The Chronicle interview.

ASHOK KHOSLA has for more than three decades promoted alternatives for sustainable development and protection of the environment. He holds a Ph.D. in experimental physics from Harvard University, where he also taught courses on the environment. A founding Director of the Government of India's Office of Environmental Planning and Coordination--the first national environmental agency in a developing country--Mr. Khosla was a Director, from 1976 to 1982, at the UN Environment Programme (UNEP), where he designed INFOTERRA, the international referral system for sources of environmental information of the United Nations. In 1983, he founded Development Alternatives, a not-for-profit corporation that combines social objectives with business methods in creating sustainable livelihoods for thousands of the rural and urban poor in India. On 19 November2002, he was awarded the UNEP Sasakawa Environment Prize, sponsored by the Nippon Foundation and founded by the late Ryoichi Sasakawa, which has been awarded annually sin ce 1984 to individuals who have made outstanding global contributions to the management and protection of the environment. Horst Rutsch of the UN Chronicle spoke with Mr. Khosla on 22 November.

On the limits of globalization 

Globalization so far only serves the rich, whether in the North or the South. The benefits come in the form of cheap goods and huge windfall profits for financial transactions and capital movements, and all kinds of other things that have very little to do with the realities of half of the world's population. Globalization does not lead to the creation of jobs, especially for the poor, most of whom are not going to get jobs anywhere through the efforts of globalized mechanisms.

There has to be another way. The other way, I believe, is by strengthening local economies. And that's where the concept of sustainable livelihoods comes in. These need to be created by sustainable enterprises. We've got to create enterprises and entrepreneurs who can mobilize the resources to create lobs. And for that, you need new kinds of technologies, new kinds of financing mechanisms and you need marketing systems--totally different and very flexible. But what characterizes the benign mechanisms are the capability of being decentralized, dependence on renewables, and amenability to use local skills and local materials. In essence, technologies and institutions have to be within the control of the community and individuals. That's a very different approach--not just building massive dams or large factories, refineries or power stations, but creating opportunities for local economies.

Economies of scale only exist as long as you externalize on the real costs--to nature, to the poor, to society and so on. It's very easy to talk about this as long as you don't include many of the costs that are implied by high degrees of centralization, which is highly subsidized, partly by the public but mostly by nature. It does not make sense to have those kinds of huge systems when you can do a lot of things locally just as well, and maybe better, tuned and tailored to local needs. That's the kind of economics we see as being necessary for sustainability.

On sustainable development

Many have tried to define sustainable development to understand the concept, but rather than trying to define it, one might just as easily describe it. It's pretty clear that you can't have sustainability if you have a massive amount of inequity and huge amounts of poverty--or affluence. The affluent tend to over-utilize certain resources in a way that destroys them, mostly so-called non-renewable resources. And the poor, to survive, have to get into more and more fragile eco-zones and tend to destroy the more renewable ones. It is no longer possible to accept extremes of poverty and affluence--not just from an ecological or economic or social point of view, or from a moral or social justice point of view, but from almost every other point of view. I think one has to accept that there has to be some lowering of ceilings and raising of floors before any real sustainable work can be brought about.

In my international work, I'm obviously interested in lowering the ceilings where consumption patterns and production systems in industrialized countries have to be transformed into something more sustainable. Domestically, which is where the bulk of my work is, I'm much more concerned about raising the floors--getting everyone in a position to satisfy their own basic needs and to regenerate the environment that has been destroyed: forests, soils, rivers. And we do that by a single-minded intervention, which we call "sustainable livelihoods", because I think the key to getting rid of poverty is creating jobs--but special kinds of jobs that not only pay you a decent income but also create goods and services for the local market and restore the health of the environment and its resources.

On financing for sustainable development

Innovation without multiplication is not much use unless you scale it up so that it takes root and is absorbed into the economy.

We haven't been that successful there, partly because we've had very little financial capital for it. It's very hard to convince people that the world out there needs investments rather than giveaways and donations. Poverty alleviation in developing countries unfortunately often goes like this: Parliaments vote a certain amount of money to the issue of poverty alleviation so they can get votes for themselves. That money is routed through various government mechanisms but gets hijacked on the way, mainly by the dominant political parties, and by others too. In the end, maybe one sixth or one tenth of it reaches the actual "beneficiaries" for whom it was intended. What we're really trying to say is that development can be made into a good business. People ought to be able to make money out of improving their own lives, improving the environment. And we've tried to design mechanisms for doing that. But you need investments. No business can start without a certain amount of capital and this one can't either. And we have not yet been able to raise that kind of money.

There is a huge amount of money for what is called microcredit--bank loans for households and small enterprises involving money to people--and I think it's wonderful. There are some 200 million women who will tell you how it has saved their lives. But microcredit can only take the vast majority from pure survival to subsistence. Of course, there are a few entrepreneurs among them who go beyond that, but basically it's a level of credit that allows you only to turn over your capital every day--if you buy some fish and sell them or you go and buy some raw materials and make toys or some other product. But you cannot possibly generate surpluses and reinvest them into improved productivity and machines.

Microcredit benefits individuals, but it doesn't create infrastructure. It doesn't build their capacity to save and invest in an ever-improved production capacity. Obviously, there are always exceptions: one woman received a microcredit loan and is now a businesswoman with ten workers. It happens, but by and large no. You can get a huge amount of money if you are established. Big business can get whatever they want--hundreds of millions of dollars. They have the clout and often don't even repay, but there's plenty of money for those kinds of loans. And, indeed, there is a fair amount of money for medium and small enterprises. It's not that there isn't any cash around in most developing countries--certainly in mine--for that.

But there's no money in what I call mini-investment. Microcredit--yes; small--yes; but not for in-between, for loans from, say, $1,000 to $20,000 that are crucial and actually create all the jobs. They are the ones that create the mini-industries that are actually the engines of job creation, that create 10, 15, 20 jobs, and that produce various goods and services needed in the market, but are technology-based. You need this money because you must buy a machine and set it up, and you must have some working capital, buy raw materials and train the workers. That does not exist.

Over the last twenty years, we have run ourselves ragged trying to get the International Finance Corporation, the World Bank, the United Nations Development Programme--everybody--to understand that if you want sustainable development, mini-investment is where it is-and that's the one area they're not addressing seriously enough.

We think it's quite atrocious, and we have come to the conclusion that if there is no actual conspiracy out there preventing it from happening, there certainly has to be some explanation for the pattern behind it. Maybe people are afraid of development; maybe they give a great deal of lip service to it, but nobody really wants it. One has to ask why there are still 1.3 billion people under this so-called dollar-a-day poverty line, the 2.7 billion or 3 billion people under the two-and-a-half-dollar-a-day poverty line. It's so easy to get rid of poverty, so there must be some reason. Maybe they know you can't be wealthy without having all these poor people around. So in my constituency, there is a whole question mark over "how serious are these guys?"

The United Nations goes around the world talking about development. The World Bank goes around talking about development. But there are more poor people in the world today than ever. It cannot be purely because of incompetence, of which we have enough. We really feel very outraged that there is this massive system which has delivered more than a trillion dollars in development money to the Third World, and there are still more poor people today than ever before. It's incomprehensible to me. That sense of outrage which St. Francis felt, which Mahatma Gandhi felt, doesn't seem to have permeated through the system at all. There are many speeches, and a huge amount of jet fuel is being burned up talking about it. But nobody seems to really give a damn about it. I have been given the run-around for many years by these same agencies which say "what you are saying is correct", and at the last minute find that a budget line or bureaucratic procedure doesn't allow them to take it up. They've got themselves so tied up that they cannot possibly do the right thing. So why do we need them? Why do we need the World Bank if it can't lend money to the only promising way for getting sustainable development. One has to want it.

On sustainable technologies

Developing countries need technologies that help people become participants in the economy on their own terms: to enter and take part in an economic system that is not completely dictated by the rich and the powerful, but includes, to some extent, their views, factors of production and their costs. This led us to what we call "sustainable technology", because there is a range of these--extending from very basic traditional concepts, like the use of mud and mud-fired bricks, all the way to sophisticated technology, like satellite and Internet communications and so on. All these are appropriate technologies. You need a mix of them to get from here to where you want to go.

Many aspects of this development model are probably relevant to the North. But for Development Alternatives in India, it is irrelevant. The North might have to look at these issues also in terms of lessons learned. They will have to find their own solutions, which may be somewhat different on the ground, but the basic concepts of economy--natural resource management and so on--are safe for everyone. But it certainly would apply in Burkina Faso, Mali, Mozambique and everywhere else. People from those countries do come and spend time with us and go back and try to do some of the things--so yes, it's widely applicable.

The model is very simple. It calls for designing technologies so that they can be under the control of the local communities; to use resources in a way that doesn't destroy them and produce goods and services people need in a commercially viable way, that's all. That's how development took place in the North too. They don't have all these development programmes in America. So, in sum, that's what Development Alternatives does, and we see the future as very, very bright-we're going to make it.

On Development Alternatives franchises

What we need is management, people who can go into the village and create local enterprises. We have decided that we would beat the system by adopting the route taken by Kentucky Fried Chicken and McDonald's, by franchising local entrepreneurs--they are the only ones who will stay in the community, giving them all the support systems and access to capital, the new technology, know-how, training and marketing systems and brand image. That's a route we think needs to be tried out. We don't know of any formal development assistance programmes that support this. We don't know any governments who support this. And we think it's atrocious, because it's pretty obvious, not only from a theoretical framework but from our experience on the ground. They're working, they're making money, they're expanding, they're multiplying and hiring others, but we can't get any capital.

Our latest effort, which is TARAhaat, is actually the one we designed to get around the problem. We decided to do a commercial operation on our own to generate the money that would allow us to deal with it. And it serves our purpose too because, you remember, we are pretty good at innovation and we haven't really succeeded in multiplication. But for multiplication, we needed a new kind of marketing approach, through TARAhaat, for bringing about a totally new way of getting into the village using the Internet. It's basically a combination of Yahoo.com, Amazon.com and AOL.com. That's all it is. But if you were a villager today and you got onto the Net, you would probably see it for a couple of hours and would never come back unless you were interested in the daily news or something.

What would a villager get out of the Net today? There is virtually no content of any use. So we've created a huge new web site called TARAhaat.com, which has the kind of content they need, in a form that they can access and in a language they can understand. And if they can't read, it's also verbal, you can hear it. So there are graphics, voice, 14 languages--right now three, but there will be 14--and you can do all your stuff: e-commerce, e-governance, e-mail, getting your understanding of your rights as a citizen, getting health care and so on.

On providing education through the Internet

Education is our biggest product at the moment, and it's selling well. People are really desperate for education, especially parents. Everybody says the poor don't understand the value of education-and probably they didn't for a while. But now, with television around, people have heard that Indians are making it big in California. The poorest of the poor are willing to pay 500 rupees a month--which is a lot of money-for a child to receive teaching. So we have that happening. Once you have the content and a good back end, then you need to have access in the village. Obviously, nobody has a computer, so we are setting up these cyber-cafes, which are franchised. The original idea was simply to market our TARA products. But to support such a thing, multiple revenue streams are needed. It is very carefully designed, very commercially-oriented--commercial means that it has to pay for itself. It is not subsidized. It's a web-based marketing system. And once this is done, you have e-commerce: you have complaints to t he Government or requests for forms or certificates--birth certificates, and this and that--right through the Net. You then need to have fulfilment and transactions, so we are getting into smart cards and career services and so on.

We have TARA gurus--barefoot consultants. Every businessman, even the wisest and most intelligent in the world, needs consultants to help set up a factory. It cannot be done alone. In the villages, these consultants help take down the information from the Web--blueprints and business plans--and then convert them into a business on the ground. We provide multiple services and that, I think, will generate a lot of money. Our business plan shows this is hugely profitable--and that money is all by a non-profit and is going to go into development.

RELATED ARTICLE: 'A whole new, or in a sense, a very Old, revival of natural resources'

The Development Alternatives Group comprises a triad of services, ranging from consulting to production and marketing, to outreach and advocacy. The first triad concerns providing an alternative to development work that is fragmented in its approach, overcoming disciplinary boundaries set up artificially in universities by economists for whom development means microcredit, or setting up infrastructure or power generation on a large scale. For us, development means all of those things put together. The universal problems that need to be addressed can be divided into three broad groups. We call them the problems of the interface--interaction between people and nature, people and machines, and people and people.

These are essentially the ideas, the problems and the concepts that underlie the structure of our organization: the environment, technology, as well as institutions and policies. Although we do work a great deal in each of these three areas--in consultancy, production, as well as marketing and outreach--they need to be brought together. We cannot design the technology unless we have a deeper understanding of its environmental implication; in other words, is it going to be sustainable? We do a great deal of work in each of these broad areas and then fuse them into an end-product. It might be a policy. Our outreach in policy advocacy might deal with the removal of subsidies or with the tax system, or it might deal with setting up new financing mechanisms. Some of those policies are addressed to Governments, to corporations and sometimes to the public.

Our biggest central thrust in the area of institutions is localization of government. Until you put people in charge of their resources, those resources are going to be wasted or destroyed. But the Panchayat, the village council, is still amenable to corruption and hijacking, because it comprises only five people. And it's very difficult for people who are marginalized to participate. We're really talking about government at the level of the "gram", the village. Our proposal is that you put everybody in charge, whether it's a small village or a hamlet. At that level, there are 200 or 500 or 1,000 households. They would all come together and Panchayat decisions must be made in their presence. You then can't have a lack of transparency or corruption. That is our number-one institutional proposal for the localization of government There are many things that with it, including the use of referendum and the right to recall, as well as transparency and information mechanisms. It is about putting people in charge, in meaningful terms, with the access to information they need.

In the area of environment, we have done a lot of work with corporations, trying to get them to run their factories and mines in much more environmentally harmonious ways. We also deal with the rural environment--less in terms of air pollution or water pollution, more of clean drinking water--finding ways to use resources that benefit the whole community. Water systems are a major part. We have made hundreds of small dams, ranging from 10 to 100 metres, which truly transform the environment by creating the possibility of three crops a year, whereas before there was only one or none, and by further regenerating ground water, bringing back the forests, the fish and the wildlife. It enables a whole new, or in a sense a very old, revival of the natural resources of the community.

Development Alternatives has developed a number of very interesting new technologies on the basis of which it can serve enterprises. Through our TARA arm, we sell or franchise them to small enterprises. TARA is really our commercial brand name, but essentially it is one that we in India would like to be seen as user-friendly, as responsive to global needs and demands in all areas. So far, we have covered a fair amount in the areas of water, energy and job creation--our biggest is low-cost shelter, with numerous innovations, really truly remarkable innovations, which can make a house affordable to the very poor. These are areas in which we are strong, and where we aren't, like in sanitation, we collaborate with others. This is a fairly solid network of innovation that has grown during twenty years of nurturing research for the poor.