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4.Free markets

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Living in Asian Cities, no 1, November 1998

Where we come from:
historical perspective and major trends


Originally published in 1996 as part of the publication "Living in Asian Cities"


Acknowledgement

1. Introduction

2. Building the nationstate and centralization of government
2.1 Impact on local urban government
2.2 Economic and physical development policies and their impact on the poor
3. Disillusion and the rise of socialist approaches to development
3.1 National government intervention in local government
3.2 Public sector intervention in low-income housing
3.2.1 The public works tradition of government-built housing and slum clearance
3.2.2 The organized self-help movement
3.2.3 Sites and services and slum and squatter settlement upgrading
3.3 Emergence of NGOs
3.4 Entrenchment of the informal sector
4. Free markets and the retreat of government
4.1 Influence of international agencies and donors
4.2 Mainstreaming the "enabling" paradigm
4.2.1 The managerial/political case
4.2.2 The social/developmental case
4.2.3 The economic case
4.2.4 Vehicles of support
Chronology of influential events
International
India
Indonesia
Sri Lanka
Viet Nam

Notes

Comments on the paper


4. Free markets and the retreat of government

All of the policies and activities that have been described so far were implemented within a context in which the nation state and centralized government were taken as given. Whether they were capitalist or socialist was in this sense irrelevant. They represented the only available paradigm. However, during the 1980s, the growing supremacy of free market-based capitalism, the beginnings of the global economy, and the failure in many countries of the centralist-socialist paradigm to achieve any marked degree of either social or economic equity, combined to produce a new hybrid that is still being formed. This is the decentralized free market state that first began to emerge in the so-called "informal" or "grey" sectors of national economies all over the world, either as overly regulated and therefore taxed citizens opted out of the formal economy, or those who were already excluded such as the urban poor conducted their own affairs.

Significantly, this emerging global paradigm is identical in nature to the informal sector in urban slums and squatter settlements in Asia that has just been described. Moreover, the initial response of governments anywhere in the world has always been negative. However, sufficient evidence from formal economics in favour of local and even individual initiative was easy to muster in developed countries. As this accumulated and gained acceptance, it combined with social ideals of persuasion and accommodation as opposed to authoritarian command and control that were a relic of the era of disillusion, to produce what is currently called the "enabling" paradigm.

Evidence of this transition has been visible around the world for some time. One can include, for instance, the economic reforms in China led by Deng Xiao Peng, the elections of Ronald Reagan and Margaret Thatcher and the break-up of the Soviet Union. Internationally, lending and monetary agencies like the World Bank (IBRD) and the International Monetary Fund have changed their policies and have forced many governments to tighten belts and remove subsidies, in effect requiring their devolution as preconditions for further economic assistance.

The rise of free, deregulated markets as the orthodoxy in development has also led to a rethinking of the role of the individual and the government in society. Whereas formerly the government was regarded as the leader, provider and sustainer, essentially the patriarch of society, the new roles assigned to it are primarily those of a facilitator and enabler, essentially a benevolent uncle who does not have the responsibility to provide or sustain. But although its leadership role has been battered, it still remains. Thus, a transformed government is supposed to foster a regeneration in society of individual freedoms and responsibilities. In this view, the individual or groups of individuals and private sector firms are responsible for their own well-being, with the government creating an environment that enables them to be so.

In this region, this view is reinforced by critical reviews of government economic and social policies which have confirmed the inability of governments to meet the development challenge alone. The success of projects like the Orangi Pilot Project, Grameen Bank and SEWA seem to indicate that the poor could provide for their own needs through their own resources without government assistance and in spite of the constraints imposed by unsuitable government regulations and policies.

Another aspect of the new paradigm is that, in contrast to spectacular government failures in meeting the needs of the poor, a growing realization has emerged, even among government officials and politicians, that community participation is essential to poverty alleviation. In certain countries, participatory programmes such as the Kampung Improvement Programme in Indonesia, the land-sharing approach in Thailand and the Million Houses Programme in Sri Lanka showed the advantages of participatory approaches even in government-initiated programmes.

In this view, governments which had failed to deliver are supposed to withdraw from the economic and social responsibilities they had assumed; private sector firms which had long endured government regulations have increasingly become subject to market forces; and the NGO sector which had long been mistrusted by government and had responded in kind are finding a much fuller role. As these organizations are given trusted places in society, there is a growing realization among them that partnerships with governments are required if their successes are to be multiplied and diffused.

The end of the cold war is another instance of the same process and has contributed considerably to the democratization of governments in Asia and the Pacific. In the new orthodoxy of deregulation and free market reforms, democratization and individual freedoms are to play a vital role in freeing the creative energies of society. Yet another impact of the market-oriented economic orthodoxy is greater attention to institutional issues, particularly the efficient management of urban areas, where much of the industrial and commercial activity takes place.

4.1 Influence of international agencies and donors

Within this still fluid context, the changes in approach to the provision and management of urban land and infrastructure in the region, which is also strongly reflected in approaches to the production of housing that is discussed in greater detail below, were strongly influenced by international pressure. This was clearly dominated by the IBRD and to a lesser extent the Asian Development Bank (ADB), whose urban lending policies by and large paralleled those of the global bank. At a different level and with very different goals, the UNICEF urban basic services programme has also had considerable impact. The bilateral agencies have played an important role, though their style of operation has tended to be more that of supporting recipient government policies within the framework of the donor governments' aid priorities than in setting out to shape them.

Changes in IBRD policy since its first urban interventions in the mid-1970s may be characterized by a progression of preoccupations, starting with sectoral projects that were based on the provision of "basic needs" such as shelter and transport. Examples include the Indonesian and Philippines series of urban development projects and the Thailand sites and services projects. This was followed by "integrated urban projects" that set out to promote greater efficiency and equity in the provision and distribution of basic needs. For instance, the Madras urban development projects that, in addition to financing the vast sites and services and slum improvement projects in the city, also lent for the purchase of buses; the construction of terminals and depots; industrial parks for small-scale and cottage industries; and the rehabilitation of trunk water and sanitation systems. The third leg in this progression was the extension of the multi-sectoral approach of integrated urban projects beyond the confines of individual cities to regional development studies and projects such as that undertaken for the Guangju region of the Republic of Korea.

Studies such as this led to a series of national urban development policy and strategy studies such as those undertaken for Pakistan (1983), Indonesia (1985), Malaysia (1986) and Thailand (1991), which focused not only upon the need for infrastructure investment, but more upon fiscal and other national and local resource management measures that could steer and stimulate private sector investment in urban development.

Thus, by the late 1980s, emphasis had moved strongly away from the funding of basic needs infrastructure projects and on to the wider issues of effective urban management, the stimulation of urban economic development and structural adjustment. This appeared to be a return to the 1960s' faith in "trickle-down". However, the difference with 30 years ago is that there is now a better, though far from perfect, understanding of how urban economies work. This includes the relationship between formal and informal networks; the areas where public intervention is required such as in the land and finance markets for low-income housing and enterprise development; the areas where it is not effective such as in the management of local-level construction and the delivery of some urban services; what social safety nets exist and where welfare support is needed; and so on. There is also a better understanding of the importance of good governance, accountability and transparency of local democratic processes, both at the level of traditional local government and within neighbourhoods and communities.

For its part, the UNICEF Urban Basic Services (UBS) programme has made an extremely important and seemingly sustainable impact at the level of neighbourhoods and communities. It has stayed with the "basic needs" concept of local development that it entered through its concern for the plight of children and their mothers in the growing slums and shanties of the developing countries. To this it has added the essential importance not only of the participation of women, but of democratic community-level control of the decision-making processes in local development. It also worked with and through established local government structures.

UBS identifies basic needs as environmental health (safe water and waste disposal); access to primary health care; basic literacy and access to educational opportunities for both women and children; access to family planning; and access to income-earning opportunities. By implication and in practice, this range of concerns embraced the improvement of housing and urban infrastructure and services for low-income communities at large.

In this way, the UBS programmes provided the foundation and entry point for other important initiatives. For instance, the British Government's sustained slum improvement programme in India, which over the last 10 years has granted some US$150 million in five major cities, was built upon the UNICEF UBS programme in Hyderabad that started in 1981. The Sri Lanka Million Houses Programme both used and helped to develop the UNICEF UBS community-based managerial infrastructure to the mutual and coordinated benefit of both programmes. Thus, UNICEF, through UBS, has perhaps more than any other international agency provided the practical basis and intellectual stimulation for the new approaches to public sector support to urban housing production by the lowest income groups.

4.2 Mainstreaming the "enabling" paradigm

Before examining the implications of implementing a support-based "enabling" strategy for housing, it is important to clarify the arguments and principles that underlie the approach. These have clearly grown out of the sequence of experiences described above but they also borrow from and are part of the wider debates around "good government" and transparency, as well as deregulation, decentralization and the devolution of responsibility and authority. They are directly associated with programmes that seek greater efficiency and effectiveness in the use of resources through the structural adjustment of government administration. And they build upon both the intellectual and the professional understanding of the mechanisms by which urban low-income households and communities house themselves that was outlined in the preceding section.

The case for the devolution of authority in the production and management of housing to its users, and the provision of appropriate supports that will enable them to exercise that authority effectively, is made through three lines of argument. These are: a) the managerial and political case; b) the social and developmental case; and c) the economic case. Each is outlined below.

4.2.1 The managerial/political case

This may be summarized by the dictum "if you can't beat them, join them". That is, there is no way that a developing country government can provide adequate subsidized housing for all those families which, through poverty, cannot gain access to the formal private sector housing market. It has been amply demonstrated over the last 30 years that, with the exception of Hong Kong and Singapore, both of which "graduated" from developing country status in the 1970s, no third world government has the financial, professional or technical resources to take on such a task. It is therefore politically imprudent for governments to continue to proclaim plans to provide housing for the lower income groups. At best, such declarations of intent can only be regarded as a gesture that meets the needs of a fraction of the target group. At worst, they are seen as arbitrary programmes for the benefit of a selection of the politically favoured, as was the case with the Sri Lankan Electoral Housing Programme of 1978-1982, the PPP housing programme in Pakistan and BLISS in the Philippines in the 1980s.

However, governments cannot afford to abandon the poor who constitute the largest section of their constituents and a potential, if not actual, body of political support. Therefore, alternative strategies must be devised that have a high enough profile to be politically exploitable as well as being sufficiently effective and sustainable to attract international recognition and aid. An "enabling" strategy for housing that provides responsive and appropriate supports to the hitherto unaided energies and efforts of low-income households and communities provides such a vehicle. This has been demonstrated by, for example, the United National Party administration's second housing policy in Sri Lanka (the Million Houses Programme).

In summary, by promoting and participating in the private and informal settlement process, instead of making futile attempts to control it, governments use the limited resources available to them for the benefit of many more people. In doing so, the settlement processes that are already in progress and cannot be stopped become much more efficient and effective as does government influence over them.

4.2.2 The social/developmental case

The thrust of this argument can be summarized in a progression of six observations:

  • The production and management of housing is a developmental process through which individuals, families and communities can express their identities and advance their status and security.
  • Because of the extent to which the housing of an urban family is dependent upon the decisions and actions of its neighbours (for instance, in securing <$&no. 1>boundaries and access ways), it is a collective process.
  • With appropriate managerial support, collective action can be converted into a process of community decision-making and responsibility for the wider issues of the planning and maintenance of residential areas.
  • This process becomes a sustainable catalyst for the introduction of other aspects and programmes of community development such as health, education, enterprise development and income generation.
  • With well supported leadership, responsible communities can thus take on many of the functions traditionally assigned to, but rarely exercised by, local government such as the administration of development controls, maintenance of public utilities and the collection of user charges and mortgage repayments.
  • Stable autonomous communities are the starting-point for transforming slums and shanties into recognized urban neighbourhoods that do not represent a social or environmental threat to the city, and that no longer consume disproportionate welfare resources. Indeed, they may eventually contribute to revenue through taxes and service charges.

The basis of this set of observations is that the production and management of housing and the maintenance of the domestic environment is a social process. Therefore, to the extent that it is neither static nor confined by tradition, it is a development activity. As has already been mentioned, the process of housing as a set of activities has become eclipsed in the public domain by the production of houses as purely physical objects. And whilst it cannot be denied that it is difficult to make a home without a house, four walls and a roof do not necessarily make a home. The difference between mere shelter and a home, or a housing estate and a neighbourhood, is to a great extent determined by the degree of involvement, responsibility and control that occupants and users have over their immediate surroundings.

In all examples of successful community-based housing and local environmental development projects, women play a pivotal role that is invariably of greater significance than that of men. Women have a greater stake in the quality of the domestic environment than men. Not only are they traditionally responsible for the maintenance and management of the home and the children that they wean and bring up, but also, in low-income communities, they have a major responsibility that is often the only one for household income. In the absence of alternative care for children, incomes have to be earned in or close to the dwellings. Therefore, with careful gender planning, support-based "enabling" programmes for housing can be used as vehicles for the greater integration of women in the economic and managerial structure of low-income communities, even in societies that traditionally discriminate against the participation of women in public and economic activities.

Indeed, the introduction and acceptance of such radical changes as local decision-making in environmental management and development, open many urban low-income communities to other social and cultural changes. The opportunity to exploit this for the social and economic development of the city as a whole is at the heart of "enabling".

4.2.3 The economic case

The economic argument for devolution of responsibility in the production, maintenance and management of housing rests in nothing more mysterious than the basic principles of economic efficiency in the match between supply and demand. The closer the relationship between the producer and consumer of housing, the more efficient will be its production and the more effective its product.

Underlying the economic argument for "enablement" is the perception that it is unreasonable to presume that all low-income households, struggling to make a living on insecure and often wildly fluctuating incomes, have identical priorities for investment in housing. Even the most cursory observation in autonomous low-income settlements reveals that house building is a continuous stop-start process that may go on for many years, even decades. The construction, extension and improvement of dwellings not only reflects changes in household size and composition but also in family fortunes. For most low-income households, building happens sporadically and often only after long inactive periods during which materials and savings have been accumulated in preparation for the construction of the next room. People only improve their houses when business is good or a run of sustained employment produces a surplus of income over the cost of food and other essentials. Only households themselves can rank expenditure on housing over the other calls on their scarce resources. Only householders can decide upon the quality of construction or level of servicing for which they are prepared to pay.

The discussion of the previous paragraph argues that decisions concerning the design, construction and management of a dwelling can only be effective if they are made by the household itself. In this instance, the household becomes the most effective level of decision-making. Where such decisions are made by a national or municipal housing authority, as is often the case, they must, by the logic of the argument, be ineffective. They are made at too great a distance to be economically efficient. By the same token, the most effective point at which to make decisions concerning the character, extent and management of neighbourhood facilities and amenities is the user community itself. The most effective level of decision-making may thus be defined as the smallest social, administrative or political group (household, neighbourhood community, ward, municipality) that can economically support or claim the exclusive use of a good or service.

It must be stressed that this concept relates to authority and control over resources and actions. It does not mean that those at the most effective level of decision-making are necessarily the most effective in implementing those decisions. Thus, it does not mean that houses must be built by their occupants using their own labour. It does mean, however, that the occupants have authority over whoever does so on their behalf. Similarly, it does not mean that community facilities must be maintained using voluntary community labour. But it does mean that the management, including financial management, of neighbourhood assets is most effective when it rests with the users.

However, while recognizing the intellectual logic of devolution of decision-making to the most effective level, it must also be recognized that few low-income households, community groups and small local authorities have the capacity responsibly to take such decisions. They rarely have either the technical knowledge to evaluate the costs and benefits of alternatives, or the managerial skills and experience to implement them. Hence the need for a system of "enabling" that ensures that the most effective level can capitalize on its inherent advantage through access to adequate information and skills

4.2.4 Vehicles of support

In understanding the nature of enablement and who needs support and who should provide it, it is important to recognize a three-part model of the actors involved in the production, maintenance and management of housing. The three parts are the public sector, private sector, and community sector. The last of these, also often referred to as the popular sector, voluntary sector or third sector, has only recently been widely accepted as distinct from the private (commercial) sector. Indeed, it is still sometimes referred to as only a subcategory (not for profit) of the private sector in the usual twofold public/private sector model of the economy and administration. However, the motivations and styles of operation of the private commercial sector and the community sector are fundamentally different, as are their support requirements and their abilities to provide it.

In addition to distinguishing between the three sectors, it is also important to recognize their subdivisions into:

  • the public sector: central government and local government;
  • the private sector: formal sector and informal sector;
  • the community sector: non-governmental organizations and community-based organizations.

The characteristics and capacities of each of these subsectors in relation to their needs for support in the production, maintenance and management of housing and their ability to provide it obviously vary from country to country. Nevertheless, it is still useful to offer a few generalities about them to develop a better understanding of the limits and potentials for change in their roles.

The public sector operates through processes of legal regulation and administrative allocation. By tradition, it does not compete commercially with the private sector, though it may manage monopolistic enterprises for the supply of services.

Central government, which here includes subnational state or regional administrations in large federal countries such as India and China, embraces central ministries and departments, public corporations and parastatal enterprises, and a variety of special purpose agencies and regulatory bodies. It is potentially the principal vehicle to provide "enabling" support to actors in all the other subsectors. Its legislative and regulatory powers give it unique control over what John Turner has termed the elements of housing, namely access to democratic legislation; trunk infrastructure; land and finance markets; and, to some extent, the distribution of professional and technical resources.

Local, district and municipal government generally has similar constitutional powers within its area of jurisdiction. It can raise revenue locally, generally through property taxes and/or trading licences. Its principal responsibilities are the maintenance and distribution of local infrastructure and the administration of centrally supplied services. Through these mechanisms, local government is also a vehicle for the provision of support to lower levels of authority in the housing production process. However, in many parts of the region, local governments do not have the capacity to discharge their current functions, let alone to adjust to a new role of "enabling" others. As pointed out earlier, because local authorities have not been able to keep pace with the increased demands made upon them, they have in many countries been abandoned and allowed to deteriorate to the extent that they themselves need "enabling" support, not only from central government but also from the private sector through such processes as deregulation and administrative structural adjustment.

This aspect is of crucial importance to the smooth, effective functioning of Asian cities. The defeat and retreat of national governments and the ascendancy of market economies and participatory approaches have also resulted in rethinking the role of local governments, which should be more aware and responsive to the needs and aspirations of citizens if they are to tap into community resources. Consequently, they need to be strengthened and given more executive and financial power. In India, Nepal, the Philippines and Sri Lanka, the government has passed either laws or constitutional amendments that provide local governments with greater autonomy and power. However, even in these countries, developing the capacities of local governments to manage cities effectively has not been undertaken. Their staff are still being trained in conventional methodologies and are consequently unable to understand or undertake policies which seek to empower the urban poor. While devolution of power to the local level and strengthening of local governments is often discussed, it has yet to materialize in most countries of the region.

The private sector has a single overriding characteristic, namely profit. Private enterprise will only enter the housing market if it perceives it to provide a higher return or/and a lower risk than alternative investments. Thus, crudely, the only supports that can attract greater private sector investment in low-income housing are financial guarantees.

The formal private sector embraces recognized, registered and taxpaying enterprises ranging from large transnational corporations and investment banks to small developers, building firms and service companies. There are a variety of financial, legislative and managerial supports and incentives that can make the building materials and housing production processes attractive to smaller enterprises in particular. Alternative approaches to the establishment and management of mortgage banks and the setting up of formal guarantee funds provide examples of the sorts of support that enable the banking sector to reach further down the scale into the low-income housing market. "Enabling" legislation that allows and encourages partnerships between private companies and public sector agencies for the delivery of services and the management and maintenance of infrastructure is another example of the sorts of support that can improve both the extent and effectiveness of the private sector in areas that are traditionally the responsibility of local government.

Informal sector enterprises operate with the same profit motives as those described above except that the informal sector, by definition, is not registered, taxpaying and regulated. This enables informal businesses to operate with considerably lower overheads and much greater flexibility than is possible for their regulated formal sector counterparts. Thus, in many countries they play an important role in all sections of the economy including the production and maintenance of housing and domestic infrastructure and services. Informal sector enterprises are often able to reach considerably lower down the income scale of the housing market than are registered, regulated companies, despite being characterized by a very low level of managerial efficiency, under capitalization, low levels of technical competence and virtually no quality control. Thus, appropriate training and managerial and capital assistance can have a substantial impact. However, it is often difficult for Governments and international NGOs to provide such support to businesses which are officially illegal. To legalize them would bring them into the formal sector, thereby forfeiting the advantages that made them effective in the first place.

The community sector operates on criteria of voluntary association, sharing costs and benefits within self-defined collective interest groups. They have a great capacity for mobilizing enthusiasm and creativity and can thus operate with lower overheads and more accurately targeted programmes than can the public sector, and at lower cost than the profit-seeking private sector.

Non-governmental organizations here fall into two distinct categories: international NGOs and local NGOs. The first embraces a range from the big international relief organizations with multimillion dollar budgets to smaller first world NGOs dedicated to raising funds for individual households and community groups. Many have direct links to local NGOs or "field" branches of their own organizations through which they channel funds and monitor their use. Local NGOs differ from international NGOs in that they are involved as pressure groups and research and advisory bodies that directly support community-based organizations and individual households. As their name suggests, they generally operate at a national or local level. However, international federations of NGOs such as Habitat International Coalition which operates globally, and the Asian Coalition for Housing Rights, which operates continentally, belong more to this category than to that of the international NGOs which are characterized principally as funding bodies. Both categories of NGOs are net providers of support rather than receivers. The majority of their support goes to, or through, community- based groups.

Community-based organizations are the smallest and most local of groupings above that of the household. Where they exist, they directly represent the users of public space, services and amenities at the level of the neighbourhood. They are net receivers of "enabling" support.

The arguments presented in the preceding paragraphs for the withdrawal of government from the design and construction of dwellings do not imply the abandonment of all government responsibility for low-income housing. Indeed, the reverse is the case. The support role of government in an "enabling" shelter strategy is often considerably more complex and exacting than when building houses, providing serviced sites or improving infrastructure in slums and squatter settlements. It requires fundamental and innovative changes in approach in four broad categories of support for the production, maintenance and management of low-income housing. These are:

  • suitable and affordable land;
  • affordable and manageable finance;
  • environmentally sound infrastructure and sustainable services;
  • technical and managerial assistance.

An examination of this new role, including the processes by which support can be provided, how and by whom, in the papers that follow which draw upon the wealth of experience that exists in the region and upon the ideas and hopes of many thinker-activists. They examine the roles, both actual and potential, of the international, public, private and community sectors and argue the case for a much more open, equitable, decentralized approach that has been built up by the experiences outlined in the preceding pages. They also draw attention to the actual and potential obstacles and constraints to improving the processes of living in Asian cities.

It would be inappropriate, however, to close this paper without drawing attention to the possible downside of the current transition to the emerging paradigm of decentralized enabling government. Because its driving force is precisely informal sector activity that has extrapolated itself into formal free markets, and because this loosening of controls over the formal private sector is occurring at the same time as globalization of the economy, national governments are increasingly losing control over their economies and legislation. This is particularly so in relation to trade, labour and finance but the new freedoms, if that is what they are, are now ramifying into other areas of society as well such that developing country governments are now under increasing pressure to bring their social and even environmental norms into conformity with internationally acceptable standards. For example, pressure is already being applied to some countries to strengthen the enforcement of laws against child and prison labour. But this is happening not primarily out of concern for their well-being, but because goods manufactured by such labour are much cheaper and consequently more competitive.

These developments are, somewhat ironically considering their origin, potentially ominous for the urban poor of this region. For example, the money markets of New York, Tokyo and London now impact on all economies, including those of developing countries. Thus, with global integration, recessions in the world's major markets such as the United States, Europe and Japan could have a greater impact on the economies of the developing countries. These same trends also mean that while more people are investing in their economies, they have delegated their control over their investments to a small number of fund managers, who today may even be based in other countries. Deregulation would force hitherto protected industries to compete with multinationals, which have far greater technological and financial capacities to undercut local competitors in order to gain a greater share of a national market. The analogy could be the disappearance of neighbourhood grocery stores with the advent of suburban supermarkets. This in at least the short to medium term, would result in considerable dislocations in local labour markets. In China, for example, conservative estimates suggest that at least ten per cent of the state sector workforce, 400,000 people, would have to be laid off in order to make loss- making enterprises profitable again.

Coupled with this transformation is the advent of the information age. While it has the potential to considerably enrich those who have access to it, it also threatens to marginalize those who do not. On the positive side, it may also be one of the most powerful forces for democracy.

Another risk with the loss of power of the nation state is that ethnic and communal animosities will become stronger and will lead to violence. This has already happened among the republics of the former Soviet Union, as well as in Pakistan and India, where with the assassination of Rajiv Gandhi and the loss of a central focus, communal and ethnic violence is on the increase. Thus, people-based development may also lead, again ironically, to increasing social intolerance and intolerance towards the views and rights of the minority.

Whatever lies ahead, the lessons of the past 30 years show that this brave new world must include a rethinking of development strategies for the poor. These strategies must be based and build upon prevailing indigenous processes and cultures in their respective countries. Thus, local, rather than Eurocentric, solutions must be found to cope with and exploit the opportunities provided by the changing global environment. The following papers contribute towards this goal.

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