Director,
T.E.(Terry)
Manning,
Schoener 50,
1771 ED
Wieringerwerf,
The
Tel:
0031-227-604128
Homepage:
http://www.flowman.nl
E-mail: (nameatendofline)@xs4all.nl :
bakensverzet
Incorporating innovative
social, financial, economic, local administrative and productive structures,
numerous renewable energy applications, with an important role for women in
poverty alleviation in rural and poor urban environments.
"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, London 1958, page 228
Edition 11:
Purchases
in formal money of capital goods for production purposes will normally need to
be imported into the country where the project area is situated.
The
first series of such purchases is usually made with the original loan funds.
Since the original loan funds are made available in Euro or other leading
international currency, and converted into the local currency for the purposes
of the project, their re-conversion where necessary from the local currency into
the international currency should not pose a problem.
The
amount of capital goods needed for local productivity increase under recycled
micro-loans could, however, amount to several times (5 or 6 times or more) the
amount of the original interest-free loan expressed in foreign currency.
A
condition for the granting of an interest-free loan under the Model is,
normally, that the beneficiary be able initially to sell some of the goods or
services in question outside the project area for formal money to enable him to
repay the loan. The beneficiary therefore exports the goods or services outside
the project area for formal local currency, but not necessarily outside the
national borders. Since capital goods may often need to be imported into the
country where the project area is situated, a situation of financial leakage of
formal national currency occurs for the purpose of buying the foreign currency
necessary for the purchase of new capital goods for production purposes. This
financial leakage is not desirable but it may in part be offset by the increase
of local production tending towards a reduction in the need for imported goods.
The leakage can only be completely avoided where the project area succeeds with
time to export directly outside national boundaries enough of its production to
earn enough foreign currency to cover the costs of the imported goods. It is
unlikely this be possible at least in the early phases of a project application.
The local government must therefore when it approves a project application under
the Model accept that this (temporary) financial leakage is going to take place
during the initial stages of the project. Its Finance Ministry must ensure
flexibility in granting leave to convert local formal money into the foreign
currency necessary for the purchase of the capital goods. Failure of the
Ministry to do so would in practice lead to serious delays in project execution.
The more often the project funds are recycled the more rapidly the project area
will develop. The Project Coordinator, on the other hand, is bound to endeavour
to reduce the financial leakage of formal currency in question by purchasing
capital equipment, where available, which has already been imported and is
available on the local market.
The
following schedule will produce a zero national import/export balance for the
project during its execution and a long-term ongoing credit balance:
First
two (executive) years : zero franchise
Third year, at least 35% of imported
value exported
Fourth year, at least 50% of imported value exported
Fifth year, at least 75% of imported value exported
Sixth year, at least
100% of imported value exported
Seventh year, at least 125% of imported
value exported
Eight and following years, at least 150% of imported value
exported
Back: circulation
of information..
List of drawings and
graphs.
Typical list of maps.
List of key
words.
List of
abbreviations used.
Documents for
funding applications.