Friday, February 04, 2011

International Newsletter on Sustainable Local Development
Newsletter #75
February 1st 2011


Message from the Editorial Team

The promotion of a cooperative territorial economy to combat against poverty and social exclusion: Towards European P’ACTS
Practice and potential of a co-operative territorial economy for the future of Territorial Pacts
Four scenarios of local economic development

Message from the Editorial Team

Already a decade into the 21st century has elapsed. As all of you, we see that the global situation has not improved and we find scandalous that a billion people live on incomes of less than $1.25US per day. As all of you, we see that the global situation has not improved and we find scandalous that a billion people live on incomes of less than $1.25US per day, and that attaining the Millennium Development Goals is proving less likely in many areas.
However, the past ten years opened new perspectives. The vast majority of humanity considers it necessary to implement measures to save the planet itself. Despite the failures, or near failures, of the Copenhagen and Cancun meetings, the thrust is very strong for firm commitments in most countries.
The end of this decade illustrates the obvious failure of neo-liberal capitalism as an economic system able to meet the needs of most people. At the same time, we are very encouraged and eager to continue our efforts: we are thrilled to see the advances in building concrete alternatives that provide answers to basic needs, particularly those that combine the social economy with sustainable local development. We also recognize the considerable progress of social movements in building the global dimension of their advocacy, including the workings of World Social Forums.
It goes without saying that the challenges are enormous. Reversing the dominant trends and making these alternatives mainstream will take much effort. We will not necessarily see this outcome in our lifetime, but we hope that younger generations will realize it and live it!
It is in this perspective that we wish to continue our modest work.

Editorial Team
Judith Hitchman
Yvon Poirier
Martine Theveniaut

The promotion of a cooperative territorial economy to combat poverty and social exclusion: Towards European P’ACTS

Committee of European Regions, Brussels, November 23, 2010

This meeting was one of the follow-up events to Workshop 7 “Democratic participation and territorial anchorage” organised by Pactes Locaux at the Lux'09 Forum in April 2009, about which we keep you regularly informed. Building on the consensus achieved at this event, we are promoting the results for public debate in Europe. In the 2010 European Calendar of events, a Year for combating poverty and social exclusion was included.

This meeting was prepared by a European organizing committee composed of a dozen individuals and organizations, all volunteers, who wish to become «a permanent collective resource pool». Its composition is inclusive of languages other than French, and opened to other topics and new networks (1). This is an opportunity to hold a meeting of upstream work, widely open to Europe and the Intercontinental, with financial support of the FPH. Hosted by the Committee of Regions in Brussels, November 23, 2010 the group publicly announced the birth of P'ACTS.

The committee members chose to start from the grassroots – from their results and their analysis - to create a dialogue with citizens organized on a territorial basis, towards regional and local governments, businesses, researchers. They opened a stimulating reflection on "the global in the local." “We are all meeting to defend a cause that we have long supported, one whose solutions can be found at the local level, and that should also dare to include a global dimension. All of us have contributed at our various levels of governance, contributed in our own ways, with our complementarities, so that all people may become actors of their own development. With mutual respect, trust and perseverance, we developed significant relationships that have progressively contributed to our work being perceived as a legitimate contribution to real solutions to the crisis. We have consistently promoted that citizens themselves are the cornerstone to jointly design and build the best response to their own needs and take shared responsibility for their future. This approach means that structures and institutions need to fundamentally rethink their role and way of working. We, as organised civil society, are here to help, to talk things through and come up with answers and solutions. As they so nicely say in Quebec “Solidarity means looking people straight in the eye.” Introduction: France Joubert, president

The approach developed by peers, now recognized by those peers

Concrete achievements in duration and diversity of contexts provide answers to basic needs such as employment, food, local sustainable development, culture, finance, services, and citizenship. They all show great potential for socio-economic transformation and democratic innovations to rebuild the real economy and community life. The public spaces of debate and resources they stimulate meet head on the difficulties of reconstruction responses through cooperation on a territorial basis. The anchoring of their organizations combines multiple levels of relationships on an inter-sectorial base, horizontal and not hierarchical: regional and local jurisdictions in their lives, European by their culture and politics, intercontinental, because they are also citizens of the world. In reality, they are organized into networks that have diverse functions: geographic (employer groups, purchasing groups, cooperatives, living areas...) a place for exchanges and debates in order to link together to exert advocacy, resource centers to inform, sustain, promote, report progress in public policies, from the local to the European level. They are often linked to research organizations (academic or not) that can use levers for the interaction between action and research for the improvement of the actions. They are also areas of organization or even negotiation. This also allows for older generations anxious to pass along knowledge. In summary, they are prototypes to "take the helm" where they live, and to "stay the course on social, economic and ecological change in turbulent times" (Mike Lewis). To continue on this road, they build convergence.

P'ACTS intends to become a public space for multi-level dialogue enshrined in the European Agenda.

How to do more with less? How to open and "make do" with the new players that are the Regions and Cities, but also the actors of organized civil society? In fact, these are the major players in the real economy and the renewal of democratic life. The new Lisbon Treaty allotted this development in 2010: territorial cohesion has become the third pillar of the European project, but in practice, resistance is powerful, because power is concentrated in the Commission, and subsidiarity under the tutelage of Member States. "Multi-level governance", a concept promoted and adopted in 2010 by the Committee of European Regions is the new instrument that will allow local and regional authorities to transform things. Finally, after being abandoned for ten years, “local development” is inserted in the 2020 strategy of cohesion and whose budgets are now being decided.

The P’ACTS plan to relay and organise sustainable local development that serves a cooperative territorial economy by learning from practices they have used to build concrete responses. Considering the pertinence of the “Learning journeys”, (a tool for learning from each other via local visits) P’ACTS initiated a new European cycle for 2011 and 2012, to “ pool the expertise acquired through practice in consolidated territorial projects to increase the number of people and territories that volunteer to acquire this integrated form of territorial action”. Because re-scaling is blocked, by the idea of "the best practice" (the oasis in the desert), or procedures that lock the initiative in a cage they prevent them from taking off. A report for the European Commission underlines “the almost total lack of investment in reliable, solid mechanisms for pooling and sharing new ways of working, exporting acquired skills and know-how in other geographical and economic contexts as well as those of other countries” (2).

Sustainable local development can provide a positive road to overcoming the current crisis, if certain conditions are respected: “A strategy designed and applied to provide concrete answers to essential everyday issues: managing shared resources, activities and employment, living conditions and services all aimed at providing the perspective of a joined-up opening and solidarity between territories. A strategy aimed at providing a medium- and long-term legal framework to local and regional issues (territorial interactions and co-operation). The key principle is based on shared responsibility. Multi-level governance is the instrument. It includes organised civil society as a stakeholder in building and implementing actions, as a collective actor in the real economy and in territorial governance. A strategy based on different sources of funding in a programme framework that facilitates; the rules for implementation should be simple and transparent. The objectives for results should be defined with both quantitative indicators (how much/many) as well as qualitative indicators (how/what impacts) such as: satisfying essential needs in the real economy: the collective quality of our lives, resilience, the vitality of our democratic and cultural existence, a lesser dependence on fossil fuel as well as on imported food or foreign finance.”

An action plan leading up to the 5th Intercontinental RIPESS meeting in 2013

Scheduled for Asia in 2013, this time-frame opens opportunities and stimulates us to continue building on the results the Lux'09 workshop. At the Kuala Lumpur meeting in 2011, P'ACTS hopes to participate actively on “the territorial approach of a cooperative economy” by sharing key advances based on its case studies. The theme of this meeting is: "Social Enterprises as a vehicle for socio-economic transformation of communities."

Martine Theveniaut
Pactes Locaux

(1) Here you will find a report on the meeting (in French only), and the appeal to launch P’ACTES (French and English). At the following link you will find all presentations made on November 23. They can be downloaded. .
(2) Cohesion support for Local Development: Best practice and future policy options (2009-2010) DG REGIO Ref: CCI n.2009.CE.16.0.AT.081. Head of Project: Marjorie Jouen (Notre Europe), ADETEF, AEIDL City Consult

Practice and potential of a co-operative territorial economy for the future of Territorial Pacts

Presented in Brussels, November 23, 2010, by Karl Birkhölzer, economist, Technologie-Netzwerk Berlin e.V

Four scenarios of local economic development

What do we mean with local economic development? We could distinguish between a descriptive or analytical approach and a more activity oriented or political one. From a descriptive perspective local economic development would cover all economic activities which happen at local or regional level and/or have any impact on the localities.
But far more interesting is the political perspective of local economic development: It is definitely more than just “economic development at local level”; it is a special way or certain type of economic development and different from other forms or types of economic development, and the argument here is that social enterprises play a key role in developing such strategies. To understand its specific character I will present four scenarios:

The first scenario is called “development from above”: The main actor here is the state, working top-down from central government to regional government and local authorities. In this scenario the local actors, people, enterprises as well as authorities wait for decisions as well as resources coming from above, because they believe that the state is either mainly responsible for all kinds of development or has only the power to do so. This attitude is often found in societies with centralized governments, not only in authoritarian regimes, but also in strong welfare states. This scenario is usually accompanied by a high degree of dependency and arbitrary measures. And it is finally not working anymore, if the state runs into political or economic troubles.

The second scenario is called “development from outside”: It often follows the breakdown of the first option. What they have in common is that the local actors believe they cannot do anything on their own. Therefore, outside “investors” are needed to bring in the necessary resources, especially money. In all parts of the so-called “underdeveloped” world everybody is desperately looking for investors. I wonder where these strange animals live and how to attract them. All I can see is a disastrous competition between communities, regions and countries where only the investor benefits from an inevitable dumping process with low wages, property prices, tax reductions and so on. Furthermore, communities which try hard sometimes spend their last available resources in dubious infrastructural programmes which should attract investments like golf courses, luxury hotels and conference centres, industrial sites and office space, business development centres and so on. And like in any other competition the winners are always only a happy few, the majority are losers. I am not arguing against infrastructural programmes as such, but there is definitely something wrong, if they are only designed for the needs of outsiders. And even in case of success the objectives of the investor might not be the same as the community ones’. Financial investments of this type are nowadays highly dynamic and flexible so that they can easily move from one place to the next, if they can find better conditions or if plans have changed. From the view point of “sustainability” attracting investors from outside is a very risky business.

The third scenario could be called “wait and see”: The local actors remain more or less passive waiting for things to come. Some might look at it as a quasi natural process of selection, some might have resigned as a result of the failures of option one and two. The traditional “solution” in this scenario is migration. In fact, this is the most popular option, although it becomes more and more difficult to find places to go, not only because of political restrictions, but also for economic reasons, because the islands of prosperity around the world become smaller and smaller in size and numbers.

The final scenario I would call “development from within”: As option number one is dominated by the state, number two by private investment and number three by fatalism, in this scenario the local actors, the people themselves play the key role. And here we are at the heart of Local Economic Development: It starts when people realize that neither the state nor the market economy serve their needs or solve their problems, and if they are unwilling or unable to leave their homes. In this situation people embark (usually after a period of not successful protesting or campaigning) on strategies of economic self-help which often lead to the foundation of new types of (social) enterprises.

One of the pioneers of local economic development, Sam Aaronovitch from the Local Economy Policy Unit in London (Aaronovitch 1996; Birkhölzer 1999) put it in a nutshell: “There is no escape from self-help!”
After outlining the failures which are brought on by the first three scenarios, Karl Birkölzer presents with supporting examples, the components of what makes the success of “development from within”: responding to unmet needs is to rediscover that one is never better helped than by the confidence one places on one’s own capabilities, in cooperation with others. This is what generates and regenerates the capital. First it is confidence that recreates local economic cycles. “One of the most disastrous attitudes is if people believe, they cannot do anything without access to money. This leads either to the “wait and see” scenario or to the dependency on donors which might have their own ideas about what their money is for. But localities or areas of economic crisis are usually characterized by the lack of it (social capital)... the most important resources are the capacity of the local people, its knowledge and abilities. Therefore… the local economic development process has to start with at the first glance non-economic activities which are centred around community building and community development.”

Karl Birkhölzer Technologie-Netzwerk Berlin E.V.

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Special thanks to:
Paula Garuz Naval (Ireland) for the Spanish translation
Michel Colin (Brazil) for the Portuguese translation
Évéline Poirier (Canada) for the English translation

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