NGO
Another Way (Stichting Bakens Verzet), 1018 AM
01. E-course :
Diploma in Integrated Development (Dip. Int.Dev.)
Edition
01: 08 December, 2009
Study points
: 05 points out of 18
Minimum study
time : 125 hours out of 504
The study
points are awarded upon passing the consolidated exam for
Section C : The Model.
[Study points 03
out of 18]
[Minimum study time: 85 hours
out of 504]
The study
points are awarded upon passing the consolidated exam for
Section C : The Model.
Section 1 : Project costs.[40
hours]
01. General
introduction. (02 hours)
02. General sketch of the financial structures.(02
hours)
03. Short budget analysis. (02 hours)
04. Budget organisation. (02 hours)
05. Description of the local contributions. (02
hours)
06. Method for calculating local contributions.
(02 hours)
07. Relationship between local money and formal money.(02
hours)
08. The budget (02 hours)
09. The budget in a form requested by donors/financing
parties. (02 hours )
10. Annual expenses (budgets per year). (02
hours )
11. Quarterly budgets. (02 hours )
12. Excel spreadsheets for the preparation of the budget.(02
hours )
13. The sustainability of the system.(02 hours
)
14. Tenders. (02 hours )
15. The bank structures with limitations imposed on the
project coordinator.(02 hours )
16. Auditing structures. (02 hours)
17. Protection of donors and financing parties.(02
hours )
Section 1 report : (06 hours) .
Section
1 : Project costs.[40 hours]
06. Method for calculating
local contributions. (At least 02 hours)
A typical budget of an integrated
development project provides for a total participation by the local populations
to the order of 3.400.000 hours’’ work, or 425.000 8-hour working days.
Supposing the adult population in each project area with 50.000 inhabitants is
37.500, the total work contribution foreseen amounts to just 11-12 hours’ work per
person over the two-year execution period, of 6 hours a year. This means that
what may appear to be an enormous contribution in fact boils down an average
contribution of about one minute per person per day over the 24 month period.
The question which arises is
which rate of conversion to apply to local labour in order to represent its
numeric contribution to the budget in a way which s acceptable to donors and
financing parties.
For the typical budget a formula was chosen
which allows for a contribution by the local populations of 25% of 100% of the
total project amount, being Euro
1.250.000 out of a total of Euro 5.000.000.
To arrive at a contribution
of Euro 1.250.000 for 425.000 8-hour
working days, a rate of exchange of about Euro 3 per day has been used.
The Euro
Table 1 of the World Human Development
Report for 2007/2008 prepared by the UNDP shows an average gross domestic
product for poor countries of US$
The reality in
rural areas in poor countries is worse still.
See, for example Fast Facts
: The Faces of Poverty (UN
Millennium Project.)
“[At the end of
2006] More than one billion people in the world live on less than one dollar a
day. In total, 2.7 billion struggle to survive on less than two dollars per
day.”
Using a rate of
conversion of Euro 3 for each 8-hour working day, a reasonable compromise was
sought between what is acceptable at local level and what should seem
reasonable to donors and financing parties.
The figure of Euro
3 per day is only one accounting solution. The conversion value indicated in
the budget can easily be varied according to the requirement of donors and
financing parties. In project reality, once the local money systems have been
set up in each project area, the populations are paid under the local money
system rules set up during the workshops held for that purpose, which are based
on 10 local money units for each hour’s work., or 80 accounting units for each
8-hour working day. For the populations, the conversion value attributed to
their work in the budget is entirely irrelevant.
1.
Research.
Make a one page report on the available
disposable money (in Euro) in your project area. If possible, try to give the figures for
each decile (10%) of the population. This is for instance the
10% of the poorest of the poor ; 10%
of the slightly average poor; and
so on up to the 10% wealthiest 10% of the population. In any case, provide
information on the distribution of income amongst the different sectors of the
population.
2.
Research.
You are in charge of the integrated
development project in your chosen area. On one page, give a very simple
explanation to the populations how they will be paid for their work for the
project.
3.
Opinion.
Do you think you will have problems
getting donors and financing parties to
accept a budget of the type foreseen in the Model ? Provide a one-page
opinion.
4.
Opinion.
Make a one-page analysis of the psychological
effects on the population of the inclusion in the budget of an allowance
covering the conversion into formal money of the contributions they make.
5.
Opinion.
Section 1 of the budget provides for
several drivers. At the beginning of the project they will be paid in formal
money because the local money system is not yet in operation. After the
creation of the local money system they will be paid under the local money
system. On one page state how you would convince the drivers that they would
benefit much more from their payment under the local money system than payment
under the formal money system. Feel free to express doubts, refusals, reactions etc.
◄ Eighth block : Economic aspects.
◄ Eighth block : Project costs.
◄ Main
index for the Diploma in Integrated Development
(Dip. Int. Dev.)
"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,
“Poverty is created scarcity”
Wahu Kaara, point 8 of the Global Call to Action Against Poverty, 58th
annual NGO Conference, United Nations,
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