Thursday, March 06, 2008

International Newsletter on Sustainable Local Development

Newsletter #46
March 1, 2008


Message from the Editorial Team

Why does endogenous development remain the poor relation of development strategies in Europe?

People’s Summit: an invitation
Lima, May 2008

Our friend and colleague, Francisco Botelho passed away on February 3rd, 2008. Knowing that he was ill, in 2006 he wrote the following text which was read at his funeral.


Silence ...

It is true that in this slow sunset, one hears silence more forcefully. But it is not silence.

Tranquility ...

Under the violent light, nature rests. Some bats flutter above the courtyard. Water runs into the reservoir, almost imperceptibly. Everything in nature seems to occupy its own place. But it is not tranquility.

Peace ...

Suddenly, inside and outside me, everything is harmony. At this moment, everything sounds just right. Everything is right. But, nothing needs to be right, because the heart feels the plenitude. But this is not peace.

I do not know what this place has. This place where everything makes sense. This place where I am able to unite all that is in me. Without drama, without anxieties. Plenitude, maybe this is it, which fills me in the old courtyard of the ancestral home of my ancestors. Here I live, here live all my ghosts, here live the souls of Santa Marinha.

Perhaps one day may I be lead here to die. Maybe one day my ashes may be spread on these few meters that I overlook. Because more than any place in the world, I belong here.

Francisco Bothelo

Message from the Editorial Team

It is with great regret that we learned of the passing of our friend. We wish to offer our sincere sympathies to his family and all those who were close to him. We shall miss you, Francisco, but rest assured that you will continue to inspire us.

In this issue we are presenting a reflection on the place of endogenous development, in conjunction with exogenous development. Too often considered minor, this place could well be rediscovered in the current context as quite decisive. This article reflects a European perspective, but the stakes are fairly similar in other continents. Thus, we hope that you find the text as stimulating as we do.

In addition, we wish to share information from Latin America. The People’s Summit next May in Lima will be an opportunity for social movements to present alternatives to globalization policies currently prevailing in our societies.

Editorial Team
Yvon Poirier
Martine Théveniaut


Why does endogenous development remain the poor relation of development strategies in Europe?

In December 2007, the Circle of entrepreneurs for the future awarded a Grand Prize on pertinent and impertinent reflection to Marjorie Jouen from the Our Europe Association, for her contribution to the debate on this emerging and controversial theme.

Local resources are encouraged to follow behind exogenous development!

There is competition between territories, in the race for foreign investment. Bottom-up development retains a palliative and marginal character. Today, most means remain assigned to the attractiveness of foreign investments, ignoring the negative externalities of this model. Yet, the industrial strategies of conversion during the 70’s and 80’s in Europe have not fulfilled their promises. Other more modest strategies have been tried in the 90’s: either anticipating closures by creating a myriad of small and medium enterprises, mostly tertiary, or by gently redirecting the local economy by encouraging people’s initiatives, by cultivating a climate to generate activities, horizontal cooperation in the context of decentralization.

Local development, victim of its own success?

Even international organizations got involved. Local development is presented as an instrument suited for countries, regions and disadvantaged populations. The exogenous neo-liberal vision takes over: cumulative phenomena of concentration-agglomeration, specialization and acceleration of competition between regions, discontinuous polarization of territorial development around densely populated areas, new inequalities. Some less developed European countries were able to promote their comparative advantages and take profit of this external shock (Ireland, Finland), while others were unable for various reasons relating to their unique history and/or institutional weaknesses. The current craze for centres of training, whether rural or urban, simply reflects the general policy direction which mobilizes local resources for the benefit ... of exogenous development!

In political discourse, this movement distinguished itself by the progressive tightening of the Lisbon Strategy launched in 2000. Over the years, under the guise of streamlining, most of the recommendations relating to local development have been removed. In France, while the triennial public budget for the support of poles of competitiveness reached 1.5 billion euros, an approximate amount of 400€ million was allocated under the European Social Fund for local endogenous development, for seven years! "Ultimately, it could be said that local development has been the victim of its own success and it has been "hi-jacked" by the dominant economic model. By introducing the concept of competitiveness, the latter has been able to take over for competitive purposes intangible factors like territorial dynamism, or force neighborhood social relations into the market sphere."

Internal weaknesses and significant obstacles

It remains a matter of practice and conceptual tools are lacking. The transposition of uncommon experiments to draw conclusions is difficult, personal abilities playing a decisive role. The concept is vague: socio-political, it means autonomy and capacity for self-organization of local groups, at the socio-economic level, it attempts to provide an alternative to the dominant economy. This ambivalence nurtures diverse and sometimes contradictory expectations. The close ties that unite it to public authorities, making it vulnerable to budget cuts as well as political shifts. Between the private and public sectors, it does not always succeed to free itself from a client-centred approach. For some, it embodies the nostalgic dream of the yesterday’s world without a realistic understanding of the new globalized economic system.

The economic obstacles are considerable. On the one hand, foreign direct investment (FDI) brings new technologies, new knowledge and managerial skills. In France, one out of four new jobs is created thanks to international investment, while one job seven is linked to the existing FDI. Meanwhile, local endogenous development is characterized by a slow return on investment and a low capacity to generate profits. Five to ten years are needed to produce results, the time required to evolve mentalities and structural change in the community. It does not create economies of scale and generates little added value, hence the constant need for outside funding. Finally, it is a development based largely on short circuits and auto-consumption, which is therefore diametrically opposed to the dominant economic interests. The political obstacles stem from the social representations. Globalization can be fascinating. The easy road predominates the "greater public good". It continues to legitimize the nation states as the economic development actors, in defiance of the facts.

Revival avenues to reopen the field of possibilities

In the longer term, however, the state of the natural environment, the fragility of the financial system or the potential for conflicts induced by growing disparities of development suggest that local endogenous development has not had its last word. Do European regions and cities have no other roles than the race to “the best knowledge economy in the world "within the spatial division of labour? This is debatable. In fact, the problem comes from the exclusivity of exogenous development and its propensity to absorb all the rest. However, to function well our economies need some diversity to enable them to absorb any external shocks but also to reduce negative externalities. Nonetheless, local development plays a vital role in eco-diversity. Several avenues are suggested:

A deliberate action so exogenous and endogenous development could coexist: from regulation to financial support, through governing direction and contracting. It may be public, but also private, or rely on the wishes of civil society. In any case, it must be based on the emerging dynamics;
A logic of specification in order not to give free rein to other logic (concentration, specialization, or set of comparative advantages on the competitive model). It produces strong externalities and offers a reduced vulnerability to the exogenous impact, because it works around a set of specific accumulated resources in the territory and strengthens itself through the capacity of individuals and enterprises to redeploy.
The new consumer opportunities related to information technology and communication can aggregate at the global level very marginal applications, achieve profitable sales and production of items which had been neglected over time.
The relocation of the economy though often invoked remains at the level of a slogan. To give it political legitimacy, we must enrich and develop a coherent argument offensive, further the analysis of the negative externalities of agglomerations and establish a statistical system which goes beyond the UNDP (United Nations Development Programme) indicators.
Another possibility is to accompany the "residential dynamic" which indicates the existence of motivations for mobility other than employment, notably in connection with the advent of a service-based society and an ageing population. This new situation justifies economically local or regional public policies which would not only be geared towards attracting businesses, but also for the improvement of living conditions (housing, environment, public services, etc.)

If one pushes the argument even further, one can find the basis for a new theory of local development. Other than a palliative[E1] industrial crisis, open to the world as it is, this local dynamic reflects the desire to live together, of the place of residence and the proximity of services. The road is narrow because the toppling over towards consumerism would be a poor relief and the call for civic responsibility, although most promising. remains risky. "Finally, behind the place left by exogenous development to local endogenous development looms the question of the ability of our development model to become more sustainable, in the sense of not wasting natural or human resources and the conservation of the environment as well as the reduction of tensions and conflicts of all kinds. The next twenty years will be a test for all mankind ".
Martine Theveniaut: Abstract of the paper produced under the Grand Prize (Category: Development of territories), 20 pages.

People’s Summit: an invitation
Lima, May 2008

European and Latin American social movements are convening a People’s Summit in Lima in May, in response to the Summit of Heads of State and Governments of Europe and Latin America.

All social movements in Latin America and Europe are invited to mobilize for this meeting, and to sign a call to this effect.

The website provides all pertinent information regarding the Summit.

Note. This information has been sent to us by Nedda Angulo of the Grupo de Economía Red Solidaria del Perú (GRESP and RIPESS Latin America).
Our Newsletters are available on the WEB:

Special thanks to:
Évéline Poirier from Canada for the English translation
Brunilda Rafael from France for the Spanish translation
Michel Colin from Brazil for the Portuguese translation

To contact us (for information, feedback, to subscribe or unsubscribe):
Yvon Poirier

[E1]« Palliative »est un adjectif. On va dire « palliative care » pour les soins de fin de vie aux malades.

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