Venezuela’s Currencies Promote Cooperation Not Competition

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.

By David South, Development Challenges, South-South Solutions

Published: January 2009

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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Rainforest Rubbers Save Lives

Two development goals are being achieved with one innovative business in Brazil. By using natural rubber tapped from trees in the Amazon rainforest to make condoms, Brazil is able to afford the cost of distributing condoms to tackle its HIV/AIDS crisis. Brazil currently imports more than 120 million condoms every year from China, Republic of Korea and Thailand, making it the world’s biggest single buyer of condoms. The government gives them away for free as part of a national campaign to combat HIV. More than 620,000 people in Brazil are living with HIV out of a population of more than 186 million (UNAIDS, 2005).

The Natex company, co-owned by the public health ministry and the north-western state government of Acre, has established a factory to turn rubber from the world’s biggest rainforest into condoms. The business has created 500 jobs at the factory and 150 jobs for the local indigenous population – the Xapuri – who are traditional rubber tappers.

The factory hopes to produce 100 million condoms a year from local rubber – just 20 million shy of all the condoms the country currently has to import – and could even reach 270 million at full capacity.

“This product will allow people to make love with security and to better plan their futures,” said Raimundo Barros, vice president of the local agricultural association.

The 15,000 Xapuri people who live on the Chico Mendes reserve – named after a conservationist and rubber tapper murdered by ranchers in 1988 – tap seringai trees, which produce rubber that is said to be a more effective barrier to the transmission of sexually transmitted diseases (STDs), than synthetic rubber condoms.

The factory’s 500 employees will earn a total of Reais $2.2 million (US $1.3 million) while the tappers will see their income increase by 250 per cent as demand goes up for the rubber, according to Natex.

“Because of this I’ve managed to buy a few cows and give my family a better life,” rubber tapper Hugo Paz de Souza, 43, told local newspaper Pagina 20. Paz de Souza said the factory will double his income to US $394 a month.

The fact the trees will be saved because of their value as sources of rubber is a great boon to the world’s environment. The trees in the Amazon rainforest – the “world’s lungs” as some call it – face the threat of being chopped down to make way for Brazil’s booming agricultural economy. Official figures released in January 2008 showed that between August and December 2007, about 2,700 square miles were chopped down illegally in the Amazon rainforest. It was the first increase in deforestation after three years of declines and coincided with a rise in global food prices.

Marina Silva, Brazil’s environment minister, told the Guardian newspaper the Natex condom would help create “a new pattern of production and a new process of inclusion that would value the forest being left standing”.

By David South, Development Challenges, South-South Solutions

Published: May 2008

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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South-South Cooperation for Cities in Asia

By David South

southasiadisasters.net July 2014

The coming wave of technological innovations aimed at global South cities will dominate civic debates whether people wish it to or not. Already, futuristic, 21st-century cities are being built around Asia from scratch. I had the privilege of visiting a couple of them in 2012 while researching the fourth issue of our magazine, Southern Innovator (http://www.scribd.com/SouthernInnovator). Each city had a different focus for its construction - one was seeking to be an "eco-city" and the other one called itself a "smart city," focused on becoming a regional business and technology hub. Both aimed to use the latest information technologies to make the way Asian cities operate on a day-to-day basis smarter - and greener.
 
Large information technology companies - including India's Infosys (infosys.com) - have their sights set on selling all sorts of technological solutions to common problems of urban living. This aspiring revolution is built on two foundations: One is the Internet of Things - in which everyday objects are connected to the Internet via microchips. The other is Big Data, the vast quantities of data being generated by all the mobile phones and other electronic devices people use these days.
 
Much of this new technology will be manufactured in Asia, and not just that - it will also be developed and designed in Asia, often to meet the challenges of urban Asia.
 
By their nature, cities are fluid places. People come and go for work and pleasure, and successful cities are magnets for people of all backgrounds seeking new opportunities. This fluidity puts stress on cities and leads to the constant complaints familiar to any urban dweller - inadequate transport, traffic jams, air pollution, poor housing, and a high cost of living.
 
If handled well and with imagination, new information technologies can ensure Asian cities do more than pay lip service to aspirations to improve human development. They can make cities resilient places - able to bounce back from disasters, whether man-made or natural.
 
During the late 1990s, I saw first-hand the pressures placed on one Asian city, Mongolia's capital, Ulaanbaatar. The country endured the worst peacetime economic collapse since World War II while confronting the wrenching social and economic stresses of switching from a command economy during Communism to a free-market democracy. The city's population grew quickly as rural economies collapsed and poverty shot upwards. I can only imagine now how the response could have been different with the technologies available today.
 
In 2010, I interviewed one of the editors of the Cities for All book, Charlotte Mathivet (http://globalurbanist.com/2010/08/24/cities-for-all-shows-how-the-worlds-poor-are-building-ties-across-the-global-south), and she stressed the importance of South-South cooperation to ensuring cities are good places to live for everyone.
          
"A lot of social initiatives based on the right to the city are coming from these 'new cities of the South,'" Mathivet said. "The book highlights original social initiatives: protests and organizing of the urban poor, such as the pavement dwellers' movements in Mumbai where people with nothing, living on the pavements of a very big city, organise themselves to struggle for their collective rights, just as the park dwellers did in Osaka."
 
Recently, an Indian restaurant uploaded to the Internet a video of what it claimed to be the first drone delivering a pizza in an Indian city. While this may or may not be a practical solution to traffic congestion, the subsequent negative fallout - angry police and public officials - from this use of new technology highlights the promise and perils of innovating in the real world of Asian cities (http://www.bbc.co.uk/news/blogs-news-from-elsewhere-27537120).
 
Micro electronics are becoming cheaper and more powerful by the month. Small businesses armed with a only laptop computer, access to the Internet and/or mobile phone networks, and cloud computing services, can offer very powerful business and public services solutions. And sharing solutions across the global South via information technologies has never been easier.

The U.S. Pentagon published various reports and studies in the 2000s forecasting a dark future for cities in the global South. As author Mike Davis revealed in his seminal work, Planet of Slums (http://www.amazon.com/exec/obidos/ASIN/1844670228/nationbooks08), the Pentagon saw the developing world's cities as the "battlespace of the twenty-first century." It imagined sprawling, crime-ridden cities full of poverty and slums and needing tiny drones and robots darting back and forth, keeping an eye on everything and suppressing unrest. This threat-based view of future cities is one to be avoided. It is possible, through the right application of quick solutions to the challenges that arise as cities grow, to turn to cooperation across the cities of the global South to avoid this pessimistic fate.
 
- David South, Editor, Southern Innovator
United Nations Office for South-South Cooperation (UNOSSC)

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Innovation from the Global South

A major study has documented a rising tide of scientific innovation coming from Asia’s fast-developing countries, especially India and China. Conducted over 18 months by UK-based think tank Demos, it challenges the conventional wisdom that scientific ideas come from the top universities and research laboratories of large companies based in Europe or the US. It found ideas emerging in unexpected places, flowing around the world conveyed by a mobile diaspora of knowledge workers from the South.

China has seen its spending on research and development jump by 20 percent each year since 1999. India is now producing 260,000 engineers a year and its number of engineering colleges is due to double to 1,000 by 2010. Research and development in India has grown by threefold over the past decade. There is now a global flow of research and development money to the new knowledge centres of Shanghai, Beijing, Hyderabad and Bangalore.

The study found the greater political and economic emphasis being placed on science and technology was paying dividends. These emerging science powers are now investing heavily in research to become world leaders in information technology, biotechnology and nanotechnology within the next ten to fifteen years. This is also producing a flood of scientific papers from China and India to the world’s prestigious scientific journals.

For India, its knowledge-based industries by the end of this year will be a US $57 billion export industry, accounting for 4 million jobs and 7 percent of Indian GDP. Interestingly, the study also found a new wave of change is underway. Where once it was mostly low-wage manufacturing and call centre jobs that were going to China and India, a new wave of research and development jobs is now moving there. Drawn in by technology clusters in Shanghai and Bangalore, “Microsoft began to realize we can’t find all the talented people in the US. Nowhere in this universe has a higher concentration of IQ power (than India),” said Harry Shun, head of Microsoft’s research in Asia.

By David South, Development Challenges, South-South Solutions

Published: April 2007

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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