The Basic Concepts of True Value Metrics
Chapter 4 ... Analysis Methods

4-14 Analysis About Resources

Getting Data About Resources

Data about resources not going to be easy

Getting data about resources may not be easy. The key is to get as much data about resources in the community as possible, and to have these data organized so as to have some utility. A lot of personal and corporate wealth has been accumulated because there has been misinformation about resources … making data about resources transparent may not be popular!

About Local Resources

People are the most important

A reminder about people

The role of people was highlighted in the previous sector … a reminder that people are the key resource for progress and success. People … the human resource … are absolutely central to everything. People are the reason why a society exists, people are the society, and people are the resource that may be used to produce much of what is valuable for society. Without people … what is the point? But with people there can be goals that are worth achieving and a resource that helps get to the goal.

People need other resources … and must get organized so that the critical resources can be mobilized.

Organization is a resource

Success is determined by the ability of people in the community to organize and get resources deployed for the benefit of the community … to build value for the community. Organization is very important … it gives a framework for doing things. Organizational structures and the framework of law and regulation are enabling resources or constraints. Organizations are a key to making it possible for all sorts of resources to be mobilized and used in an effective way.

Natural resources

Natural resources are important … natural resources are enablers of activities that have value, or the natural resources, or lack of natural resources may be a critical constraint. Nature … the physical environment … is a key determinant of what is possible. Getting organized with some planning makes it possible to use natural resources in ways that benefit the community.

Production resources

Material resources of various sorts are important … in many cases machinery and equipment, vehicles, etc. are needed to have a productive society. The per capita use of energy has been used as a proxy for progress … as a proxy for the amount of machinery being used.

Infrastructure

Infrastructure is a resource … again, the infrastructure is another determinant of the productivity of the community.

Knowhow

Knowhow is important and it may be associated with people or it may be associated with organizations. Knowhow can facilitate progress or it can constrain progress. Education and training are activities that helps to build knowhow and the capacity to do things.

Money … loans and credit

Money helps … but money in a vacuum does nothing.

Resources are another way of thinking about means.

Success is a function of people … and how people organize themselves so that the resources that are available get used for the benefit of society.

Analysis About External Resources

Using external resources may be very bad

Who gets the benefit?

The use of external resources has the potential to have bad outcomes for very many reasons. Most external resources come with conditionality whether it is simply about how resources are to be used, or whether it relates to the way the resources made available are to be repaid.

ODA performance is appalling

Too much of the wrong measures

Official Development Assistance (ODA) is appalling … but the institutions engaged in the funding and implementation of ODA have been able to avoid any accountability for the appalling performance by “spinning” the data so that tiny progress is accorded an inordinate amount of PR and hype.

World Bank and the disbursement proxy

The World Bank has used disbursement as a proxy for progress in its projects for most of the past fifty years. This is an easy number for the World Bank to calculate … but that is about the only advantage of using this as a measure of anything.

Many ODA agencies use activity as proxy for impact

Many ODA agencies use activity as proxy for impact, and this is almost as bad as disbursement. In order for there to be development progress, there have to be development activities … but progress, that is impact on the community, may or may not come from activities. Reasons for this may be simple or complex … it does not really matter. If the goal is progress or impact on the community, then this is what should be measured.

Malaria

Since 2000 there has been a rapid scaling up of the fund flows for malaria control interventions. By 2008 the annual fund flow might have been as much as $2 billion with only minimal performance reporting about these fund flows. One statistic that has been widely used is the “bednet coverage achieved” … a measure of activity, and not a measure of impact. What is worrisome is that the link between bednet coverage and reduction in the burden of malaria is based on rather small studies with quite mixed results. Worse, the studies ignore the potential side effects of the emergence of resistance to the active chemicals over time and the cost of the program over time. Malaria control performance ought to be based on the cost of the interventions over time and the value of the malaria burden reduction over time … and in this light the spending to date has performance has probably been very weak.

Foreign direct investment (FDI)

Foreign direct investment brings an inflow of investment, brings an increase in jobs, brings some improvement to infrastructure, brings perhaps some improvement to health and education … but at a price. The price is that the investment is used to exploit something of local value like natural resources (for example timber or minerals) which are finite and eventually are depleted. The local employment remuneration is usually very small compared to the value of the exploitation of the resources and small relative to profits that are exported from the area. In some cases … too many … the exploitation leaves massive long term pollution that is ignored totally in the initial investment proposal presentations. The improvement in infrastructure is usually modest … or to the extent that it is significant mainly of use to move exploited resources out of the area. Social welfare assistance is usually small compared to the scale and value of the resources being exploited.

The business model that has been used for Western FDI for the past fifty years has been almost all bad … worse, in fact than much of the mercantile investment of the colonial era. The modern corporate FDI may, in fact be described best as corporate colonialism.

Humanitarian relief

Official Development Assistance (ODA) has not grown as fast as humanitarian relief during the past three decades … it is more “popular” with donors and easier to get taxpayer support. But it is rarely structured to support a development agenda and merely serves to help people survive rather than being part of an agenda to help people to progress.

The best way to describe the humanitarian relief sector is to say it is a global economic welfare system … and sending all the wrong signals to developing countries now for about 60 years.

Donor fatigue has been a problem for a very long time … and donors move on to something more fashionable or more suited to donor country taxpayers' fancy rather than staying with funding initiatives that are good but “boring” and might possibly get result and delivery serious progress. Good development is long term … in fact inter- generational. Nothing of sustainable significance can be achieved in a two year time span … or even five years.

The project form of organization is one of the core problems of the ORDA sector. There is little that is right about this form of organization for development. The project form of organization has its history in the building of large civil engineering works likes dams, canals, railroads and highways … but is totally unsuited for support to health, education and small-scale agriculture.

Worse the project is a vehicle for fund control by donors by-passing the local Ministry of Finance that ought to be providing oversight control to funds flowing through government into projects. Whatever happened to the idea of “single treasury account” for the control of government moneys?

Projects that are funded by outside agencies like the World Bank, USAID and others usually have employment terms that are way better than the local civil service … and totally unaffordable within the local economy under non-project circumstances. This makes it easy to recruit good staff … but what happens at the end of the project. The international project staff walk away and go on to another project somewhere else. The local staff become unemployed … and likely “mad as hell”!

Problems With Rule of Law