Delhi Sustainable Development Summit 2002
Ensuring sustainable livelihoods:
challenges for governments, corporates, and civil society at Rio+10
8 - 11 February 2002, New Delhi

Managing natural resources for society: welfare and health implications
Prof. Y K Alagh
Former Union Minister and Member of Parliament, India

Sustainability and welfare: issues

For this session, the following may be seen as some underlying trends.

1. Withdrawal of the State from a dominating role in direct provision of economic services
2. The State not only providing the regulatory framework for the functioning of the economic and social sectors, but also laying down the institutional rules, the incentive and disincentive mechanisms and fiscal rules for civil society institutions to function, like the decentralized local institutions of government, Cooperatives, NGOs and newer forms of similar organizations
3. India and some other large countries entering into a phase in which nonrenewable resource scarcities will be far more severe. This is particularly true of resources, like water, good land, and energy and sustainability concerns will be acute
4. A much greater emphasis on the rights of individuals and groups and greater demands on transparency
5. More pressing needs of protecting the vulnerable groups, either the historically underprivileged, or the victims of marketisation needing safety nets
6. Modern technology providing cutting edge knowledge based solutions to emerging scarcities or problems, and therefore greater use of information technology, biotechnology, networking, the new materials and strategic management responses
7. Security concerns becoming more acute, both of an institutional nature as also the more basic issues of energy security, food and water security
8. Greater possibilities and need for regional and global cooperation.

A business-as-usual scenario is useful as a counterfactual to illustrate the nature of the problems. For India, an expert exercise with many leading institutions involved shows the following.

On the flip side there are many success stories where community effort functioning in the context of reform scenarios has been used to provide employment or social protection in a sustainable manner. Watershed development, for settled agriculture alternately tree crops, reclamation of saline lands, farmers run lower level irrigation systems, aquifer management in difficult situations, like coastal aquifers, tribal irrigation cooperatives, tank irrigation have all been reported as success stories and studied. Similar examples exist in the education, health, self help areas. Unfortunately national and global systems are not tuned in terms of incentive and disincentive systems and organizational designs to support such efforts. The question is replicability on a larger scale. We try to set out some rules, if applied in functioning policies may reverse the tide.

1. The success stories are community and leadership based, with leadership coming from diverse sources: a progressive farmer, an NGO, a local army retired person, a ‘concerned’ civil servant, a scientist working in the field. The leaders either had a science background or new enough to adapt from a nearby science institution. The organisation structure was neither purely private ownership, nor fully community or social control. The leadership invariably argued for aggressively functioning markets and land ownership was private and agricultural operations at the household level. However there was for land or water management, limited and well defined cooperation. This could be drainage, soil shaping, contour management, improvement and management of lower level canals, desilting of tanks, raising embankments, fish culture, market development, controlled grazing and so on. They estimated the land and water development costs, The labour component, ‘outside finance’, the output in terms of food requirements met, energy requirements met and fodder supplies. There were estimates of ‘economic rates of return on the investment’, i.e. at accounting border prices, with a shadow wage rate 25% higher than the market rate. Financial rates of return at market prices were also estimated. These studies showed high economic rates of return, 18% plus, making them very productive investments.

2. There have to be well-identified shelves of a large number of small projects on land, water and other infrastructure projects available for financing. It was a mistake to weaken the agroclimatic project in India, given the region’s diversified resource base:

3. Financial institutions have to design structures such that community collateral is possible for viable projects. Self-help financing groups are only one such group. Land and water development groups, local infrastructure projects, in road or communication sectors, productionizing products developed in R&D institutions, training for production with improved techniques, market development schemes developed by local and community groups would be other examples ;
   

4. Lending through a weather or project cycle would be necessary. NABARD ( the National Agricultural Bank in India ) had started a scheme of this kind in 1991 as a part of an agro-economic regionalization strategy started by the author, gave it up in 1993 and is again starting it now ( See Kapur Committee ,Reserve Bank of India, 2000 for details ) ;

5. Developing policy "champions" for sorting out administrative, financial and procedural issues at local, regional and national levels, when problems arise with these kind of development strategies. It is reasonably certain that problems are going to arise in development experiments, which are off the beaten track. The question then is, is there somebody in the policy decision making structure who will sort out the problem. ADB reports in a detailed study of farmer managed irrigation systems, that the failure cases were those where such support did not exist. Failure here is defined as performance levels lower than by government agencies.

Many of the institutions, which have succeeded, are of a mixed kind. They integrate the vigour of decentralized markets, with limited forms of focussed community action. Cooperatives, non-profit organizations and partnerships between private sector, Coops, NGOs or local governments are not foreseen at all. A Committee that I chaired in India presented a draft law for cooperatives to set up producer companies with corporate alliances. ( See Alagh, 2000 ) It saved the cooperative principle by providing the one share one vote basis, but as V.Kurien and the Independent Cooperative Initiative declared in the Anand Declaration in December 2000, some vested interests are opposing this reform. Recently the concerned legislation has been tabled in Parliament and Shri Pranab Mukherjee heads the Standing Committee on the legislation.

Markets are a very powerful way of supporting atomistic institutions. But community organisations and limited and focused cooperative forms of institutions are critical at the present phase of development. They are not a part of the central policy debates. Alternative possibilities are not only possible, but even global experience suggests that there are better ways of organising society so that it can unleash its own creative energies. ( For example see the documentation at the expert level for the UN Secretary General’s Millenium Conference: See Y.K.Alagh, Keynote Address on Development and Governance, in Van Ginkel and Thakur, UNU Millennium Series, 2001, pp.73-82. )

These questions need the exploration of three critical areas . First, how can communities and individuals in fragile regions and at risk, turn around? In other words, how can sustainable development strategies be operationalised. The institutional question here is the socio-economic rules and incentives and disincentives, so that organizations and structures are in position to foster replicability of success stories. Second what are the policy and macro implications of supporting these strategies. Here the knowledge base is thinner, but the timing is appropriate. The nineties was the period of ‘globalisation’. After the East Asian crisis, the Washington Consensus is being superimposed with this ( is giving up to? ), in many countries, [ See Jomo, K.S., 2000 for the growth and distribution impacts of the East Asian crisis], although the new strand of reasoning has little impact on a general plane. Development strategies are by definition mobilisational in the sense of resource raising, but do we have the wisdom to develop systems which will genuinely help those who help themselves, or will resources, technology and organization support always and only, be a part of commerce, the urge of dominance and double speak. Here, even the blueprints are vague. At least the rules of structural adjustment were clear – abolish controls, reduce government, reduce tariffs and never have special policies for employment or development of backward areas." The rules of helping those who help themselves are not known. The power of modern technology and decentralized markets is known. But how do we use this power for areas where markets and resource backups are weak, is not quite clear. What are some of the areas where development concerns will need structures at the regional, national and global level? Third and finally, can partnerships be talked about if the language of the other is not known. What are the requirements of participation and transparency? How can they be made a part of functioning systems? This is a question of alternate thinking styles which need encouragement.