Manado, 05 oct 2012


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My presentation at IBA, Sam Ratulangi Univ., Manado, Indonesia on 05th Oct 2012.

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Manado, 05 oct 2012

  1. 1. Yasuyuki Hirota (Univ. of Valencia, Spain) Skype: migjp2003Manado (Indonesia), 05 Oct 2012
  2. 2.  Economy: comes from the Greek word “οικονομία” (“οἶκος” (house) + “νέμω” (management)) Economy in East-Asian languages: “keizai” (“ 経済” ) in Japanese “Jīng jì” (“ 經濟 / 经济“ ) in Chinese (Mandarin) ”gyeongje” ( 경제“ ) in Korean All come from the Chinese phrase ”Jīng shì jì mín“ (” 經 世 濟 民 / 经 世 济 民 “ , “manage the world and satisfy people“) None of these concepts say about maximising profits but about the management of production, distribution and consumption We should produce to satisfy our own needs, not to make money at the cost of people / environment!!
  3. 3.  What is money? Answer: “An agreement within a community to use something as a means of exchange” (Bernard Lietaer) > So we can have our own means of exchange!: SCC How is money created and given into the economy? Answer: As bank credits. No debt, no money More info:
  4. 4.  Ghana: People lived well with barter (direct exchange): Little need to buy goods from British colonisers The British gov’t introduced a Ghanan national currency and started to charge tax only payable in this national currency Consequences: End of self-sufficient economy, dependency on British economy and impoverishment
  5. 5.  What makes Bali so attractive to tourists?: Its unique religious and cultural performances done for local communities Banjar: democratically-managed community- based planning and implementatiion unit for such performances The coexistence of rupiah and banjar helps the Balinese keep their tradition while prospering as a tourist destination More info: Lietaer (2003) and Lietaer and Belgin (2012), chapter 28
  6. 6.  A: Human being’s growth C: Cancer’s growth and what our money system demands us With compound interest rate our economy is destined to eat up all natural resources of our planet Source: Kennedy (1995)
  7. 7.  The interest improverished most people while enriching the few rich Source: “Inflation and Interest-free money” (Kennedy, 1995) available at: http://kennedy-bibliot
  8. 8.  Each regional economy: tends to be export- oriented > only produces exportable goods (monoculture) while giving up self-sufficiency (stops producing goods for local demands and starts importing them) Dependency on exports: shows vulnerability (weakness) in case of economic crisis as customers stop buying your products Self-sufficiency: way to soften the crisis
  9. 9.  A mutual-credit account system since 1982 and most popular SCC in the world Each member has a virtual account to clear transactions Remarkable cases: TEM (Volos, Greece), CES (started in Cape Town, South Africa and spread into the world), Hanbat LETS (Daejeon, South Korea) CES: TEM: (in Greek) Hanbat LETS: (in Korean)
  10. 10.  Founded in 1998 at Fortaleza, Ceará to struggle against the financial exclusion: originally operated only with real (Brazil’s official currency, R$) but now provides loans in R$ and Palma (SCC, although backed with R$) too Their slogan: “No community is poor, but there are impoverished ones!” Website (in Portuguese): More info in English: (also try Wikipedia on Banco Palmas) Video:
  11. 11.  An NGO (“Our Footprints” in Spanish) working to set up community banks, among others The NGO staff visits impoverished communities in Greater Buenos Aires and gives training courses for communities to finance itself Website (in Spanish, English etc.):
  12. 12.  Founded in 2003 as an extracurricular project at a Waldorf school in Prien am Chiemsee, Bavaria €-backed SCC, with 3% of face value donated to the local project you want to support 5% of commission is charged on reimbursing from Chiemgauer to € Virtually interest-free microcredits in Chiemgauer started: you need to pay interest, but it will be returned to you if you repay all your loan without delay Website (in German): Video: v=6_Bf85tX9YE
  13. 13.  Chiemgauer’s circulation
  14. 14.  Proposed by German merchant and economist Silvio Gesell (1862-1930) in his masterpiece “Natural Economic Order” Everything (food, cars, houses) is devaluated over time except money So let’s abolish the privilege of money by charging fees! > demurrage Natural Economic Order: http://www.silvio-
  15. 15.  The most successful experience of demurrage SCC The mayor Michael Unterguggenberger issued this SCC in July 1932 to tackle the Great Depression 1%/month of demurrage fee This SCC stimulated the local economy and people even wanted to pay tax in advance The Central Bank of Austria forbade it in Sep 1933
  16. 16.  Michael Unterguggenberger’s monument in front of the City Council
  17. 17.  A picture of that SCC in 1930s
  18. 18.  Operational since 1934 to stimulate B2B transactions among Swiss small businesses: one sixth of small businesses join The bank provides loans in WIR (SCC), only accepted by other WIRBank-member businesses, at lower interest rate 1.55 billion CHF is traded annually in this currency. More info (in German, French and Italian): Video: v=VMy8zmWSrFA
  19. 19.  An interest-free bank Savers don’t get interest but points which allow them to take interest-free loans Democratically managed by its members Website (in Swedish, English etc.): Video (part 1): v=aW2pj109Cr8,Video (part 2):, Video (part 3): v=iFx1V0_ysjo, Video (part 4):
  20. 20. Comparison of SCC cases LETS Banco Chiem- WIR Palmas gauer Food / No Yes Yes Yesprofessional serviceReimburse No Yes Yes No into offical tender Loans Unnecessary Easy Easy Easy Extension Neighbour- Neighbour- Regional Regional / hood hood National
  21. 21.  Microeconomy: management of an enterprise, a non-profit, a credit union etc. Macroeconomy: management of the whole economy at the local / regional / national level SCC’s feature: involvement of different stakeholders, such as: consumers, prosumers, volunteers, non-profits, local businesses, public sector, financial sector, tourists, public transportation
  22. 22. Stakeholders’ involvement LETS Banco Chiem- WIR Palmas gauer Consumers Yes Yes Yes YesVolunteers / non-profits Yes Yes Yes No Local businesses Few Some Some Many Public sector No No No No Financial sector No Yes Yes Yes Self-employed Yes Yes Yes Yes Huge corporations No No No No Tourists Yes / No No Yes No Public transportation No Yes No Yes?
  23. 23.  Means of transportation: on foot, bicycle, motorcycle, bus, funicular, taxi, private car, tramway, subway, train, ferry, airplanes…: Each means of transportation for its own purposes The same is true with CC: need to study different typologies and to see their advantages / disadvantages
  24. 24. 543 Official tender WIR CHIEMGAUER2 LETS1
  25. 25.  1: Set your SCC’s goals 2: Set up the leadership team 3: Set the value standard 4: Determine with what the SCC is backed 5: Determine how the SCC management cost is recovered? 6: Design how the SCC is issued, circulated and redeemed (withdrawn from the circulation) Further info: %20Currency%20Guide.pdf
  26. 26.  Key concept: replace imported goods / services with locally-produced ones 1: Local economy mapping 2: (Re)discover your local resources 3: Discussions in your community 4: Design the CSS model that fits your needs 5: Marketing for different stakeholders Further info: ndbook.pdf
  27. 27.  Need for appropriately-arranged language for different stakeholders: non-profits, local shops, factories, consumers, city councils etc… What is marketing?: “activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large” (American Marketing Association, 2007) What value can SCC offer for non-profits, local shops, factories, consumers, city councils etc.?
  28. 28.  Economy: Not to make profits but to satisfy our needs Money: An agreement within a community SCC: Our own means of exchange! Current money: Issued by commercial banks for them to make profits Compound interest: calls for exponential and unsustainable development and redistributes the wealth only for the rich Different experiences: LETS, Banco Palmas (Brazil), Nuestras Huellas (Argentina), Chiemgauer (Germany), WIRBank (Switzerland), JAK Bank (Sweden etc.)
  29. 29.  Demurrage: to assure money’s circulation and put an end to the privilege of money SCC as a macroeconomic tool: Need to involve different stakeholders SCC: Our own means of exchange! Important: Appropriate design, leveraging unused recourses and customised marketing for different stakeholders
  30. 30.  “The Future of Money” (Bernard Lietaer, Century, 2001) “Inflation and Interest-free Money” (Margrit Kennedy, http://kennedy- ) “Creating Wealth” (Bernard Lietaer and Gwendolyn Hallsmith, New Society Publishers, Gabriola Island (Canada),2011) “People Money” (Margrit Kennedy, Triarchy Press, 2012) “New Money for a New World” (Bernard Lietaer and Steven Belgin, Qitarra Press, Boulder (Colorado, US), 2012) “Sustaining Cultural Vitality in a Globalizing World: The Balinese Example” (Bernard Lietaer, 2003) available at: sustaining_cultural_vitality.pdf
  31. 31. Yasuyuki Hirota (Univ. of Valencia, Spain) Skype: migjp2003Manado (Indonesia), 05 Oct 2012