National workshop on investment opportunities and challenges in backward districts

12 Mar 2008

Creating new sources of livelihoods

Companies and communities in partnership

This project is creating alternative sources of income for women in coastal communities affected by the Tsunami in the district of Nagapattinam (India). The women are organized into self-help groups and will share the ownership of a small garment manufacturing unit, which will look for partnerships with established manufacturers in the state. From this pilot intervention the project will derive lessons and policy recommendations on corporate-community partnerships and on livelihood reconstruction after natural disasters.

Latest: Investment opportunities in Nagapattinam District
This report prepared by a consultant was discussed at the workshop held on 12 March 2008 . The report discusses potentials and constraints of the district and describes specific opportunities presented at the event, such as bio-mass power plants, rural BPOs, seaweed farming or production of concrete blocks.

Project Background:

The benefits of economic development and industrialization are distributed unevenly within countries. While economic growth generates new opportunities in certain places, other areas remain dependent on traditional economic activities with low productivity. It is difficult to attract private investment to areas that are remote, lack infrastructure or human capital or have been hit by natural disaster or conflict.

Even if investments take place local communities may not be able to benefit, and could even be harmed if land and natural resources are taken away without adequate compensation. Relations between private companies and the communities where they operate are often difficult and may result in conflicts.

In these situations new arrangements are needed to ensure that the benefits of new economic activities are distributed fairly. Business partnerships between communities and private companies, in which NGOs and Government agencies act as facilitators, could be one of these solutions.

Project implementation:

The project will build capacities of the national governments, local governments and NGOs in forming public-private partnerships (PPP) to support livelihoods of vulnerable communities.

The project will achieve this goal through the implementation of a pilot project in India, the documentation of the experience and the dissemination of the lessons learned. The pilot project is being implemented in partnership with the local NGO Development Promotion Group (DPG).

The intervention focuses in the district of Nagapattinam, in the state of Tamil Nadu, India. This was one of the worst affected areas by the Tsunami of 26 December 2004. Over 6,000 people died and almost 200,000 were evacuated in this district, from a total population of 1.5 million.

This project will foster a partnership between one community and a private company to develop a business opportunity in which both parties can benefit. Three specific opportunities were identified in a study conducted by an independent consultant: garment manufacturing, jatropha cultivation for bio-diesel and dried-fish production.

After extensive consultations with communities, private companies and other stakeholders, garment manufacturing was selected as the most promising business opportunity. On 13 April 2007 the project inaugurated a training unit in the village of Velankani. It is equipped with 25 sewing machines and has trained 50 selected women from nearby communities affected by the Tsunami.

From August 2007, the unit has started producing of garments for the local market and generating income for 25 women. During 2008 the unit will expand with the acquisition of new machines and a larger venue. Production will be upgraded in quality and agreements with established manufacturers will be sought.

The workers have been organized into self-help groups. The project is building their capacity to take part of the responsibility in managing the unit.

The process and its results will be documented, and the findings will be disseminated by ESCAP in collaboration with other international agencies, the Government of India and private sector associations who show an interest in the practice.