2004 proutist universal 1 proutist economic development decentralised economic planning dr. michael...
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2004 Proutist Universal 1
Proutist Economic Development
Decentralised Economic Planning
Dr. Michael Towsey
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Dr. Michael Towsey Proutist Universal 2
Decentralised planning
1. Decentralised economy requires decentralised planning.
2. Planning starts from bottom up.
3. The block is the smallest unit of Proutist economic planning.
4. First step: identify blocks, natural economic communities consisting of 100,000 to 250,000 people.
5. Block > District > NationGuarenas > Miranda > Venezuela
6. There should be provision in constitutions, such as the Venezuelan constitution, for the importance of block level planning.
7. Trickle up development vs trickle down.
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Dr. Michael Towsey Proutist Universal 3
Trickle down development
The theory goes:
• Increase the income of the rich who know how to create wealth.
• The wealthy will invest their extra accumulated income as capital to generate more wealth.
• This creates jobs and more demand.
• Prosperity trickles down to the poorer people.
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Dr. Michael Towsey Proutist Universal 4
Trickle down ?
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Dr. Michael Towsey Proutist Universal 5
Traditional socialist planning
• Intention was to distribute wealth more equitably.
• BUT emphasis was on large scale projects and centralised planning.
• Centralised planning has never benefited people away from the centre or at the periphery.
• Eg Soviet development under Stalin was built on slave labour in prison camps.
• Communism is economic centralisation - in the hands of a few.
• Capitalism is also economic centralisation - in the hands of a few.
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Dr. Michael Towsey Proutist Universal 6
Trickle up development
• Block level planning.
• Maximise production by decentralising production.
• Decentralise to point consistent with economic efficiency and collective welfare.
• Adjust block level plans to coordinate with district and national plans.
• Each block has its own developmental plan, adjusting with overall plan of the socio-economic unit at various levels.
• Planning should be of ascending order - starting at the block level to district to national - to include all the levels of a socio-economic unit.
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Dr. Michael Towsey Proutist Universal 7
Block-level planning boards
• Amount of natural and human resources varies from block to block.
• Separate economic plans have to be made for each and every block by a block-level planning board.
• Prepares a plan for development of the block and implements local developmental programmes.
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Dr. Michael Towsey Proutist Universal 8
Organizing blocks
• Blocks must not be demarcated on basis of political considerations.
• Blocks should be scientifically and systematically demarcated as the basis for efficient decentralized economic planning.
• Block divisions to be organized according to such factors as:
– physical features of the area (including topography, river valleys, nature of the soil, type of flora and fauna, varying climatic conditions, etc);
– socio-economic requirements and problems of the people;
– people’s physico-psychic aspirations.
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Dr. Michael Towsey Proutist Universal 9
Intra- and inter- block planning
• Each block should be made economically sound so that the entire socio-economic unit will be self-sufficient.
• This enables a country or federation to become economically strong and developed in the real sense.
• Planning prepared for the all-round growth of a single block exclusively = "intra-block planning".
• Cooperation among blocks is necessary.
• Planning among blocks = "inter-block planning".
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Dr. Michael Towsey Proutist Universal 10
Inter-block planning
• Inter-block planning is an economic venture into some selected fields to organize and harmonize socio-economic development in a few adjoining blocks through mutual coordination and cooperation.
• Deals with problems that traverse block boundaries and cannot be tackled or solved by one block alone.
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Dr. Michael Towsey Proutist Universal 11
Inter-block examples
• Examples include: – flood control, river valley projects, afforestation projects, soil
erosion, environmental impact of development;– establishment of key industries, water supply, power
generation, communication systems;– establishment of an organized market system;– higher educational institutions;– etc.
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Dr. Michael Towsey Proutist Universal 12
General advantages of block level planning
• Easier to identify and understand problems of a local area.
• Fewer conflicts of interest.
• Local leadership solves problems according to local priorities.
• Planning will be more practical and effective - to give quick, positive results.
• Easier and faster to respond to new situations.
• Base for a balanced economy can be established.
• Can easily identify leakage of capital.
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Dr. Michael Towsey Proutist Universal 13
Local advantages of block level planning
• Local socio-cultural bodies play an active role in mobilizing human and material resources.
• Development of local industries provides immediate economic benefits.
• Growth of local industries creates greater opportunities for people’s all-round advancement, because all their basic needs are met.
• Local industries are the only way to provide local social security.
• Purchasing capacity of local people will be enhanced.
• Unemployment solved more easily.
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Dr. Michael Towsey Proutist Universal 14
Short and long term planning
• Short term plan:– Focus: Labour intensive industry.
• Long term plan:– Focus: Establish capital intensive industry.
• Goals:– Guarantee minimum requirements of the local people;– Eliminate unemployment;– Increase purchasing capacity; and – Make socio-economic units self-sufficient.
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Dr. Michael Towsey Proutist Universal 15
Factors of planning
• When planning (eg an industry), consider four factors:
– Collective necessity – i.e. is there a local demand?
– Full costing of inputs – including externalities.
– Productivity – efficiency and local availability:
• build processing factories where raw materials are.
– Purchasing power:
• distribute sufficient purchasing capacity;
• real income vs nominal income;
• no leakage of capital.
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Dr. Michael Towsey Proutist Universal 16
Community development
• Identify community needs.
• Always start from strength ... ... ...
• A successful project requires good governance.
• Good governance requires continued training and education:– Need to understand concept of conflict of interests.– Accountability to fight corruption.
• No outsiders on local boards: – Especially no money donors, central government officials &
project contractors.