Director,
T.E.(Terry)
Manning,
Schoener 50,
1771 ED
Wieringerwerf,
The Netherlands.
Tel:
0031-227-604128
Homepage:
http://www.flowman.nl
E-mail:
(nameatendofline)@xs4all.nl : bakensverzet
and
"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,
The political situation in the project area is fairly stable, despite
recent political turmoil in
While
the capital structures installed are insurable against loss or damage by Act of
God such as lightning, hurricanes, or earthquakes, it is not possible to insure
them against loss or damage deriving from causes such as Act of Political and
Military Authorities, civil war, commotion, rebellion, and strikes. The cost of
insurance against such risks would be so high that it would constitute a major
on-going financial leakage from the project area, which is just one of the
major problems the project is designed to stop.
What
happens in case of loss of or damage to the capital project structures (where
applicable, before repayment of the interest-free seed loan after ten years)
must therefore be clearly addressed during project funding.
The
beneficiaries of this project are by definition poor and the loss or damage in
question derives from causes entirely beyond their control. To require these poor
people to repay (a loan after ten years for) capital structures they have lost
for reasons beyond their control is in profound contradiction with the short
term and long term goals of the project. The external funding agency (has, has
not) access to forms of insurance available to cover funds at risk in projects
in developing countries. It (has, has not) undertaken to ensure, at its own
cost and by way of gift, that funds for this project are insured.
(Where
applicable : Since insurance is not available, the external funding agency has
accepted that in the case of loss of or damage to project structures deriving
from causes beyond the power and control of the users the interest free loan be
converted into a gift so that users are freed from their contractual
obligations. )
Normally,
at the time the (uninsured) loss of or damage to the capital structures occurs,
users will have (contributed funds, paid a part of the loan) into the
Cooperative Local Development Fund. The money which has already been collected
in the Cooperative Local Development Fund at the time the loss of or damage to
the capital structures occurs:
((a) Must be used
immediately to reinstate the capital goods lost or damaged.)
((b) Has to be repaid to the lenders at the end of the original ten years'
interest free loan period. )
((c) Has to be repaid immediately.)
((d) Will, subject to analysis of the current political situation, be
integrated by a further loan to enable complete reinstatement of the capital
structures so that the project application can make a re-start. )
Next file :
04.18 Circulation of information.
Back to:
04.16
The effects of inflation on the Cooperative Development Fund.