Rejunevating the West Coast Economy

So the Chathams has its own currency. Next it could be the West Coast. If the West Coast used a combination of local currencies, Mondragon-model cooperatives and Grameen Bank model microcredit schemes, combined with existing NZ trade barter schemes, then the $120 million Government development fund would work miracles.

If the West Coast wants to have more control over their economy, and are willing to learn how to apply the local currency lessons of the Great Depression, they would be winners. Right now there is a flourishing local currencies movement round the world! A search on ‘local currencies’ using internet site Google currently calls up nearly 50,000 articles.

So why create your own local money? Paul Glover founder of Ithaca HOURS, a very successful currency in Ithaca, New York State, sums up the mood of many small communities when he says:-

“We printed our own money because we watched Federal dollars come to town, shake a few hands, then leave to buy rainforest lumber and fight wars.”

Coasters are still grumpy over the size of the fund. And if the old model of economic development is used, $120 million could vanish quickly in failed businesses. This old model typically focuses on attracting tourism and other industries to the district by giving them the most favourable environmental and employment conditions. Effectively it ends up with local government subsidising the corporates. But as Richard Douthwaite points out in his book Short Circuit, if each district does this, they just end up competing with each other and bidding the prices down.

So what could $120 million could do for the West Coast?

The following ideas aren't mutually exclusive, but some combinations would work better than others. The money could:

• Buy membership for every West Coast business of a trade barter scheme like Bartercard or Itex. Just imagine if Christchurch signwriters, instead of buying their work boots in Christchurch, bought their boots from a Greymouth shoe shop instead. Multiply this type of transaction a few thousand times - Westport printers working for Auckland businesses – and what a boost that would be.

• Bring out the founder of Ithaca HOURS, Paul Glover, to help set up a West Coast currency to stimulate the local economy. Picture the notes in five denominations with beautiful West Coast scenes on it printed professionally, and with the words 'In the West Coast We Trust' on the front. Paul knows exactly how to get an inflation-proof local currency working effectively. His scheme has been going for nearly a decade now, has withstood the scrutiny of the Federal Reserve. The currency is widely accepted in Ithaca, a town of 30,000 in upstate New York, and has been copied by many towns. One HOUR is worth $10.

• Bring out someone from Mondragon Bank in Spain to help set cooperatives which don't fail. Of Mondragon, researcher Tim Huet says:-

‘ Mondragon's record of business creation is remarkable. Of the 103 cooperatives founded in the first three decades of the Mondragon Experience, from 1956 to 1986, only three closed. This is particularly impressive when you consider that the Basque region lost well over 100,000 jobs during Spain's deep ten-year recession that started in 1975.’

• Bring out Professor Muhummad Yunus from the Grameen Bank in Bangladesh to help set up microcredit schemes for fledgling businesses along his successful lines. This bank has 2 million borrowers, 94% of whom are women. In Bangladesh it has loaned money for the building of 506,000 houses. Worldwide it is replicated in 27 countries.

• Bring out someone from Toronto dollars to set up a local currency like theirs. This currency was launched by the Mayor in December 1998, and the notes have been printed at the Federal mint. If the currency is redeemed for Canadian dollars, ten percent goes to a chosen community group.

• Bring out Ruth Anderson who works for ROMA, the Mayo Roscommon currency in Ireland. Local businesses advertise on the back of the currency. As with the Toronto dollar, community organisations benefit as well as the local businesses.

Yes, used creatively $120 million could work miracles. The successful models for regeneration of local economies are all here in the world; all that is needed is the will to learn about them and apply them. And New Zealanders are great at learning from all over the world!

Perhaps the first action could be to use the fund to bring out the experts on new economics to a week long workshop run by the Mayors. Margrit Kennedy, very knowledgeble on local currencies, is coming in December/January under her own steam. And choose Bernard Lietaer author of forthcoming The Future of Money, Richard Douthwaite, author of Short Circuit, Ed Mayo of the New Economics Foundation in London, Thomas Greco, author of New Money for Healthy Communities, Paul Glover of Ithaca, and Susan Witt of the Schumacher Society in Massachusetts. And as for cooperative and microcredit experts, we have some in this country, and others are just dying to come to New Zealand. Try tempting them!

Deirdre Kent

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