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June '02
The Auroville economy is not healthy
- by Carel
A white paper on
Auroville's economy was presented in April. Its main finding is that the
development of the commercial sector is a cause for concern and that
Auroville's current economic structure cannot be sustained
It started during a workshop
on Alternative Economic Systems in 1998. The Economy Group asked Prof.
Henk Thomas, Professor Emeritus of the Institute of Social Studies, The
Hague, The Netherlands and Chairman of Stichting de Zaaier, if he could
make recommendations for the future development of the Auroville
economy. "I answered that this was absolutely impossible without a
database and a solid research effort about where Auroville stands and
how it got there," says Henk. "The future cannot be sketched
unless one understands past trends and the current situation. And that
landed me in an exercise that was more far-reaching than I
imagined," he adds a bit ruefully. "For I accepted the
challenge and decided to take up a study of the key issues of the
economic history of Auroville from its beginning in 1968 till the
present, 34 years in all."
The exercise, in its initial
stages, involved data collection. Together with Aurovilians Guy and
Stuart this work started in March 1998. Stuart spent the next two years
completing it, for there was a vast amount of material available: the
Auroville Archives, the archives of the office of the Secretary,
Auroville Foundation, the archives of the Sri Aurobindo Society in
Pondicherry, the archives of the Centre for Scientific Research and
those of Aurelec contained much data. The material collected now
comprises a database of over 4000 pages, together with more than 2000
balance sheets and profits and loss accounts. Nevertheless, the data is
not complete. "We rescued some files, half eaten by rats and
insects, from a forgotten cupboard in the Karnataka pavilion, but we
were too late to rescue files from another place that had been cleaned
out just 3 weeks earlier. But we got far more than we had expected.
There is probably no communitarian movement from the nineteenth century
onwards which has such a rich documentation of its past," says Henk.
The researchers realized
that the material collected is so extensive that scientists from many
different disciplines can benefit from it. It led, in 1999, to the
creation of the Auroville Social Research Centre (SRC), which now houses
the database. As a spin-off from the economic research study, the SRC
initiated the Socio-Economic Survey of Auroville Employees 2000, a
survey of the people who work for Auroville, as a way to learn about the
specific dynamic between Auroville and the villages that surround it.
[see AVToday #152, September 2001] The results of this study will be
part of the Economic and Social History of Auroville 1968-2000, to be
published in spring 2003, while during the coming months a Paper with
the main findings is scheduled for publication.
The material found was not only vast, but also complex. Other
Aurovilians with different qualifications and Manuel Thomas, a chartered
accountant from Chennai, joined the research team. In March 2002,
Manuel, Guy and Stuart made a presentation of the work done so far to
the Auroville Funds and Assets Management Committee (FAMC). As the final
report might take at least another half year to appear, the FAMC asked
them to publish a 'White Paper' about the strengths and weaknesses of
the commercial sector of Auroville, together with recommendations. This
White Paper was presented to the members of the Economy Group and FAMC
on April 23rd, and to the executives of commercial units a day later.
Its main conclusion is that
Auroville's commercial sector as a whole is far from healthy,
notwithstanding the high level of profit contribution to Auroville. To
evaluate the impact of these contributions on the Auroville economy, the
researchers introduced the term 'carrying capacity', which indicates
what the yearly contribution of all commercial units together is per
capita Aurovilian. It appears that this 'carrying capacity' has gone
down from Rs 8,900/Aurovilian/year in 1993 to Rs 6,900/Aurovilian/year
in 1999, taking into account inflation and the population increase. The
Paper concludes that Auroville's current situation is loaded with risks
and uncertainties which threaten the survival of Auroville, even in the
short run.
On this basis, says the
Paper, it won't do to experiment with 'no money exchange' concepts other
than in a distributive sense, such as takes place in the "circle
system". A new economic course has to be charted out that is both
feasible, realistic as well as 'Aurovilian' in orientation and a
recommendation is made to study models that have proven feasible
elsewhere in the world.
The Paper also contains a
number of recommendations on how to improve the commercial sector.
Foremost is the need to change the prevailing negative attitude towards
'business' in Auroville. Then there is a necessity to design new
structures and institutions to promote commerce; to provide access to
capital; to limit product liability claims; to prevent the loss of one
unit affecting the others; to enter into joint ventures; and to
stimulate outsiders to participate in Auroville's development through
injecting venture capital. The Paper also recommends that institutions
like the Governing Board of the Auroville Foundation, the FAMC, and the
Auroville Board of Commerce take an active role in promoting Auroville
business.
The Paper, in its final
pages, expresses concern that the falling 'carrying capacity' will make
it more difficult to sustain adequate maintenance levels for those who
are maintained directly by Auroville. "Solidarity is a corner stone
of an economy with 'Aurovilian' characteristics. Translated in the
economic sphere, solidarity implies transparency of inequalities in
private property and private incomes and a legitimization of patterns
that have existed in Auroville from the earlier years onwards. One could
even imagine adjustments if different goals are set. Reflection on this
theme is necessary. For if this basic principle of solidarity is not
addressed, only those people who have sufficient income/cash flow levels
will be able to stay in the Auroville of the future."
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