India’s Most Significant Innovations Have Roots in Civil Society

Handpumps, participatory rural appraisals, wadi programmes, and so on, all came from an innovation or technology developed by civil society | Picture courtesy: Aga Khan Rural Support Programme (India)

Handpumps, participatory rural appraisals, wadi programmes, and so on, all came from an innovation or technology developed by civil society | Picture courtesy: Aga Khan Rural Support Programme (India)

By Apoorva Oza
AHMEDABAD, GUJARAT, India, Jun 4 2019 – When we look at some of the things we take for granted in India today, there is a common thread to all of them. Every single one. They all originated from civil society.

People hear the word civil society and react differently; and it depends on where they come from. For the business leader, social and environmental concerns are impediments to business. “Environment ke liye poora project band hojata hai, what about growth, what about the economy?” (Entire projects have to be shut down for the sake of the environment).

I’ve also been in conversations with some government officers who say, “woh kaam chhota karte hain aur credit bahut le lete hain. Kaam toh hum karte hain paisa toh hamara hai.” (The nonprofits hardly do any work but take all the credit. We are the ones who do the work, the ones who put in the money).

But nothing is farther from the truth. When we look at rural India, and look at some of the things we take for granted todaybe it women self-help groups (SHGs), ASHA workers, biogas plants, RTI applications, and so onthere is a common thread to all of them. Every single one. They all originated as innovations in civil society.

 

Our largest government programmes were born in civil society

 

1. National Rural Livelihoods Mission (NRLM) and Self Help Groups (SHGs)

When we look at rural India, and look at some of the things we take for granted today—be it women self-help groups (SHGs), ASHA workers, biogas plants, RTI applications, and so on—there is a common thread to all of them. Every single one. They all originated as innovations in civil society.

One of the largest programmes of the governmentthe National Rural Livelihood Mission (NRLM)is based on women self help groups (SHGs). And the concept of an SHG was developed by Aloysius Fernandes and his team at MYRADA.

In the 1970s, MYRADA was working with large primary agriculture cooperative societies (PACS), all of whom seemed to be failing. In some of the geographies however, while the cooperatives had collapsed, there were some villages where small groups were saving and giving credit to each other.

Aloysius and the MYRADA team saw this, identified them as empowered groups that the banks could lend to, gave it form and structure, and took it to NABARD.

NABARD realised the value of what MYRADA was helping build, because they themselves were trying to reach out to the poor and their existing institutional portfolio was failing because the cooperatives weren’t functioning. They supported MYRADA and then pushed the banks to lend to these groups of poor women who saved regularly.

So, in a sense the SHG movement was started by MYRADA and to some extent, NABARD. The state was not in the picture at that time.

Then the first SERP programme came up in Andhra Pradesh. They used the base created by NABARD and MYRADA and they promoted the SHGs. And because the SERP programme worked, and because the World Bank was funding SERP, when the government created the NRLM, they used the same principles and structures.

Today the NRLM, which rides almost entirely on the SHG infrastructure, is the only large-scale institutional arrangement that the government has to reach out to poor. Every government uses it, regardless of what end of the political spectrum they occupy. It is pro-poor and still has elements of the marketthe state can extend its entitlements directly to the people, while also enabling them to be self-reliant by promoting enterprises. But if there hadn’t been MYRADA, we probably wouldn’t have had NRLM today.

 

2. Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) 

India’s most talked about government programme MGNREGA came about because Jean Drèze and others in civil society drafted it, and advocated for it.

The idea of MGNREGA did borrow from an earlier employment guarantee programme that was started in Maharashtra by Mr Vitthal Sakharam Pagechair of the Maharashtra State Legislative Council, and a social activistwho wrote the first draft in 1965. But it was only when several civil society activists fought for it in the early 2000s, that it became something that the Central government took seriously and passed into national law.

 

3. Integrated Water Management Programme (IWMP)

The early work around watershed management was done in Sukhomajri in Haryana. A more integrated approach was later piloted at Ralegan Siddhi by Anna Hazare. This, and the Hiware Bazar model by Popatrao Pawar became models to emulate, and the IWMP guidelines that are in place today are a result of contributions from many nonprofits.

These are just few examples but the story repeats itself again and again regardless of the sector. Consider these two others examples; one old and one relatively recent:

  • ASHA workers: The concept of ASHA workers was born in Jamkhed. The ArolesDr Mabelle and Dr Rajstarted a programme in 1970 which involved semi-literate women delivering home-based care to mothers and newborns. It was taken to scale by the government, and our country now has over six lakh ASHA workers.
  • 108 Service: The 108 service that everyone lauds as a model of efficiency and scale was started as a service by EMRIa nonprofit in Andhra Pradesh under the aegis of Satyam Foundation (EMRI was later taken over by the GVK Foundation). It was handed over to the Andhra Pradesh government, and later, other state governments implemented it. Today it runs across 15 states and two union territories.

The list continueshandpumps, participatory rural appraisals, wadi programmes, and so on. Essentially, almost any government programme worth its salt came from an innovation or technology developed by civil society. This is not to belittle the role of the state, which is by far the major development actor, but to emphasise the role of civil society in nation building.

Despite this, we are seeing a marginalisation of the civil society sector by markets and the government because we haven’t told our story well enough.

 

Civil society is too self-effacing

What is the philosophy of a civil society? We believe that we will develop solutions which over time the community will own and the state or market will support. When that happens, we believe our work is done.

In a way, it’s a very phoenix-like approachyou create and you disband. And you start all over again on some other problem. We don’t patent anything; we don’t take credit for anything.

And perhaps this is because we know that something as complex as social change requires the contribution of many peoplecommunities, grassroots organisations, the state, funders, and so on. But we have gone to the other extreme. We don’t even acknowledge our role in the change; in fact, we undermine it.

When people ask us if we have successfully run a programme, we say “Nahi humne toh kuch kiya nahi hai, ye toh sab gaonwalon ne kiya hai” (No, we didn’t do anything, it was the villagers who did everything). And while it might be politically correct to say that we are only the catalysts, and the real work is done the community; it’s not always an accurate representation.

Civil society is more than the catalyst; we are innovatorstechnical innovators and idea innovators. We take really complex problems and come up with new ways to address them. We do effective work but refuse to take credit for it. And our refusal to take credit only feeds into the government’s view pointif the community is doing everything and civil society isn’t doing anything, then we will deal with the community directly.

 

People don’t understand our unique proposition

Because we have undermined ourselves, our unique proposition is not known. Our value to society is not only what we do or how we do it, but also at what cost we do what we do.

Many of us work at ridiculously low costs but we don’t document it, and we don’t measure it. So, some corporates, who want to work on social programmes, believe that they don’t need nonprofits. All they have to do is take the nonprofit’s staff and implement it on their own because it seems easy and cheap to do so.

The reality is different. Running a programme is complex. It takes years to build trust. And it requires humility, rigour, and persistence. It requires training, all-weather support, and hand-holdingall things that lead to an enabling ecosystem that a good nonprofit creates.

But some corporates don’t know this; they just want to take on the programmes because they believe they can do it better on their own rather than share space with nonprofits. It’s we who are at fault because we allowed this to happen.

 

The assumption is that nonprofits cannot scale

Scale is the new measure of ‘success’, where others find civil society wanting. Small, local and specialised civil society organisations are disappearing, and are not considered relevant in this new India which is in a hurry.

If one studies what has worked in the past, one realises that many, relatively small organisations have transformed the country. Consider MKSS, which started its work in a small village in Rajasthan, and even at its peak, worked largely in Rajasthan for the citizens’ right to information. That the RTI Act eventually became one of the most effective legislations by the state to hold itself accountable to its citizens, is a story of how impact is not necessarily a function of size.

We are constantly told by corporates and governments that we can’t scale. But then I reflect on what is it that a large corporate that has scaled typically does? They pick one slice of a human being’s life, for instance, the fact that people might like to drink cold sweet water in summer. It is one needone would think a very unhealthy need but nevertheless a need. And then a multi-billion-dollar soft drink industry gets created around this need. You serve nothing; in fact, you take a poor man’s good water and convert it into this sweet water and charge him INR 20 for it. That is your net value addition to society. So that is all you know. To understand one very small slice of a human being’s need and address it.

Now compare that to what civil society is trying to do. We are trying to transform the conditions in which human beings live. This is dramatically different from creating a market for one small need of an individual.

It’s easy to scale a product that is uni-dimensional, serves a very specific micro-need, to which you can throw a ton of resourcesmoney, talent, technology. But can you do it when it involves changing entrenched social norms across all aspects of a person’s life and livelihood?

The problem is while we in the sector might know how to do some of this, we don’t know how to articulate it and how to measure it.

And because we haven’t articulated it, we cannot argue for resources, for space, for anything really.

 

Even if the state hasn’t failed, we will always need civil society

Civil society is that critical third pillar of the samaj-sarkar-bazaar (society-government-market) triangle. Without it, no society can function. Even in most successful countries across the world there will always be people who are marginalised, and issues that are not on government or company radars.

There will always be a human problem which the market will never take up and the state will not realise either, because it is too buried, or too out there in the future. Even in its best form, the government is not designed to look at these things. And countries that have a majoritarian democracy will ignore those who are not a part of their majority. It’s a design problem.

So, who will look out for these people, who will help change entrenched social norms, who will build awareness of issues that matter?

 

Apoorva Oza is the chief executive officer of Aga Khan Rural Support Programme (India). He is also actively involved in founding and supporting nonprofits and nonprofit networks, as well as influencing government policy. A mechanical engineer with a diploma in rural management from the Institute of Rural Management, Anand, he has also completed courses from Cranford University, United Kingdom, and Cornell University, USA.

 

This story was originally published by India Development Review (IDR)

 

Transforming Society, Financialization Destroys Social Solidarity

By Michael Lim Mah Hui and Jomo Kwame Sundaram
PENANG and KUALA LUMPUR, Jun 4 2019 – Finance has not stopped at dominating the real economy. The tentacles of finance have reached into significant, if not most parts of society.

Gerald Davis characterises modern society, where finance is dominant, as a ‘portfolio society’, in which aspects of social life have been securitized and transformed into a kind of capital or investment to be managed.

Michael Lim Mah Hui

Social insurance
One area that affects many is ‘social insurance’, with state-organized social protection being replaced by market options for individuals. US social security was introduced as part of Roosevelt’s New Deal to provide adequate economic protection to workers after retirement.

This program has been compulsory, universal, and managed by the state. This was often supplemented by private pension funds provided and managed by companies for their workers.

Under President Reagan, the ‘401K’ was introduced in 1981 to allow and encourage employees to manage their own retirement funds and plans. Companies were only too happy to replace their pension plans with 401K as many had unfunded pension liabilities.

The responsibility of investment and management of retirement funds now rests with employees, most of whom are poorly equipped to do consistently well with their market investments. Asset management funds have since mushroomed, with some becoming big business.

Housing
Two other areas where financialization has penetrated social life through securitization are housing and education, with illiquid assets transformed into liquid ones to be bought and sold.

Jomo Kwame Sundaram

Thus, financialization has sought to marketize all products and services. Banks are supposed to provide credit for the wheels of industry and trade. But more and more banks have moved away from this to instead provide credit for personal consumption and investment or speculation.

Financing home mortgages is big money. Bank lending to the property sector in developed economies accounts for between 60% to 70% of total credit. Traditionally, banks provide collateralized long-term loans to finance housing. These loans sit on the books of banks until the mortgages are paid off.

Financial innovation
From the 1980s, with financial liberalization and deregulation, ‘innovative’ new products were introduced, with the most impactful being loan securitization. Illiquid bank loans were consolidated and packaged as securities to be traded, making illiquid assets liquid.

Banks could then sell off these securities to investors, thus reducing illiquid assets on their balance sheets and freeing up capital to book more loans to be repackaged and sold off. This process can be repeated ad infinitum.

Non-market finance has thus been transformed into market-based financing involving ‘slicing and dicing’. One option to increase profitability is by ‘slicing’ loans by credit quality into tranches to be sold to investors with different risk appetites.

In this structure, loans with weaker credit quality are mixed with better ones before ‘dicing’ them to be sold on, betting that defaults will only be limited to tranches with weaker credit ratings and by understating the problem of contagion. All these became known as collateralized debt obligations (CDOs)

In other words, ethereal financial products with weak or vague links to actual underlying assets have been created. CDOs have been used as underlying assets, and even repackaged for the next level of CDOs, referred to as CDO2, or CDO-squared, and after another round, as CDO3.

The CDOs business soon proved lucrative and quickly became popular. The total volume worldwide increased 23-fold in eight years from US$23 billion in 2000 to US$544 billion in 2007, when they imploded; the rest is history.

Besides CDOs, there are credit default swaps (CDSs). These CDSs are ostensibly innovative new forms of insurance written by financial institutions and sold to buyers who take a different view of the default risk of the CDOs. For an investment banker, it is all about “taking a view”, i.e., betting on a financial product that has been created.

Human ‘capital’
The same story goes for education once principally provided by the state to all citizens, often free of charge at elementary and secondary levels, and sometimes or partly at tertiary level. But more and more education is now seen as ‘human capital investment’.

With cutbacks in state funding, expansion of private schools, and fee escalation, education has become an expensive investment, with many forced to take student loans. Student loans form the second largest category of loans just behind housing mortgages. This again offers opportunities for profit making.

Many student loans have been securitized into student loan asset-backed securities (called SLABS) to be traded. In 2019, total US student debt amounted to US$1.5 trillion involving 44 million borrowers. The average US college student now has US$34,000 debt hanging over his or her head.

Dr Michael LIM Mah Hui has been a university professor and banker, in the private sector and with the Asian Development Bank.

Jomo Kwame Sundaram
, a former economics professor, was United Nations Assistant Secretary-General for Economic Development, and received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought.