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Sustainable Livelihoods

Ashok Khosla, August 1993

The first step towards sustainable development is to create sustainable livelihoods.

A sustainable livelihood is simply a job. But it is a job that is meaningful and remunerative and does not destroy the resource base of the community or country.

Sustainable livelihoods produce goods and services that are needed to better the lives of the people. At the same time, they create purchasing power, and with it greater economic and social equity. Being environment-friendly, they minimize waste, use renewables and residues and generally conserve resources.

To break out of the present poverty-pollution-population trap, India needs to create, in as short a time as possible -- say, ten years -- some one hundred million sustainable livelihoods to cover the backlog, plus a similar number for the new entrants into the job market With this many jobs created, each family in the country can hope to have one member with a reasonably paid job.

Neither current national development policies, nor the activities of the corporate sector are geared to achieve this kind of goal. Given the present direction, we will be fortunate if together they are able to create ten percent of the sustainable livelihoods needed in the country at the end of the decade.

To bring these jobs into the economy, these tens of millions of jobs each year, no number of big darns, vast factories, mega power stations and huge chemical complexes, even in the aggregate, can begin to make a dent. The formal sector is geared to deal primarily with the demands of the urban rich and the problems of the industry that aims to satisfy them. Creating jobs for the poor or protecting the resource base on which the poor depend is not one of these. On the contrary, their primary goal is to minimise labour problems by maximising automation and to pass the environmental costs on to someone else. And who else, if not the poor?

The answer lies elsewhere, far outside the imagination of our planners and decision makers. It lies in small scale, decentralised industries of a new kind. Such (mini-or micro-) industries must use good technology to raise productivity and local resources to make products and services that satisfy the needs of local people without destroying the environment.

But any economist will quickly assure you that small industries spread all over the countryside cannot "compete" with the economies of large scale urban production. And that is correct, except for the wrong reason. It is not the economics of scale that makes large corporations more effective and profitable, but the massive subsidies they extract from society; subsidies in access to infrastructure, subsidies in cheap finance, subsidies in underpriced and more reliable energy, and subsidies in a thousand other ways, not to mention direct manipulation of the financial and power structure to their advantage.

All the small enterprise needs to beat the large corporation at its own game is better access than it has today to technology, finance (not necessarily cheaper finance), and marketing channels. The primary role of the public sector in facilitating these is to provide basic infrastructure for communication and transportation. The myth of the "economies of scale" that justifies the bulk of national investment going into urban infrastructure and institutions is as hollow as it is deeply embedded in a manifestly bankrupt theory of development economics.

The design of rural enterprises is a complex, still unfamiliar business. They have to master the technology-environment-finance-marketing linkages, while keeping their overhead costs low. They must do this without access to engineers, management specialists, friendly bankers or market infrastructure, either for buying raw materials or for selling products.

An interesting solution to these seemingly insuperable obstacles lies in building franchised networks of small, private enterprises capable of growing and processing biomass to manufacture products for both the urban and local markets To be successful, the franchise arrangement will have to provide high technological and marketing inputs and access to capital.

Taking the complete cycle from biomass generation to end-product use, entire jobs can be created at costs of a few thousand rupees, the environment can be enriched at no cost at all, and the basic needs of whole communities can be met through the additional purchasing power created. The hand-made, recycled paper unit at TARA demonstrates the possibilities in this direction.

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