line. Website: http://www.lehona.com.br/pdf/lehona_moda_praia_plus_size.pdf

4) Miss Brazil Plus-Size Beauty Contest: Website: http://www.youtube.com/watch?v=LHLflIgXqgM

“I think you [David South] and the designer [Solveig Rolfsdottir] do great work and I enjoy Southern Innovator very much!” Ines Tofalo, Programme Specialist, United Nations Office for South-South Cooperation

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ORCID iD: https://orcid.org/0000-0001-5311-1052.

© David South Consulting 2022