Thursday 20 November 2008

Innovations in financing for development: STRO conference calls for 'without a box' thinking

You cannot solve a problem from the same consciousness that created it” - Albert Einstein.

Last week's conference at STRO in the Netherlands dealt with the need for a different consciousness to overcome the current financial crisis and determine future trends in development cooperation. This consciousness involves, amongst others, open mindedness, flexibility, trust and respect.

In a general introduction, Henk Molenaar of Wotro described three trends in development. They include a broadened development agenda, a movement from a linear model towards a trial and error process of innovation, and the need for a demand driven approach to obtain sustainable results. Molenaar proposed a demand driven endogenous innovation process that is embedded in local cultures.

In two panel debates three business representatives debated first with development practitioners and then with Henk van Arkel. All participants in the debate work on innovation in their respective sectors. The business representatives were modest in their best practices and explained that development organisations could learn more from their failures than from their successes. Failures mentioned were an inability to set up a successful framework that generates innovation and to provides space for failures. Rob Veldhuizen took these suggestions a bit further" “integrity and respect should return into the system”. Finally, the blind trust in the free market that dominates our current system was attacked by all speakers.

Henk van Erkel, Director of STRO, introduced STRO’s vision on the financial crisis. He argued that trading balances should become more balanced. Gert van Maanen suggested that “most people living in poor countries are living in a structural depression, they are not on any agenda that rightfully safeguards their interests”.

STRO also illustrated a complementary financial system that safeguards the interests of such poor people. It is called ‘UDIS (Unidad De Intercambio Solidario)’, which is a new means of payment that complements national economic systems.

STRO has implemented UDIS in various Latin American countries. The advantage of UDIS is that it provides for cheap working capital, explained Cristina Santos. A cooperative that uses UDIS as means of payment is Coopevictoria. It started in 1943 and is now thriving, thanks to it’s good reputation, innovative approach and demand driven activities. These activities include coffee and sugarcane production and processing.

The debate provided new insights in the paths set in current development thinking. Positioning the debate in relation to the current financial crisis increased participants’ involvement in the debate. Innovation requires a different consciousness, that might best be described by Wichert van Engelen: “We should move towards radical innovation, from out-of-the-box to without-a-box thinking”.

By Stephanie Zwier

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