A Workshop on Charting the Future Course for the Tribal Economy

The tribal community had voiced the need for having their own bank. Like having their own hospital, their own school, it sounded so logical. Let’s have more institutions ‘of our own’, rather than depend on the exploitative outside world! A very strong propeller to this requirement was also the need to remain aligned to the tribal value system, which has mutual trust and community bonding at its base. The working of a bank in the mainstream is based on distrust. The underlying objective therefore is to safeguard the interests of various stakeholders from each other. Thus a bank based on the tribal value system will operate from a very different paradigm.

There appears to be no significant erosion in the community value system. On the contrary, there is pride and a stated need to preserve it. So, the role that a bank is expected to perform in the tribal economy, at a need level may be similar to any bank i.e. pooling of individual savings, creating capital for enterprise and providing for contingency. But the economic direction it drives into cannot be the same as the mainstream economy, because the value system at the core is quite contradictory.

Having said the above, the tribals had never put across any concern with regard to the economic direction. If the purpose the bank is to serve is the same as that in the outside world, then it might be better to ride on the existing infrastructure there. To own a car has a definite feel good factor. But thinking pragmatically, it may be very expensive to own a car. If the purpose is to commute within the city, it makes sense to use a cab instead.

That brought us to the next question: What is the economic direction that the community charts for itself? To have a community bank or to ride the existing network of banks will be a function of that. To us the answer is very clear. If the stated need to preserve the community value system is real and intense enough, the community must strive to make itself less and less dependent on the mainstream cash economy. But the community needs to answer this question. So, a 2-day workshop was conducted to try and arrive at the answer and plan its execution.

Since the whole process had been initiated from the requirement for a bank, we had to start with the need for a bank. In the first half, we tried to answer the question as to whether we need to have our own bank to meet the needs envisaged. Two aspects were highlighted. Firstly, the needs articulated were very similar to those that the existing banking industry served. So, an existing bank can do the job. There is a concern about the fact that the tribals were not very conversant with the procedures and found many of the requirements very difficult to understand, leave alone comply with. But that can be addressed by providing some training and representing the tribals at these banks for a few months. That is not good enough reason to start a bank. Secondly, an understanding was brought to the table that running a bank is far too complex, risky and expensive as compared to any other enterprise. The power that the regulator (RBI) exerts on banks has no comparison to any other entity. Through a detailed examination of the complexity, it was unanimously agreed that if the community has to take the same economic direction as the mainstream economy, it is futile to try and start a bank.

The affect of the first half day of the workshop, in a sense, was quite devastating. A 20 year dream of having a bank of our own was shattered in half a day. Nonetheless, the need to mobilise savings of the community and to have the funds available for enterprise and contingency was felt. Our next objective was to unveil the myth that what the community needed most was more money. This wasn’t too difficult, but the question was, ‘what is the alternative?’ The answer was that the community becomes self-reliant to satisfy their needs and be as less dependent on the monetary economy as possible. In a separate context, there have been discussions about being self-reliant, but earlier, the notion of self-reliance may have meant earning sufficient money to buy the needs. Now, we were saying that we try to satisfy our needs without needing to buy them from the outside world. This was a new paradigm. Ironically, many tribals, had in their living memory, those days, when they got all they needed from the forests and were quite agnostic to what happened outside. But during the last couple of decades, cash had made such inroads into their lives that it was very difficult to imagine life with less cash, leave alone without cash.

The rest of the day and a major portion of the next day were spent in understanding the proposed alternative model. Heated discussions and involved conversations were witnessed. But at the end of it, the proposed roadmap was understood, or at least it seemed so. In a nutshell, the model was explained in three phases – as a roadmap. In the first stage, it was proposed that the community cumulates its cash earnings and buys its needs collectively. Collective buying would result in better deals. Also, members focus on internal trade i.e. satisfying some of their needs in kind, thus reducing the need for cash. In the second stage, community enterprises need to be formed. These will serve two purposes: Firstly, they will produce goods and services, which were hitherto purchased from outside. Secondly, they will provide goods and services to the outside world and earn cash. Thus, the pressure on cash reduces twofold. Also, individuals earning from the outside economy can move to the enterprise mode. That way, the community can accrue economic benefits on the income side as well (earlier, they would have benefitted through collective buying). The cash savings thus created can be used to fund community institutions like hospital, school and other enterprises, thus reducing dependence on donors. In the third stage, the community would obviate the need for donors to run their institutions, satisfy most of their needs through internal trade and earn more through community enterprises. In effect, it will build cash reserves and also reduce dependence on cash.

At an idea level, there was a consensus on taking this route rather than taking the default route of the cash economy. This was no mean feat.

The next challenge is execution. The starting point is to identify someone within the community to take responsibility…what remains to be seen is, is there sufficient fire to take this on or are they comfortable in the conveniences of their lives in the cash economy?