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<DIV><FONT face=Arial size=2>Friends:</FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2>Here is an excerpt from the 141st Presidential
address given by Prof. Bruce Alberts to the Fellows of the US National Academy
of Sciences (19 April 2004). I hold Prof. Alberts in high regard. Not only is he
an outstanding life scientist, but he has an insightful understanding of the
science-development interface and he is genuinely concerned about the problems
faced by developing countries. </FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2>The full text is available on the NAS website.
I wish the editors of The Economist read it.</FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2>Happy reading.</FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2>Arun</FONT></DIV>
<DIV><FONT face=Arial size=2>[Subbiah Arunachalam]</FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2>----</FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><!--StartFragment --> <FONT onmouseover=HideAll()
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size=2><BR><B><I><FONT face=Arial>The challenge of bottom-up
development</FONT></I></B><BR><BR><FONT face=Arial>In the United States, we
often talk about economic development as a top-down phenomenon. In this model, a
person or a corporation with resources will establish a business enterprise and
hire employees. Later, some of these employees will accumulate enough resources
themselves to start their own businesses; these in turn will create more
employment and greater wealth in the community, and so on.</FONT><BR><BR><FONT
face=Arial>This model may apply to nations like ours. But it is totally
inadequate to meet the current needs of a nation like India, where 70 percent of
the population live in </FONT><A
href="http://www4.nas.edu/NAS/nasgraph1.nsf/Catalog/rural.jpg/$file/rural.jpg"><FONT
face=Arial>rural villages</FONT></A><FONT face=Arial>, with limited
opportunities for education and non-agricultural employment. For other jobs,
they are forced to move to cities and often must live in expanding </FONT><FONT
face=Arial>urban slums</FONT><FONT face=Arial>.</FONT><BR><BR><FONT
face=Arial>Most of the world resembles India, but India has the advantage of
having a strong scientific and technical capacity despite its extensive poverty.
It is also a very large and diverse nation that provides a fertile test bed for
new ideas. If our Academy wants to make a strong contribution to sustainable
development through science and technology, it is in nations like India that we
should search for models, not in nations like ours.</FONT><BR><BR><FONT
face=Arial>Many interesting experiments are in progress around the world, and I
have been attempting to follow some of them to see what can be learned about
effective strategies for attaining the vision elaborated in </FONT><I><FONT
face=Arial>Our Common Journey</FONT></I><FONT face=Arial>. This past January, my
wife Betty and I made our third visit to the villages of </FONT><A
href="http://www4.nas.edu/NAS/nasgraph1.nsf/Catalog/India_cities.jpg/$file/India_cities.jpg"><FONT
face=Arial>Pondicherry, India</FONT></A><FONT face=Arial>, where a
non-governmental organization (NGO) founded by our foreign associate
</FONT><FONT face=Arial>M.S. Swaminathan</FONT><FONT face=Arial> has been deeply
engaged in a variety of science-based experiments in rural development (see
<</FONT><A href="http://www.mssrf.org/"><U><FONT
face=Arial>www.mssrf.org</FONT></U></A><FONT
face=Arial>>).</FONT><BR><BR><FONT face=Arial>On previous trips, we had
visited the </FONT><A
href="http://www4.nas.edu/NAS/nasgraph1.nsf/Catalog/village_computer.jpg/$file/village_computer.jpg"><FONT
face=Arial>information kiosks</FONT></A><FONT face=Arial> in these villages,
which connect the otherwise isolated villagers to a wireless Internet service in
their local language that provides them with daily market prices, and weather,
health, and agriculture information. We had also followed the development of
several science-based enterprises—in which, for example, a small group of
landless villagers produces mushrooms or milk for sale.</FONT><BR><BR><FONT
face=Arial>At the end of each of our earlier visits, Betty and I were left with
the feeling that the problem of both long-term sustainability and scale were
overwhelming. Perhaps this highly dedicated and uniquely skilled NGO could, with
the support of various donors, ultimately affect 20 or 40 villages, with a total
population of 100,000 people. But what would happen when its leadership changed,
or when the current donors decided to move on to other projects? And, most
important, what about the remaining 700 million Indians who live in similar
situations elsewhere? The challenge seemed overwhelming and the whole enterprise
fragile.</FONT><BR><BR><B><I><FONT face=Arial>Bring in the
bankers</FONT></I></B><BR><BR><FONT face=Arial>I was surprised to encounter a
completely new element in our last visit. The </FONT><A
href="http://www4.nas.edu/NAS/nasgraph1.nsf/Catalog/swaminathan_bank.jpg/$file/swaminathan_bank.jpg"><FONT
face=Arial>State Bank of India</FONT></A><FONT face=Arial> is now intimately
involved as a partner with the M.S. Swaminathan Research Foundation in each of
the village projects that we helped to inaugurate. Some of the projects were
</FONT><FONT face=Arial>dairies</FONT><FONT face=Arial>, as before, but other
groups of villagers had set up small production plants for biocontrol
agents.</FONT><BR><BR><A
href="http://www4.nas.edu/NAS/nasgraph1.nsf/Catalog/egg_factory.jpg/$file/egg_factory.jpg"><FONT
face=Arial>In this example</FONT></A><FONT face=Arial>, a group of villagers had
established a factory to produce the small parasitic wasp, </FONT><I><FONT
face=Arial>Trichogramma, </FONT></I><FONT face=Arial>which deposits its eggs on
those of larger insects and destroys them. Some of their product is being used
in their own village to replace pesticides and increase plant yields – thus
bringing both health and economic benefits. The remaining product is being sold
in the market to generate income. And the women involved had begun to train new
groups in neighboring villages. Here was a perfect example of the type of
science-based franchise for sustainable development that I had been
seeking.</FONT><BR><BR><FONT face=Arial>The State Bank funded the equipment and
supplies needed by each of the groups through loans, and it was our privilege to
</FONT><A
href="http://www4.nas.edu/NAS/nasgraph1.nsf/Catalog/bank_distribution.jpg/$file/bank_distribution.jpg"><FONT
face=Arial>hand out the checks</FONT></A><FONT face=Arial>, some for more than
$5,000. The interest rates charged are generally about 20 percent per year,
which is much less than the rates of the traditional moneylenders, who may
demand 10 percent per month or more.</FONT><BR><BR><FONT face=Arial>Is this a
public service activity, subsidized by the government? To my surprise I learned
that the answer is no. These cooperatively held loans are being made to
so-called "Self-Help Groups" – each composed of 10 to 20 villagers who had
learned to work together. They are among the bank's best-performing customers,
with 95 percent of repayments being made on time.</FONT><BR><BR><FONT
face=Arial>Through 700,000 Self-Help Groups, about 70 million people have thus
far been helped with bank credit in India, with an average loan per group of
about $700. About 90 percent of these groups consist only of women. According to
the general manager of the Central Bank of India, these loans are "meant to
deliver women from socioeconomic oppression, and empower them through monetary
security."</FONT><BR><BR><FONT face=Arial>The bottom-up development generated by
loans to cooperative groups of the rural poor is a major movement encouraged by
the Indian government. It is being stimulated, guided, and monitored by India's
</FONT><A href="http://www.nabard.org/"><U><FONT face=Arial>National Bank for
Agriculture and Rural Development</FONT></U></A><FONT face=Arial>, whose Web
site <www.nabard.org> provides guidance on the establishment and
evaluation of </FONT><A
href="http://www4.nas.edu/NAS/nasgraph1.nsf/Catalog/selfhelp.jpg/$file/selfhelp.jpg"><FONT
face=Arial>Self-Help Groups</FONT></A><FONT face=Arial>, as well as many other
informative details. We need only think back to Jimmy Stewart's role as George
Bailey in the 1946 movie </FONT><I><FONT face=Arial>It's a Wonderful
Life</FONT></I><FONT face=Arial> – still a holiday classic – to remind ourselves
of the important role that the credit provided to ordinary Americans by local
banks has had on our own nation's development.</FONT><BR><BR><B><I><FONT
face=Arial>Experiments in Africa</FONT></I></B><BR><BR><FONT face=Arial>As this
example demonstrates, those of us in the United States who have been struggling
to find productive ways to link science to sustainability goals have much to
learn from experiments in other nations. Another foreign associate of our
Academy, Akin Mabogunje, an urban geographer from Nigeria, has played a major
role in creating two other prototype examples.</FONT><BR><BR><FONT face=Arial>As
Dr. Mabogunje recognized, because the low-income workers and craftspeople in
Nigeria have no collateral to offer, they lack access to the credit that they
need to expand their small businesses. This led to his formation of the first
Nigerian "community bank" in 1990, as well as to the establishment of a National
Board for Community Banks that he initially headed. A community bank is a local
institution, where one's honor and social standing in the community are the key
to obtaining a loan. As in the case of the Indian Self-Help Groups, peer
pressure takes the place of collateral in insuring that the loans are repaid.
Today there are nearly a thousand community banks in
Nigeria.</FONT><BR><BR><FONT face=Arial>Through an NGO that Dr. Mabogunje
started, he has recently helped to catalyze an experiment in sustainable
development in the city of Ijebu-Ode. This is a region of about 200,000
inhabitants where 90 percent of the people live below the international poverty
line, earning less than one dollar per day. The experiment began with what we
would call a "knowledge assessment" (see <</FONT><A
href="http://books.nap.edu/catalog/9528.html"><U><FONT
face=Arial>books.nap.edu/catalog/9528.html</FONT></U></A><FONT face=Arial>>).
First a report was prepared listing the prime opportunities for job creation in
Ijebu-Ode, along with the main actors in the socioeconomic life and governance
of the city. This led to an extensive city consultation process involving many
diverse groups. As a main outcome, a set of strategically selected worker
cooperatives were either engaged or formed. Credit was then extended to each of
them for enterprise development.</FONT><BR><BR><FONT face=Arial>Pictured here
are some of the members of a </FONT><A
href="http://www4.nas.edu/NAS/nasgraph1.nsf/Catalog/beekeepers.jpg/$file/beekeepers.jpg"><FONT
face=Arial>beekeepers' cooperative</FONT></A><FONT face=Arial>, along with both
Dr. Mabogunje and Academy member Robert Kates. Some of the other cooperatives
being supported in the city are focused on aquaculture, on women who run local
markets, and on cassava production and processing.</FONT><BR><BR><FONT
face=Arial>Even though no collateral was used to secure these loans, the
experiment appears to be a success. The loans are being repaid, and much useful
economic activity has been stimulated. It therefore would appear that, with
strong preparation and planning, the provision of unsecured credit for
cooperative enterprise development can work on different continents, and in both
urban and rural settings.</FONT><BR></FONT></DIV>
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