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Decentralized Industrialization
Hardoy and Satterthwaite (1986) have questioned whether recent trends in urbanization are a useful pointer to the urban future or a sign that the urban age, on the contrary, is coming to an end. Is it possible to conceive of development without urbanization?
A common model for urban change is as unlikely as a common model for economic change. This underlines the need to assess different urbanization patterns using such concepts as core/periphery relations, generative and parasitic urbanism, opposition between rural and urban lifestyles, and the urban bias.
Policy-oriented studies are also needed to develop industrialization and urbanization patterns best suited to the specific conditions of each country or region. A careful evaluation of the different development patterns that occurred in Italy, for example, might be of considerable use to third world planners. The debate on the urban bias (Lipton 1977) has often been carried on in too general terms. Instead, we need accurate studies on the flow of resources from countryside to cities (and within cities) and an assessment of the extent to which these flows overtax rural environments. This subject is very pertinent for countries like India and China.
Brazil and several other third world countries still blessed with an extensive economic frontier have the possibility of slowing down the urbanization process by properly choosing rural development strategies for frontier areas.
Third world countries are thus confronted by the twin problems of new rural-urban configurations and greater urban self-reliance. The former is predicated on egalitarian land tenure patterns and a symbiotic relation between a prosperous countryside and the small towns capable of servicing it. The latter implies community-based, need-oriented, and resource-conserving urban management styles, made possible by urban reforms giving fairer access to land and resources to low-income residents.
An even greater involvement of the state is necessary to implement development strategies based on the kind of IFES described above. Insofar as self-reliance means initiatives taken locally, it calls for a new paradigm of public policies empowering people to act and to take advantage of the diversity of ecological and cultural settings instead of supplying uniform, ready-made "solutions". Experimentation under real-life conditions should be encouraged both with respect to technologies and to the forms of organization of human endeavour.
Decentralized industrialization offers many advantages but the mistake of taking agriculture for a "bargain sector" (Chakravarty 1987) must not be repeated. Nor is it feasible to rely exclusively on market forces, even though integrated systems and agro-industries offer excellent opportunities for innovative private entrepreneurship.
To summarize, the prospect of rural industrialization with special reference to the application of biotechnology to biomass offers a convenient entry point into several important development strategy concerns:
How, then, can one conciliate the just distribution of employment and revenue with technical progress that eliminates jobs? How can one avoid in such cases the fragmentization of society and the phenomenon of marginalization? If industrialized countries have problems in developing constructive responses to these questions (and in investigating new cultural models), the situation of third world countries is even more compromised by demographic pressures, the backlog of unemployment, and the many external and internal constraints that inhibit the acceleration of growth.
Producing while Conserving
In countries rich in land and other resources, there is a considerable temptation to promote extensive growth based on the predatory incorporation of nature's capital in the current account. But this is done at the expense of long-term natural resource management.
With all too many third world countries, Brazil shares a schizophrenic tradition in this respect: there is rhetorical glorification of nature on the one hand, but its complete ransacking on the other, including the massive deforestation that is taking place today.
Deforestation is far from being the only ecological cost of uncontrolled growth. The industrial cesspool of Cubatao is another vivid manifestation of such problems. Rather than trying to list all of these "wastes of progress", let us try to determine the basic causes.
If left to their own devices, companies have a tendency to internalize their profits and externalize their costs, whether they be economic, social, or ecological. As Furtado (1988) pointed out, the unquantified costs of corporate decision-makers are particularly high in countries where capitalism has developed only recently. The heterogeneous social structure and the enormous built-in labour surplus favours a marked gap between micro- and macroeconomic productivity criteria (or more fittingly, micro-economic and macro-social).
This gap is the result of market forces. The negative social consequences need to be corrected by regulatory action of the political system. Such measures are ail the more urgent given the fact that the debt crisis encourages the over-exploitation of soils and other natural resources, favouring more than ever immediate short-term interests over long-term ones.
The internalization of ecological costs in the pricing system poses major problems and, in any case, would not be enough in itself. Environmental factors must be considered through a host of administrative measures and also through a redefinition of planning methods. A narrow path must be woven between uncontrolled economics and unabashed environmentalism.
The management of development implies an appropriate consideration of the means as much as the ends, of the ways as much as the rhythms of economic growth. It is the antithesis of the three-tiered reductionism that reduces development to economics, economics to growth, and growth to "productive" investments.
Rather than concentrating on rapid growth, which could even result in impoverishing a large part of the population, it would be better to develop at a lower social and economic cost. This is possible if existing production methods are better managed and better maintained, and if the omnipresent waste is reduced by recycling and making better use of resources. In other words, by combining the frugality of rural societies with modern scientific and technical knowledge.
This implies a development process that incorporates a holistic and horizontal vision of socio-ecosystems where the keyword is complementarily. It substitutes for the vertical and sectoral organization of the economy based on an increasingly narrow specialization. The systematic aspect merits attention. The natural ecosystem constitutes a paradigm that needs to be imitated by production systems designed accordingly.
For an Acceptable Adjustment
The debate on structural adjustment, imposed on indebted third world countries by international financial organizations, has bogged down with both sides refusing to move. More than 100 debt management plans have been proposed but none of them have been acceptable to both parties. The banks refuse to assume part of the substantial adjustment cost even though they made substantial profits from high interest charges with loans at variable rates. As for the debtor countries, they cannot pay the costs by themselves, especially in view of the fact that the debt crisis coincides with the fall of raw material prices, the deterioration of exchange rates, and the continuing refusal of industrialized countries to dismantle the trade barriers that prevent third world products from flooding their markets.
The calls in favour of a more "humane" adjustment, proposed by UNICEF, are certainly inspired by a legitimate concern. But this is hardly feasible as long as the hard core of adjustment policies consists of a reduction of public sector expenditures and the application of a set of conventional measures or orthodox financing which results in a lowering of production, consumption, and purchasing power. Employment suffers because of cuts involving investments whereas social conditions deteriorate if, on the contrary, the reductions affect first of all social programmes - subsidized housing, health, food, and education. The basic burden of readjustment falls upon those least able to bear it.
Between 1979 and 1983, expenditures on education in Latin America declined by 65 per cent, those on health in Africa by 56 per cent. On both continents, budgets allocated for housing, infrastructure, and urban transportation were cut by more than half. In citing such data, a recent World Bank publication' acknowledges that long-term growth, which is supposed to result from adjustment policies, will not by itself be able to eliminate absolute poverty and that it is, in addition, necessary to protect the poorer classes during the readjustment periods. At the conceptual level, this is a step in the right direction. But the most important steps remain to be taken: identifying the measures needed and testing their feasibility and efficiency.
Is it possible to re-establish the macro-economic balance without sacrificing too much economic growth? An input of additional resources would enable this, but as we have already seen, capital flows are defying good sense by flowing from the South to the North and nothing indicates a quick turnaround of the situation. That is why, in addition to the mobilization of additional resources, there is the need to use existing resources more efficiently by identifying all the forms of waste and proposing ways to reduce or eliminate them.
A comment on the concept of wastefulness in the use of resources is called for here. Resources may be used in excess of what is required by a given technology because of neglect, lack of skills, or ostentation. Then comes the wrong choice of technology, product, or the siting of production with respect to the market. Energy and other resources, for example, are being wasted in unnecessarily long inter-urban transportation lines. The same may happen with intra-urban commuting: energy, public investment funds, and people's time and money go into overcoming the excessive distance between the workplace and home.
Another instance of wastefulness is that of foregoing the opportunity to recover energy and materials from waste. At the other end of the spectrum is the much-discussed and subjective issue of assessing lifestyles from the viewpoint of their energy and material intensity.
Moving to human resources and wastefulness, one can identify a number of situations characterized by a disregard for people's willingness and ability to work, be it in the labour market, through self-employment, in the household sector, or by voluntarily engaging in unpaid social activity. In many ways, the waste of human potential is the worst form of wastefulness: such foregone opportunities are lost forever as human lives cannot be stocked for later use.
In effect, waste reduction amounts in macro-economic terms to the release of resources for development. It will be economically advantageous as long as its implementation costs do not exceed the costs of producing additional resources, with its net contribution to development financing being the difference between these two costs. The economic advantage often goes hand in hand with environmental benefits.
A Development Reserve
The challenge is thus to find the right ways to transform these general approaches into policies that can result in concrete projects and programmes. In other words, to pass from the macro to the micro. Even in a planned economy, such as that which Kalecki (1978) was considering in his work, this transformation is fraught with problems.
The stakes, however, are significant. If an operating margin of 3 to 5 per cent of the GNP could be released over the next few years through the identification and reduction of waste, the exploitation of this "development reserve" could finally enable increased investment in social programmes more in keeping with the enormous needs.
Is this too optimistic a vision? Should the problem even be posed in terms of optimism or pessimism? On the contrary, one must emphasize the enormous moral and political responsibility of our generation. It is up to us to take this chance of profiting from or turning our backs on this opportunity.
The following section analyses the "development reserve" in Brazil, starting with flows of production, distribution, and consumption of goods and services. It does not, however, challenge the "objective function" or issue of consumption structures and lifestyles. This is not because it is unimportant; quite the contrary. But the choice of a social project is so laden ideologically and susceptible to controversy that it risks leading away from the subject at hand, which deals more modestly at the level of a greater instrumental efficiency both economic and ecological. It can be said, however, that a social project based less on the "civilization of having" and more on the self-limitation of material desires would certainly result in a much larger "development reserve" while also generating considerable free time for non-economic activities.
Wastes That Could Be Reduced
The word "waste" covers a wide range of situations characterized by different degrees of over-use of resources and under-use of products. While certain forms of waste can be measured quite accurately, the evaluation of others is based on more subjective criteria.
There are relatively good data as far as post-harvest losses are concerned, notably cereals and other agricultural products that have been harvested from the fields but not yet served on someone's plate. The losses here are due to inadequate transport and storage as well as inadequate capacity of the agro-industry to process production surpluses. It appears feasible to try and "save" 10 per cent of agricultural production, which amounts to about 1 per cent of the GNP in Brazil.
Recycling is another sector that deserves serious attention. It is estimated that the 180 largest cities in Brazil, for example, produce about 41 tonnes per day of garbage. From this, it should be possible to extract each year about 5.1 million tonnes of compost, 790,000 tonnes of recyclable plastic wastes, 2 million tonnes of paper and cardboard, 450,000 tonnes of glass and 500,000 tonnes of various metals. If a market can be found for the compost, this would represent a total value of about US$500 million, or about 0.15 per cent of the GNP (Sachs 1989).
Another activity being developed is the exchange of industrial wastes. The Sao Paulo "waste exchange", for example, is designed to recycle 20 per cent of the industrial wastes of 70,000 industries in this state. Other states are following in its footsteps and there are also several sectoral waste exchanges, notably in the chemical industry.²
Progress in this field depends less on techniques than on the organization of separating the paper, metal and glass before it is collected. This sector represents a potential gold mine for environmental organizations, neighbourhood groups, and schools. The Shanghai Company for Resource Recuperation and Use manages 580 collection centres throughout the city and commercializes 30 types of material. Most of its 37,000 employees are engaged in recycling industrial wastes.³
On the other hand, innovative techniques are needed for the valorization of liquid wastes. Many efforts were made in the 19th century to use grey water produced by cities for agriculture, notably in Paris, Edinburgh, Berlin, and Milan. But little was then known about how to treat effluents. Ironically, now that efficient methods have been developed, the fact that wastes are misplaced resources seems to have been forgotten. The goal of 0.5 per cent of the GNP for the recuperation of urban and industrial wastes appears to be certainly within the realm of the possible.
Leaving aside other causes of underutilization of current production systems, let us consider another form of waste - the over consumption of energy and raw materials in relation to the technical capacities of existing equipment. The oil crises of 1973 and 1979 brought us to the threshold of a new age of energy efficiency. Most industrialized countries have improved their energy efficiency by 15 to 30 per cent through energy conservation policies and technical progress, although it is true that structural changes in production systems and growth in the tertiary sector also contributed to this.
Despite such progress, the potential for energy conservation still remains enormous. Prototypes for new refrigerators consume 87 per cent less electricity than the current average, and the corresponding figure for air conditioners and electric water heaters is 75 per cent (Flavin and Dunning 1988:20).
According to Brown et al. (1988), efficiency gains of about 50 per cent could be realized in all sectors of the economy. In the construction industry, the concept of "intelligent buildings" enables one to project even more spectacular results. In the automobile industry, fleet performances by the end of the century should be 51 to 78 miles per gallon compared to 25 to 33 miles per gallon today.
But larger fuel savings will require major shifts of traffic from the private car to public transportation (four times more efficient per passenger mile), and from trucks to rail and water transport (three times more efficient per km tonne). Goldemberg et al. (1985) have shown that it is technically possible by the year 2020 to double the GNP per capita of industrial countries by reducing the installed capacity from 4.9 to 2.5 W. and to multiply per capita GNP of third world residents with an energy consumption per capita practically unchanged from current levels (1 W instead of 0.9 W)
Without tampering with structural variables, such as land-use planning, shortening of supply lines, substitution of rail and water transport for trucking, and public transportation for private cars, one could estimate that 0.25 to 0.5 per cent of the GNP could be saved through energy conservation in the transportation sector. The total of all energy conservation measures could thus reach, if not exceed, 1 per cent of the GNP in Brazil.
This inventory of the components of the "development reserve" could be completed by addressing the problem of resource conservation through better maintenance of equipment, infrastructure, buildings, and transportation systems. According to the International Labour Organization, poor maintenance is costing third world countries more than US$100 billion per year, and maybe even US$200 billion!4
This is another gold mine waiting to be exploited. To what extent can third world countries profit from it? How many dozens, if not hundreds of thousands of self-financing jobs could thus be created? There are few data at hand, but 1 per cent of the GNP would appear to be a conservative estimate.
Through reducing waste, the "development reserve" could thus amount to about 4 to 5 per cent of the GNP, which would provide an operating margin for investment and social programmes that slightly exceeds the foregone gains constituted by the servicing of the debt. To this is added the underutilization of abundant resources, which is, strictly speaking, not a waste of resources but rather a development opportunity that is lost.