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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.

Creative Commons License

This work is licensed under a
Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

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

© David South Consulting 2022

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Agricultural Waste Generating Electricity

By David SouthDevelopment Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

Agriculture around the world produces a great deal of waste as a by-product. It can be animal faeces, or the discarded plant husks thrown away when rice, grains or maize are harvested. When this waste meets the urgent need for electricity, something special can happen.

The number of people still without electricity in the South is vast. The failure of major electricity generating power stations to reach so many people has spurred entrepreneurs to come to the rescue. Power is critical to so many things: small businesses need it, anyone wanting access to computers and the Internet needs it, and modern appliances like refrigerators run on it. During the past 25 years, electricity supplies have been extended to 1.3 billion people living in developing countries. Yet despite these advances, roughly 1.6 billion people, a quarter of the global population, still have no access to electricity and some 2.4 billion people rely on traditional biomass fuels, including wood, agricultural residues and dung, for cooking and heating. More than 99 percent of people without electricity live in developing regions, and four out of five live in rural areas of South Asia and sub-Saharan Africa (International Energy Agency, IEA).

Power outages in Africa are a serious and frequent problem and a significant force holding back development. With global oil prices on the rise, turning to diesel generators is an expensive option.

According to the IEA, the lack of electricity leaves poor countries “trapped in a vicious circle of poverty, social instability and underdevelopment.”

In India, 80,000 of the country’s half a million villages lack electricity. Two students, Charles Ransler and Manoj Sinha, have started a business providing electricity to some of these villages by turning rice husks – a by-product of rice milling – into gas that then powers an electricity generator.

Already, two of their rice-burning generators are providing electricity to 10,000 rural Indians. The hope is to rapidly expand the business to hundreds of small village power plants.

The business, Husk Power Systems, was started while the two were at the University of Virginia’s Darden School of Business.

While the generator burns the rice husks to make a gas to produce electricity, it also leaves behind a waste product of ash that is sold as an ingredient in cement.

This technology can provide off-grid power to rural Indian villages of 200 to 500 households. Using the husk-powered mini power plant, the team plans to offset close to 200 tons of carbon emissions per village, per year in India.

The idea for the rice husk generators was originally conceived by Sinha and Gyanesh Pandey, the third partner in Husk Power, who left an engineering career in Los Angeles to return to India and oversee the rice husk project. Sinha and Pandey went to college together in India and both come from rural Indian villages that struggle with a lack of electricity.

“We grew up in those areas,” said Sinha. “Our relatives still do not have electricity. We wanted to give back to those areas.” Originally they envisioned refining the generator concept and raising enough money to donate rice-husk generators for two or three villages near where they grew up, said Sinha.

But instead, after some research, they realised it could be a financially viable business expandable to hundreds of villages. There are 480 million Indians with no power and 350 million of them live in rural villages, concentrated in eastern India’s “Rice Belt,” where the villagers are “rice rich and power poor,” said Ransler.

The project has already won a fistful of prizes, including US$50,000 from the Social Innovation Competition at the University of Texas.

They think that each rice husk generator is to break even in about two and a half years.

And they like to think this is the Starbucks of off-grid electricity generation, potentially as successful as the globe-spanning US coffee shop chain. “You can put one of these in 125,000 locations, hire local people, and turn a raw material into money – just substitute rice husks for coffee beans,” said Ransler.

Another maker of biomass mini power plants in India is Decentralised Energy Systems India (DESI power). It is a New Delhi-based non-profit company specialising in building a decentralised power network for rural India. It was formed by Development Alternatives, India’s largest sustainable development NGO. It is able to provide a megawatt of electricity to a village for the cost of 44 million rupees, rather than 57 million rupees from the central grid.

Published: June 2008

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.

Creative Commons License

This work is licensed under a
Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

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

© David South Consulting 2022

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Bolivia Grabs World Media Attention with Salt Hotel

By David SouthDevelopment Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

Tourism is a great way to attract foreign currency to a country and build local economies, especially in remote or isolated places. But the catch is finding a way to get people to go the distance and come and visit and spend their money.

In a global South twist on the well-known Ice Hotel in Sweden(www.icehotel.com) – a hotel entirely built out of ice – enterprising Bolivians have built a hotel out of salt.

A Bolivian hotel in the middle of the world’s largest salt flats has found a clever way to attract tourists to this remote holiday destination: build the hotel entirely out of salt, right down to its furniture.

The South American nation is one of the poorest inLatin America, and its income distribution is among the region’s most unequal. Bringing in foreign currency and attracting more tourists can help to reduce this poverty. According to the World Travel and Tourism Council, travel and tourism will contribute 2 percent to the country’s gross domestic product (GDP) in 2011. Around 75,000 jobs are directly dependent on the tourism business in the country and this is projected to rise to 96,000 jobs by 2021.

And it is a good business to be involved in: “Travel and tourism is one of the world’s great industries, providing 9 percent of global GDP and 260 million jobs; it drives economic growth, business relationships and social mobility,” according to David Scowsill, President and CEO of the World Travel and Tourism Council.

The Hotel de Sal Cristal (http://www.hosteldesal.com/?L=2), near Colchani, hosts guests who come to visit the salt flats of Salar de Uyuni (http://en.wikipedia.org/wiki/Salar_de_Uyuni). They are believed to store 50 to 70 percent of the world’s lithium supplies and an economic boom has started in the area. The striking and blinding white salt flats were featured in the James Bond film “Quantum of Solace.”

The hotel’s unique construction from rock-hard salt hewn from the salt flats is working to encourage tourists to stay longer in the area during their holiday. Before, they would just take a quick excursion on to the salt flats before moving on to their next destination.

The Hotel de Sal Cristal is built using blocks of salt cut from the surrounding flats. The architectural design is inspired by the ancient Chinese balancing philosophy of Feng Shui (http://en.wikipedia.org/wiki/Feng_shui). Following the principles of the philosophy, it faces the sun and balances both masculine and feminine energies. Shaped like three coca leaves, the feminine side, this balances with the more masculine side reflected in the salt flats, the hotel’s website claims.

The hotel has 27 rooms with hot water and heating. – and beds made of salt. In the dining room, people can sit on chairs made of salt and eat at salt tables. The rooms are wall-to-wall salt, bright and white.

The hotel’s pool is surrounded by sand-like salt.

The hotel’s ‘Resto-Bar’ offers views of the salt flats and promises it will “allow the cosmic energy…” to flow freely.

The menu offers llama meat and risotto of quinoa (http://en.wikipedia.org/wiki/Quinoa) alongside traditional Bolivian dishes, salads and soups and Bolivian-themed treats.

The hotel has an ‘astronomic observatory’ for star gazing, making the most of the low level of light pollution on the flats.

One of the hotel’s tour guides, Pedro Pablo Michel Rocha from Hidalgo Tours (http://www.salardeuyuni.net/), told the Daily Mail newspaper: “I love it when visitors come to this place for the first time.

“They can’t get over the fact that everything is made out of salt and I’ve even seen a few people lick the furniture to make sure!

“It is a wonderful experience to come somewhere like this where they’ve used the natural materials available to create something like a hotel.”

The salt flats, formed from prehistoric lakes, have a salt crust hard-baked by the sun with a pool of salty water underneath which is rich in the rare element lithium. Lithium (http://en.wikipedia.org/wiki/Lithium) is sought-after for its use in things like re-chargeable batteries for mobile phones, computers and electric cars.

The area’s economy has boomed since 3.4 million tons of lithium – believed to be half the world’s supply – was discovered underneath the salt flats.

The power of tourism to alleviate poverty has been documented by Caroline Ashley, co-author of Tourism and Poverty Reduction: Pathways to Prosperity (http://www.earthscan.co.uk/?TabId=92842&v=497073), after extensive research on tourism’s impact on poverty in countries across Africa andAsia.

She argues that “tourism can fight poverty.”

“Note, we say ‘can’, not that it always does. The share of spending by tourists within a destination that reaches poor people can vary from less than 10 percent to a high of 30 percent,” Ashley told BusinessFightsPoverty (http://www.businessfightspoverty.org).

“When it works, international tourism is actually a very good way of channelling resources from rich to poor. In destinations as diverse as hiking on Mount Kilimanjaro in Tanzania, business tourism in Vietnam and cultural tourism in Ethiopia, between one quarter and one third of all in-country tourist spending accrues to poor households in and around the destination.”    

Ashley said a successful tourism strategy needs to focus on “the 4Ps: pay, procurement, persuasion and partnership.”

“Pay a living wage to local employees; take a hard look at procurement and potential to source locally … persuade – or at least inform – your clients how to take up opportunities to spend in the local economy…” and build a partnership with government to integrate tourism into the local economy.

And it looks like the hotel can’t get more connected to the local economy than being made of the very salt that surrounds it.

Published: November 2011

Resources

1) The Global Summit: World Travel and Tourism Council: Taking place in Tokyo/Sendai from 16-19 April 2012. Website: http://www.wttc.org

2) A website packed with resources for planning a trip to Bolivia. Website: http://www.boliviacontact.com/turismo/

3) The Intercontinental Hotels Group has an interactive website showing the many ways hotels can become sustainable. Website: http://innovation.ihgplc.com/

4) Hotel designs: A website for interior designers, architects and hoteliers. Website: http://www.hoteldesigns.net/home.php

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. 

Creative Commons License

This work is licensed under a
Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

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

© David South Consulting 2022

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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. 

Creative Commons License

This work is licensed under a
Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

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

© David South Consulting 2022