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Traditionally the adivasi economy was a subsistence
economy; meaning a non-monetary economy which relies on natural resources to
provide for basic needs, through hunting, gathering, and minimal agriculture.
Over the years there has been a steady progression away from subsistence and
self reliance towards a labour or wage economy dependent on outsiders.
Shortage of cash leading to borrowings from land owners led to them becoming
very vulnerable to exploitation. It is at this point we (Accord) entered and
started the land rights campaign and other interventions in health and
education etc all of which had an impact on their economy.
Today here in Gudalur they have a mixed economy – though
some of it is still non-monetary, most of it is dependent on money. This
dependence on money to meet their needs has become more complex because much
of it is market dependent both from the income side (eg price of tea) as well
as the expenditure side - as needs have become more varied and complex – eg
mobile phones, modern medicine, modern education, different clothing,
entertainment etc.
While our work has supported them to hold their own to a
great degree in this modern cash economy, there is no doubt that we have
hastened their entry and increased their participation in this economy.
Reclaiming land (a basic capital asset), tea planting, credit, health care
and to some extent education services are all interventions that have helped
them deal with the economy a bit more on their terms but also at the same
time increasing their dependence on the cash economy. Economic changes –
primarily, the increase in wages, government policies, especially free
rations, coupled with the provision of
services (by us) at much lower cost (especially in health care) has resulted
in the shortage of cash to meet their daily needs no longer being the main
problem. Surplus cash has allowed for much more conspicuous spending on
“non-essentials” like alcohol. The only realm where a shortage cash manifests
itself as a problem is in the area of housing. For a variety of reasons they
have given up a self reliant solution of building their own houses with
natural materials and now depend on cash intensive housing – where with a few
exceptions (employed Mullukurumbas) – government housing is the only answer.
Another aspect is that this increasing dependence on cash
co-relates to a decreasing dependence on other members of the community to
meet their needs. This can be seen in a variety of situations and is now
creeping into things like marriages and funerals which were complete
community affairs with very little cash outlay. This is affecting the core identity
of the adivasis as a collective. Where individual effort is monetarily
rewarded rather than collective ways of working. This is also resulting in
the emergence of class within a tribe where more “capable” individuals climb
the economic ladder more rapidly. The egalitarian, homogenous tribal society
is very much under threat from these developments.
In this scenario – we need to make a decision on the way
forward as far as the economy is concerned. There our different options
before us each with with its own sets of variables and pros and cons.
The leaders of the community (AMS, Animators) and in turn Accord
need to decide their course of action
based on their understanding of various variables, the challenges currently
faced and the likely outcome of the
approaches detailed below. None of the options may find uniform acceptance
from all members and sections of the community. The decision therefore may be
based on theoretical understanding and/or estimated impact and some sense of
consensus.
It is very important to evaluate all the options in depth
and without a bias in order to make a well informed decision.
Though this discussion has triggered from the need for a
bank, the scope of it covers the entire economic activity and it impacts
almost every aspect of the community. Therefore, the context for the
discussion should be reset. A financial institution or a bank cannot be
treated as a standalone entity in this context. The role it will play will be
a function of the broad direction regarding the economy that the community
decides to take or to refrain from taking.
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Option 1
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Option 2
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Option 3
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Conceptual Understanding
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Accord and AMS do not take a position. Allow natural
evolution. Extend support as required.
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Accord and AMS take a position to equip the community to
survive and grow in the changing economic scenario.
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Accord and AMS take a position to equip the community to
become economically self reliant, thereby reducing the impact of the
variables in the larger society.
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Likely Future 5 years hence
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· Almost
complete dependence on the non-tribal community for income generation.
· Increased
dependence on the non-tribal community for satisfying economic needs.
Decreased dependence on forest resources and skills within the community.
· Higher
heterogeneity amongst tribes. May lead to more pronounced discrimination and
hierarchy.
· Higher
resemblance to the larger rural society with regard to social ills –
alcoholism, gender discrimination, excessive spending on non-essentials,
etc.
· Higher
rewards for individual initiative – better paying jobs for those who get
themselves qualified, more profits for the business minded.
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Improved development indicators like average
income, education qualification, etc.
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Increased dependence on the non-tribal
community for satisfying economic needs. Decreased dependence on forest
resources and skills within the community.
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Higher heterogeneity amongst tribes. May lead
to more pronounced discrimination and hierarchy.
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Higher resemblance to the larger rural society
will give way to the traditional tribal way of life.
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Reduced dependence on the non-tribal community
for income generation due to community enterprise.
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Reduced dependence on the non-tribal community
for satisfying economic needs. Increased of retained dependence on forest
resources and skills within the community.
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Community bonding may increase
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Lower incidence of social ills.
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Reduced dependence on donors
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Confusion
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Ideological division amongst the community and
leaders (?)
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Failed attempts leading to reduced conviction
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Rationale
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1.
Allows natural evolution, which may result in
better learning, independent decision making ability.
2.
Primarily a re- active role for AMS and
Accord. Limited responsibility for outcome.
3.
Puts to test the tribal values. If the
initiative to preserve the values comes from within, execution challenges
will be far lower.
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1.
Wider acceptance amongst donors, government,
support teams and community (?).
2.
Readymade formats for education, execution and
monitoring progress.
3.
Higher bargaining power can be exercised by
collectives.
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1.
Sustainability and protection of the tribal
community values
2.
Fight the seemingly inevitable economic &
social exploitation
3.
Reasonable insulation from external economic
shocks, inflation, cultural and social degradation
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The Need and Role of a Financial Institution
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1.
Financial Education – savings and investments,
individual and family finance management, processes and legal know-how of
banks
2.
Capital creation and consumption loans
3.
Safeguarding & growing savings
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Financial resources (money) shall play a defined role in
the basket of overall resources, which include natural resources, local
skills, and community values. The role of money may be limited to being a
means of exchange. At a later date, an alternate local currency may evolve to
facilitate local trade and ward off impact due to dynamics outside the
community. The Rupee then can serve the purpose of only being a means of
exchange with the outside world.
The Bank however shall play the role of managing both
currencies, facilitating trading, creating capital through community savings.
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Framework and status of the Financial Institution
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A co-op credit society, co-operative bank or commercial
bank as per prevalent regulation.
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Broadly, the role of the financial institution includes
(partly) the role of a typical bank as well as a central bank. However, since
there are more resources to be managed (other than money), the scope is wider
than a financial institution and cannot be fitted into any existing legal
framework.
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Recommendation
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Since the role envisaged of a financial institution is
largely the same as played by regular mainstream banks, it is advisable to
ride on the existing network of banks. The effort of institutionalizing a
separate entity and managing the risks, regulation, operations and finances
isn’t worth the benefits sought. Also, there is no rationale for getting a
fresh license from RBI. The process of obtaining a fresh license is anyway a
long-drawn one, may require years.
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The nature of the intervention is very fundamental.
Therefore it requires clear conceptual understanding at least amongst the
leaders of the community. It can be (rather should be) initiated in small
sections of the population, where the need is acutely felt. It is important
that the intervention does not get morally coloured and also that it becomes
a principle-centered one rather than a person centered one.
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Suggested Plan of Action
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Plan A: Bank – Enterprise – Self Reliance
Plan B: Channelise Economic Activity (including banking) –
Enterprise – Self Reliance
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Plan A : Bank – Enterprise – Self Reliance
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Plan B : Channelise Economic Activity – Enterprise – Self
Reliance
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Basic Approach
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Begin by creating the bank as a separate institution,
conduct educational campaigns to encourage participation, formulate lending
policies, make the capital available for enterprise and so on.
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Begin by channelizing the spending through a single entity
(say JustChange), which begins by buying collectively for the community.
Goods, which are currently being purchased by individuals will be bulk
purchased and distributed to the members. This entity can also offer
warehousing facility to store goods, which are difficult for members. The
financial needs of the members shall be served in an incidental way, since
the system shall work on a pre-paid system. Excess liquidity will get built,
which can be used to create capital, to provide common facilities like housing,
etc. Members can avail the facility by agreeing to deposit their earning with
the entity. Village level memberships will possibly be very useful. Once
trading of goods assumes some critical mass, locally manufactured
alternatives can be explored, such that the community tries to move towards
self-reliance. For goods, which are difficult to manufacture within the
community, other similar communities can be explored (like the partners of
JustChange). In the next phase, trading within the community should be
carried on with an alternate currency. This will insulate the community from
the impact of devaluation of the Rupee (due to inflation).
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Execution Steps (Needs elaborate discussion)
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1.
Create a bank (incl proposition, operational
details, team, etc)
2.
Campaign for participation
3.
After few months of successful execution, move
to enterprise and self reliance (largely steps in the second option)
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1.
Identify the goods, which need to be
collectively procured
2.
Identify suppliers, distribution mechanism
3.
Work out financials & the scale for
feasibility of enterprise
4.
Estimate physical space requirements
5.
Risk assessment
6.
Open membership
7.
Pilot & Monitor
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