Transboundary Joint Secretariat for Nature Conservation in the Southern Caucasus, Phase II. Financial Participatory Approach.
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1 Transboundary Joint Secretariat for the Southern Caucasus Promoting cooperation in nature conservation Transboundary Joint Secretariat for Nature Conservation in the Southern Caucasus, Phase II Financial Participatory Approach Concept and First Experiences November 2013
2 The Transboundary Joint Secretariat a programme of the German Financial Cooperation - is testi g the Fi a ial Pa ti ipato App oa h FPA i the outh Cau asus o the e uest of the Ministries of Environment of Armenia and Georgia. Target groups are families and communities which are adjacent to Protected Areas and whose livelihoods are closely related to these areas. The objective of the pilot tests is to mainstream the FPA for socio-economic development activities in projects for protected areas in the South Caucasus, financed through the KfW Development Bank, Germany. This document serves to provide a systematic understanding of the FPA, as well as a conceptual framework to the pilot tests. The opinions expressed in this FPA concept document do not necessarily reflect the opinions of KfW, any ministries and/or institutions in Armenia, Georgia and/or Azerbaijan nor any of the mentioned institutions and/or organisations. All given opinions are based on observations by the authors and on information obtained from quoted documents and as provided by stakeholders during the pilot implementation. The derived conclusions and recommendations are formulated for the specific purpose and objectives of the project. Copyright terms: Published by: Transboundary Joint Secretariat, Phase II Financed by: BMZ through KfW Implemented by: AHT GROUP AG and RECC Author: Jaap Vermaat, AHT GROUP AG First published: November 2013 Issue / Version No. / Copyright: Transboundary Joint Secretariat Reproduction of this publication for resale or other commercial purposes is prohibited without prior written permission of the copyright holder (TJS). Available: Reproduction of this publication, or parts thereof, for educational or other noncommercial purposes is authorized without prior written permission from the copyright holder, provided the source is accurately acknowledged by fully quoting the entire copyright terms as stated here into any redistribution (this applies for full reproductions as well as parts of thereof). 1
3 Financial Participatory Approach - Co ept a d Fi st E pe ie es TJ Financial Participatory Approach for Socio-Economic Development in German Financial Cooperation Concept and First Experiences in the South Caucasus Introduction and Background The German Financial Cooperation (FC) supports the three South Caucasus countries through KfW Development Bank to develop and manage the national Protected Areas (PA) according to international standards and to implement the international environmental agreements to which they have signed up, in particular the Convention on Biological Diversity (CBD). At the same time the FC programme fosters socio-economic development in adjacent communities, contributing to poverty alleviation objectives, as well as encouraging sustainable biodiversity protection in harmony with human development. Earlier efforts at nature protection and PA management in the South Caucasus entailed strict exclusion of people from PAs and the separation of the PA management from economic interests or traditions of adjoining communities. In recent years, with support of the FC, an important contribution to the modernisation of the sector was achieved: local socio-economic development aspects and access of people to the PAs (e.g. mutually agreed sustainable use of natural resources in "support zones" and nature tourism) are increasingly included in PA development and management. The reconciliation of conservation of biological and cultural diversity and economic and social development through partnerships between people and nature is at the centre of UNESCO's Man and Biosphere (MAB) Programme. Biosphere reserves do not only focus on biodiversity conservation, but also test and demonstrate innovative approaches to sustainable development from local to international scales 1. At present first initiatives are emerging for establishing Biosphere Reserves and legislation is currently under review to provide a legal basis for this. Some Biosphere projects are financed by the German FC. In the last two decades the FC in Latin America 2 has been involved in applying a specific participatory planning and management approach to support socio-economic Both German FC and FC from other donors. 1
4 TJ Fi a ial Pa ti ipato App oa h - Concept and First Experiences development. Several names and labels are associated with the approach, such as Co tests a d A a ds, Pa ti ipatio, A ti it a d A a e ess of the elf PAA, Ra i, Fi a ial Pa ti ipato App oa h FPA, et., depe di g o the pa ti ula geog aphi al, so io-cultural and technically specific context of its use. It differs significantly from traditional socio-economic development approaches that promote various income-generating activities through training, provision of inputs and possibly micro-credit. FPA is based on promoting socioeconomic development of communities through a cognitive learning development process. A key characteristic is the use of cooperative competition tools in such areas as agricultural development, rural development and nature conservation. The approach also acts as a multiplier to donor funds, as they are supplemented with substantial contributions from the beneficiary families and communities themselves. Currently 3, the Transboundary Joint Secretariat (TJS) is testing the Financial Participatory Approach in the South Caucasus on the request of the Ministries of Environment of Armenia and Georgia. Target groups are families and communities which are adjacent to Protected Areas and whose livelihoods are closely related to these PAs. The objective of these pilots is to mainstream the FPA for socio-economic development activities in the PA Development projects, financed by the German FC in the South Caucasus. Map showing the pilot areas for FPA testing in South Caucasus
5 Key principles and methodological essentials of the FPA The FPA is an established and proven approach to support socio-economic development in poor rural areas, which uses direct financial resources for mobilizing local populations to take charge of their own development. It is geared to generate autonomous development dynamics, which are positive, inclusive and very participatory at family, community and at regional levels. Consequently local ownership of local development initiatives and their implementation is very high and complete. This is further reinforced by entrusting the responsibilities for planning and implementing development initiatives with local communities, together with decision making powers over the use of the available (financial) resources. The FPA enables families and communities to acquire valuable experience with generating development ideas and potentials, selecting and making concrete plans, taking financial decisions, and managing, implementing and evaluating their enterprises, etc. The acquisition and social internalization of knowledge and experience (both internal and external) is an essential component. This also includes exchange visits, and the mobilization and use of external expertise to set up and implement development activities or training. The principle of employing local stakeholder juries to judge ideas and their implementation, further stimulates local knowledge, expertise development and broad based local leadership for development. It also increases ownership and self-confidence. The FPA considers women to be key actors and decision makers for family livelihoods and in the local development process. Their interests are being explicitly addressed. For this the FPA upholds several key principles, as for example: i. Cognitive learning Genuine applied learning in a development context is based on the notion that people and groups already possess valid knowledge and consequently it is not about the t a sfe of k o ledge f o e pe ts to e efi ia ies a d t ai ees, ut a out building on, and improving existing knowledge. This entails that existing knowledge needs to be externalized and systematized and to be related and associated with new knowledge in order to arrive at new, adapted and functional technologies and practices. Local and external knowledge, experience and technology are mobilised for eati g a opti al lo al fit to local conditions. There is a strong interaction 3
6 TJ Fi a ial Pa ti ipato App oa h - Concept and First Experiences between local best practices and eligible new technology. ii. Cooperative competitive tools and capitalization Withi the FPA the ole of p oje ts is to dis o e spe ifi lo al o te ts, feasi le and viable development opportunities together with people who have specific capacities to implement them successfully. Subsequently projects provide strong oti ato s to eate a environment for local learning, experimentation, excel and exchange. This is incited by contests with prizes where everyone wins as know-how is being exchanged. The contests focus on determining who has best solutions, judged on results, and best practices in applying solutions. Contests also allow the identification of the potentially most successful initiatives, which may be rewarded through co-funding for implementation. FPA means learning from the best, who are as such fully recognized and rewarded. iii. Mobilization and exchange of learning and knowledge Competitions and contests are conducted at community and regional levels and assessed by local juries who award prizes. The process allows dynamic exchanges of local and regional ideas, experiences and new best practices applied by individual families and communities. The approach strongly favours locally driven exchange visits and locally driven requests for and mobilisation of external expertise. This creates a social environment conducive to the exploration of development activities that are locally accepted and supported. Examples include the exploration of possibilities and opportunities for turning nature conservation into local socioeconomic opportunities (nature oriented tourism, improved range and pasture management, developing alternative and cheaper sources to replace fuel wood, etc.) iv. All initiatives come from the population The contests and their outcomes are fully people-driven. The FPA process in terms of contents and activities is fully locally managed by a local multi stakeholder working group. This working group oversees the dynamics of the process and specifically establishes the mechanisms for the operations of the initial contests and the ensuing pilot actions. The budget per group of actors (selected villages, authorities, etc.) is jointly prepared to support learning and exchange visits, juries, prizes, external technical assistance to participants, etc. 4
7 v. Facilitating role of the FC project The project facilitates and coordinates the FPA activities. It may orientate in terms of the general themes such as agriculture, health, irrigation, environment, nature protection, etc., and thus define global objectives and a framework within which the FPA is being conducted. Everything else is people-driven. The project provides training and guidance to the local working group to assist them in adhering to the FPA principles and to the objectives of the project. Experience has shown that the applied FPA principles generate strong advantages: Community mobilization concerning the development themes and solutions is very high and indeed intense Local ownership has proven to be very strong concerning the ideas and activities generated and implemented, with or without awards Involvement of local authorities is generally very high A constructive enthusiasm is developed by local populations, including women and women's groups who have become active in generating ideas about improving their livelihoods Total transparency of local decision making FPA measures and tools The principles outlined above are generally made operational through the development of the following kinds of measures: i. Awards in agricultural-ecological contests The population determines the themes, the participants and the awards, establishes rules, 4 defines their own contributions and appoints an independent jury. The funds employed not only serve to promote awareness through the theoretical treatment of relevant themes, such as agriculture, environment, etc., but also to implement relevant concrete measures such as e.g. school gardens, ecologically benign agricultural production and processing, the construction of near-natural fishponds, 4 Including eligibility and selection criteria, which will ensure that solutions and activities remain within the general scope of the project, are nature friendly and that politically and religiously contentious themes are evoked. 5
8 TJ Fi a ial Pa ti ipato App oa h - Concept and First Experiences planting and maintaining fuel wood lots, etc. Participants invest also significant amounts of their own resources and have large ownership of the activities and results. The awards paid out also increase the degree of capitalisation in the rural setting. ii. Capitalisation Families that organise themselves into groups receive small start-funds to implement their own best ideas and practices, followed by competition for best implementation with awards granted. In other cases (or as a next step) family groups may receive bonuses on top of their own proven savings. These savings may have been generated among others by the above awards from contests. The rules of the saving group, lending conditions, administration and sanctions are largely defined within the group, although the FC project may definitely provide advice on this aspect. A bank account has to be opened and records have to be kept. The setting up of these (saving) groups leads to an increased degree of organisation among the population, increases the equity of the participating families and, consequently the investment activity in the region, enabling them to gather more experiences with the banking sector and using joint savings for profitable undertakings. iii. Local initiatives Small investments in productive, income-creating projects (such as non-timber forest product collection and marketing, beekeeping, dairy processing, or tourism) are promoted through loans or grants. The business ideas are solicited from the local population through a competition. The award money is mostly used for further developing the best promising ideas (including the business plans), but also requiring a significant amount of counterpart contributions from the beneficiaries themselves. The decision on financing is taken by independent representatives of the population and the project 5. 5 Proposals may be submitted to the implementing agency and the FC for their consent. 6
9 Concrete tools and steps employed by the FPA for implementing these types of measures are diverse and may vary in their application, depending on the specific local circumstances. Typical tools and steps generally include the following 6 : a) A local working group is set up, composed of different and representative local stakeholders, facilitated by an expert of the FC project; facilitation will often include a basic training in participatory methods, communication and principles of the FPA. The working group, which includes local authorities, will oversee the entire process and specifically establish the mechanisms for the operations of the initial contests and the ensuing pilot actions, set up representative juries, and establish a budget per group of actors (selected communities, authorities, groups of families, etc.) to support learning and exchange visits, jury costs, prizes, external technical assistance to participants, media attention, etc. b) Together with local communities qualitative participatory tools are applied 7 to ide tif the ke pa a ete s i the so ial e ous s ste hi h a e esse tial fo triggering socio-economic development and improving local livelihoods. Issues considered may concern sources of revenue and other earnings, cash cycles, access to banking and (formal and informal) credit systems, importance of incoming resources from migration, etc. Collective participatory experiences and other development efforts are assessed. c) A knowledge contest is launched at the regional level among families in order to identify (and at the same time externalize at community level) all kinds of local knowledge and potentials (practices, people,...) that may work, have potential and may be called upon and mobilized during the concrete pilot actions of the next phase for development purposes. This provides local populations with an opportunity to open up their horizons, rendering visible the different local opportunities for socioeconomic development. Exchange visits between different communities are 6 Likewise there is a high variability in the names used for these tools, depending on projects, circumstances and local preferences. The main principles applied are the same, though. 7 At this stage typical Rapid Rural Appraisal (RRA) and Participatory Rural Appraisal (PRA) tools may be used, such as transect walks, qualitative and / or semi structured interviews together with focus group discussions, development of transect and resource maps (agricultural, natural resources, services and other), trend analysis, social mapping and stakeholder analysis, etc. 7
10 TJ Fi a ial Pa ti ipato App oa h - Concept and First Experiences excellent tools to strengthen the impact. d) Competition between villages on different practices to promote improvement of specific development issues with cash awards to encourage participation and to enhance the value of best achievements and render them more visible (e.g. communal pasture management, developing and implementing a sustainable community forestry management plan, organize village space, improve local infrastructure, etc.). e) Based on the outcome of the above, a planning competition between communities may be launched requesting them to identify what they would like to do as a community for their own sustainable development in the future, based on their own description of their past, their present situation and their aspirations for the future. The outcome of the planning competition may lead to an accepted community development intervention, which in its own right can be implemented in a contests and awards mode. f) Villages will participate in the local initiative contest among families, which will cofinance the budget of winning initiatives for setting up and launching small new business enterprises. The purpose of this contest is to promote investments in innovative activities for the area (production, processing, marketing, equipment, etc.), driven by local initiatives. g) Part and parcel of the FPA is the development and diffusion of results among pa ti ipati g o u ities a d the o ld at la ge. Pa tial esults a d out o es, ill be gradually elaborated as they emerge, and are disseminated accordingly through local and regional media channels. This reinforces the inherent learning and exchange principle of the FPA. Final results are compiled, evaluated and synthesized. The findings and conclusions are shared and disseminated widely. This has proven to be a very powerful tool to increase community self-esteem, local ownership and regional learning and awareness. 8
11 FPA benefits and preconditions The use of the above mentioned tools and measures may lead to significant development related benefits, when certain preconditions are being met. Expected benefits are: i. An approach adapted to local circumstances The FPA takes local actors (individuals, families, villages) and their potential at the heart of its activities and its drives to identify and mobilize local individual and collective capacities and potentials, which are at the basis of the solutions adopted and pursued. ii. Ownership and empowerment The FPA arouses strong local socio-economic development dynamics which are fiercely supported and borne by the local populations and their authorities, who in o e tha o e se se o the de elop e t i itiati es. The a e ade uatel empowered and enabled to act themselves, to negotiate and construct alliances with public and private sector stakeholders, to mobilize external expertise where and when required, putting to value existing potentials that consolidate and improve their livelihoods, laying the foundation for sustainable development. Transparent use of FPA funds contributes to strengthening local good governance. iii. Project cost efficiency The FPA reduces project costs, as the contests and awards activities themselves implicitly yet effectively trigger sensitization and ownership, while developing capacities, potentials and dynamics. The availability of capitalization and investment funds, their transparent and participatory management, as well as the guarantee that the funds will be available to local organizations and families who develop initiatives. The large degree of local ownership and motivation to show best results stimulate participants to contribute to efficient spending of project investments. In this way the project budget itself is the lever, which reinforces and strengthens local capacities and mobilises substantial local immaterial, material and financial resources. These local contributions function as a multiplier on the project investments. 9
12 TJ Fi a ial Pa ti ipato App oa h - Concept and First Experiences iv. Mobilization of autonomous funding One of the main needs of poor rural areas is access to funds. The FPA allows for the injection of capital into the local economy, under conditions of reduced overhead and transaction costs. Funds are transferred locally as awards for economic activity contests, capitalization and co-financing activities. Experience has shown that with increased transparency and participation in the management of the funds the FPA mobilizes and motivates local actors to invest themselves, to bring in their own resources (labour, savings, goods), and mobilize additional support through family, friends, etc. v. Powerful synergies with nature protection The FPA associates the identification of development related themes to the existing situation and setting where this development has to take place. Wherever this context is related to existing and intended efforts at nature protection the FPA creates a strong platform for discussing, encouraging and generating development ideas which seriously take into account these efforts. It allows for the identification of activities which serve at the same time the development interests of local populations, while respecting and strengthening the impact of nature protection. For example alternative range management methods together with adapted animal husbandry, tourism development activities together with regulated and reduced hunting practices, regulated extraction of plant resources together with new agriculture production options, and so on. The following preconditions apply for the FPA to be successfully implemented: Authorities accept the FPA and cooperate The development initiatives which are awarded and / or receive funds through the FPA process are not to frustrate or thwart the main project objectives The award selection process during the contests should avoid initiatives which could be politically and / or religiously contentious As the FPA is generally implemented in a rural and agricultural context 8, it is important that as much as possible the agricultural cycle is taken into consideration. 8 The FPA can as well be applied in an urban context. 10
13 Case example: First experiences with the FPA in Armenia ( ) At the end of 2011 a first pilot intervention was initiated in Armenia in five communities (Chakaten, Shikahohg, Srashen, Tsav, Nerkin Hand) that are associated with the Shikahogh State Reserve, which is part of the Open Programme to be financed by KfW. Though the pilot activity is conducted and financed as a test independently of the Open Programme 9, the Ministry of Nature Protection (MoNP) in Armenia requested that the pilot be conducted in a way for the Open Programme to benefit conceptually from the outcome. The FPA pilot conducted six contests in 2012; the first two contests were in all five communities; the subsequent contests were conducted in three communities (Shrashen, Shikahogh and Tsav). A local consultant was engaged as a facilitator and a local NGO was contracted to provide technical and logistical support and administrative services, such as arranging exchange visits and paying the grants to the contest winners. They worked under the direction of an international expert with experience from other similar projects. The Syunik Regional Working Group (RWG) was established by representatives of various State agencies, donor organizations, protected areas, NGOs, local communities, and other entities. The Vice Governor of Syunik Region was elected Head of the RWG. An Executive Body of the RWG was appointed to coordinate the implementation. The RWG undertook the discussions, commented on anticipated activities, appointed jury members for different contests, etc. Either Meeting of a Regional Working Group the RWG or its Executive Body met at least once in each month throughout The first contests were organised by the RWG with support of the local consultant. The juries were formed by the Regional Working Group for each competition separately. In a later stage Village Working Groups (VWGs) were established for planning and 9 The FPA can as well be applied in an urban context. 11
14 TJ Fi a ial Pa ti ipato App oa h - Concept and First Experiences implementing village level contests. The VWGs were very active and worked closely with their community members. At the end of the contests, participants were asked to evaluate in a general manner their experiences with and the usefulness of this particular approach. The findings are summarised below. 1. Local knowledge contest The aim was to submit innovative, competitive and feasible business ideas. It was held in the selected five villages in Syunik Region. It was announced and publicised via TV channels not only in the 5 core villages but all over the entire Syunik Region, in order to draw in a maximum of good ideas which the wider area might produce. Thirteen interesting ideas for investments were submitted which proposed a wide range of activities ranging from various agricultural activities, to setting up an ecocafe, and the sale of locally made cakes. Eight ideas received awards with grants a i g f o th pla e to st place). The region-wide publicity for proposing activities to be implemented in the five selected communities gave a somewhat mixed result. The winning ideas were generally considered very interesting. Yet they came all from communities other than the 5 core villages of the test. People in the 5 core villages did not pick up these ideas for implementation, as these were not their ideas. People could not claim ownership of them and did not feel in any way related to them. The lesson learned is that the socio-geographic coverage of the call for ideas should correspond with the area and groups involved in the implementation. Nevertheless the exemplary value of the results for the Shikahogh region was important. 2. Village participatory planning contest (PPC) The competition in five communities was entitled "Our Community's Yesterday, Today and Tomorrow". It triggered intense debates about development initiatives and created interesting village dynamics prior to the launch of the other contests. The communities received initial funds to prepare their presentations. The communities prepared wallpapers, posters, PowerPoint presentations and one community even presented their ideas through a live theatrical display. Each participating village received a grant award, a gi g f o th to st ranking). As an additional encouragement the prize to the winning community was 12
15 u e pe tedl dou led i alue a o t i utio f o the Go e o s Offi e. Wallpaper from one village Live presentation by one village Such a contest may need some adjustment in terms of eligibility criteria for ideas to avoid possible religious or political controversy. However, participants rated the contest positively. 3. Local Capitalisation Fund (LCF), implemented by women groups at village level A contest for women groups in three communities. In total 10 active groups developed small scale economic activities such as growing and processing of agricultural products and in textile production. The participants received each a sta ti g fu d of app o i atel 7. Although sta ti g ith hesitatio a d uncertainty the group members supported each other and some women developed themselves as group leaders, quite contrary to their own initial expectations. All groups claim that their new business activities are now financially viable. Several activities have the potential to add Meeting with LCF participants further value and thus to move upmarket and quality markets. The overall rating of the participants was very positive. 4. Development contests between families at village level Contest in three communities generated business ideas for improving household incomes. This contest drew considerable attention of the community but the level of internal debate and generated internal dynamics were lower than for the other 13
16 TJ Fi a ial Pa ti ipato App oa h - Concept and First Experiences contests named above. This contest was mainly driven by men, who found it difficult to develop ideas that go beyond the known agricultural activities; the generated ideas showed limited innovation. During the assessments younger community members did have questions on newer agricultural technologies (such as dripirrigation) that were not considered during the contest. Proposed agriculture activities were well implemented with good results, but lacked innovation. 5. Development contests at village level This contest geared towards improving the village spaces and recreational places t igge ed a de ate, hi h led to o ga isi g lea i g da s i all pa ti ipati g villages. The main principles of the FPA are geared towards creating dynamics by constructive competition, innovative ideas and based on people-driven ideas, but these were less well followed in this activity. The cleaning activities were well implemented with well-cleaned village spaces and sites, and as such to the satisfaction of the communities and their populations, but the ownership, pride and exemplary practice for replication were less obvious. Such contests need sound facilitation to design them around local priority issues as perceived by the people. Local Initiative Fund The contest was held in three communities in two phases. The first phase generated 45 interesting new individual business ideas in the participating villages, to access special markets. From these 16 finalists were selected that each received a grant of 140 EUR to develop their business ideas further. Of these 3 were awarded winning grants and 8 received encouragement grants; three of these were "TJS Special Awards" granted to participants from Tsav village that otherwise would have been without any award. The ideas included: local honey certification, local pharmacy, thyme collection, local wine production and marketing, a sewing workshop. Participants judged the approach and outcome positively. 14
17 In this first pilot the Village Working Groups (VWGs) were instrumental in the success of the activities as they came directly out of the communities and had closer interactions with the contest participants. The Regional Working Group had a less direct link to the communities. The composition of the Working Groups can be further improved by representing all social groups of a community, i.e. more women and representatives of the younger generation. Although this pilot activity has only recently started, the first experiences in the Armenian context are promising, and have been received very favourably. The experiences reveal: A very high level of community mobilization regarding development issues Very strong local ownership in the local communities of the development ideas generated (with or without an award) High positive involvement from local authorities Impressive enthusiasm manifested by local populations, including women and o e s g oups, ho ha e e o e e a ti e i ge e ati g ideas about improving their livelihoods Based on the Armenian experiences FPA activities will be continued and also tested along similar lines in the Kazbegi area in Georgia in order to gain wider experience and to develop guidelines for FPA implementation in the South Caucasus. The emphasis is on a clear people-driven process, rather than a project objective-oriented process. This differs from more traditional socio-economic development approaches that many facilitators are familiar with. The FPA applies as little as possible restrictions and conditions for ideas and activities that people propose and that they will undertake. The overseeing of FPA activities is done by the regional working group. Therefore ideas and activities may diverge from expectations or even from development objectives of the project. Appropriate coaching and prudent use of criteria for the competitions are important to ensure that activities will stimulate better harmony between socio-economic development and nature protection objectives and to avoid any cultural, political or social controversies. Further Reading: Willem H.M. Immerzeel (2006). Poverty, how to accelerate change. Experience, results and focus of an innovative methodology from Latin America. Link: last visit:
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