ECSOM

ECOSYSTEM - BASED COMMUNITY-CENTRED SUSTAINABLE

DEVELOPMENT ORGANIZATION AND MANAGEMENT
Each cluster, consisting of a wholesale town, a group of
smaller market towns which relate to it, and the barrios that
are served by each market town, comprises a watershed
district with a habitat and a communal hierarchy evolved
over many years. In that sense, it is natural organization. It
is also the unit, which is almost meaningful for the
management of the development process. This for several
reasons:
1. The different microhabitats provide a variation of
resources that permit internal specialization and
diversification.
WHAT IS THE WATERSHED DISTRICT?
BACKGROUND
In classical economics, the
ultimate unit of analysis is the
business firm and the individual
person. The concept of the firm
produci ng a homogenous
product makes it possible to
elaborate the whole elegant
s t r uc t ur e of pr oduc t i on
schedules, cost curves, supply
curves and supply prices. The
concept of the utility-maximizing
individual enables us to derive
the corresponding demand
curves and demand prices,
whi ch together determi ne
market prices.
The par adi gm under l i es
devel opment economi cs.
Business enterprise has become
the pri mary uni t of the
development process and the
exemplar for all development
p r o j e c t s . De v e l o p me n t
management has become
i denti fi ed wi th enterpri se
management. In the real world
t hen, t he pr ot ot ype of
development is the displacement
of the natural community with
the company town with the
logging, the mining town, or the
sugar district.
These past modalities of
development have not had the
desired impact on reducing
poverty and providing adequate
livelihood for the greater
proportions of the population
both in the rural areas and in
the small towns and in the
larger urban centers. With no
mor e r esour ce f r ont i er
avai l abl e to absorb the
population, the deepening
poverty has caused serious
damage to the nati on' s
envi ronment and natural
resources. There is a massive
pressure to emigrate or to take
up arms and join the rebel
forces in the mountains.
Reforms are required as much
to solve these problems as to
provide a domestic market base
for industrial development.
attain goals of increasing
agricultural productivity and
real incomes for the farmers,
a n d g e n e r a t i n g
complementary, interlinked,
profitably interesting agro-
i n d u s t r i a l b u s i n e s s
opportunities for the farmers
and non-tilling land-owners.
It is also a scheme for
integrating government and
private sector projects in the
field where they are designed
and phased to become mutually
rei nf orci ng. The ECSOM
therefore is a potent local
resource management system
that provides a way by which
projects, that singly might not
be s e l f - l i qui da t i ng, i n
combination are placed in a
cost-recovery mode.
PURPOSE
T h e E c o s y s t e m- b a s e d
Community-centred Sustainable
Development Organization and
Management (ECSOM) i s
proposed as the appropriate field
organization and management
system at the sub-provincial
level (using a Watershed District
as the unit of production,
accounti ng, pl anni ng and
analysis) for the implementation
of government programs to
2. The population is large enough to achieve some scale
economies and to stimulate internal trade. There should be
anywhere from 200,000 to 300,000 people in each of the
districts.
3. At the same time, it is good organization to balance within
the same economic organization the communities that have
a stake in resources, which are ecologically symbiotic: e.g.
river valleys, brackish water foreshore areas and upland
watersheds.
LUBANG
LOOC
PALUAN
MAMBURAO
STA. CRUZ
SABLAYAN
CALINTAAN
RIZAL
SAN JOSE
MAGSAYSAY
ABRA DE ILOG
ECSOM
We must view each of these
watershed districts as if it were a
country since even in classical
economics, one integrates at the
l evel of the country. The
implications are:
1. You define the constituency of
each district a notion of district
citizenship, and even barrio and
town domiciliaries. The citizens at
each level have primacy at that
level in the benefits from the
resources of the community at that
level.
2. You establish a principle of
subsidiarity. You want maximum
self-reliance at each lowest level of
community and look to the next
level when there are clear
economic advantages from the
trade-off (terms of trade).
3. You optimize the use of social
overhead cost at each level of
community. This is somewhat
revolutionary and gives you results
that are quite different from
opti mi zi ng overhead on an
enterprise basis. It also means an
industry development that is
driven by buying rather than
selling economics. You do not
spawn a chicken growing industry
from the need to develop captive
markets for a large feed mill. You
spawn feed mills from the need of
chicken growers to source feed at a
lower cost. You reduce the cost of
sugar cane growing by spreading
farm overhead costs over multiple
crops through intensive use of the
land; rather than by reducing labor
and overhead costs per unit
through extensive cultivation and
mechanization.
4. This mode of thinking has
nothing to do with the polemic
between private or free enterprise
and socialism. The system does not
pose private against state or free
agai nst pl anned. It poses
community against enterprise as
the DOMINANT mode of organizing
economic life. It does not eliminate
enterprise. It merely views
enterprises as being subordinate to
community. You don't want towns
that are owned by companies. You
want companies that are owned by
townspeople. In other words you
don't want company towns. You do
want community companies.
5. This mode does not forswear
markets. It views communities as
free bargaining agents in a
system of free markets. You
introduce somewhere between
self-seeking individual interests
and an obscure national interest,
a more clearly perceived and
explicitly articulated communal
interest in the economic use of
natural and capital resources. It is
important to define a communal
tenure over resources in which
there is communal as opposed to
merely individual interests lake
and ri vers, foreshore and
nearshore areas, forest stands on
watersheds. Communities enter
i nt o al l i ances wi t h ot her
communi t i es
f or common
interest joint
vent ur es i n
p r o c e s s i n g
plants, in water
management
pr oj ect s, i n
transport and
communication
syst ems, i n
m a r k e t i n g
facilities.
6. Finally this
m o d e o f
thi nki ng wi l l
r e c o n s t r u c t
s o c i a l
accounting on a
totally different
b a s i s .
C o mmu n i t y
balance sheets
that measure
community net
worth, communi ty i ncome
statements that measure current
p r o d u c t i o n a n d i n c o me
generating transactions become a
true measure of community
welfare. National accounts that
are consolidations of community
accounts will measure national
welfare the way current GNP
accounts do not.
UNITS/ SUB-UNITS WITHIN
THE WATERSHED DISTRICT
The smallest unit of organization
and management (and the basic
unit of production and analysis) is
the Househol d. From the
Household, the successively
larger units of organization and
management ( up t o t he
Watershed District) are:
HOUSEHOLD
PRODUCTION TEAM (FOR RURAL)
NEIGHBORHOOD (FOR URBAN)
PRODUCTION NETWORK
(FOR RURAL)
NEIGHBORHOOD NETWORK
(FOR URBAN)
MARKET DISTRICT
ECONOMIC DISTRICT
UNITS/ SUB-UNITS BEYOND
THE ECONOMIC DISTRICT
From the Watershed District, the
successively larger units of
organization and management (up
to the country as an organization/
management unit) are:
WATERSHED DISTRICT
PROVINCE
REGION
AREA
COUNTRY
Each def i ned organi zati on/
management unit would have its
c or r es pondi ng manager i al
positions and span of control. All
these defined managerial positions
actually exist and their functions
are being performed. However, the
perspective is line management,
the management technology being
utilized is enterprise-based and the
management is politically driven
rather than through norms of
effective/ efficient management.
The first organizational levels from
the household are the Production
Teams in which the management
pyramid stands.
In the rural areas, groups of
households traditionally band
together to perform tasks (related
to primary production) that are
more efficiently/ effectively
undertaken by a group rather than
by an individual household (e.g.
alayon in Cebu, etc.). These
groupings have evolved over time
and have a natural leader. This is
what makes up the Production
Team (on the average composed of
20 households).
A group of Production Teams (who
relates to each other more than
with other Production Teams)
would form a Production Network
(a group of about 7 Production
Teams) A group of Production
Networks (about 22) relate to the
poblacion of a market town and
form a Market District. Market
Districts (about 4 to 5) form a
Watershed District.
The additional positions, defined
specifically for the alternative and
designed for optimizing optimizing
efficiency/ effectiveness, are the
Watershed District Manager and
Market District Area Manager. The
managers are really the collective
bargai ni ng agents of thei r
respective communities, They
negotiate on behalf of the
communities and are thus agents
who seek the optimization of the
community's economic, social and
ecological interests.
THE MANAGEMENT SYSTEM AND TECHNOLOGY
2
ECSOM
PRIVATE SECTOR
PROGRAMS
NATIONAL
AND LOCAL
GOVERNMENT
NEEDS FROM
GOVERNMENT
TO ACTIVATE
BUSINESS
BUSINESS
PROJECTS
TAXES
DELIVERY OF
GOVERNMENT
SERVICES
PUBLIC SECTOR
PROGRAMS
PLANNING AND
BUDGETING
PROCESS
HOUSEHOLDS
IN AN
ECONOMIC DISTRICT
RATIONALE FOR DELINEATION OF UNITS
The alternative organization/ management units emphasize and utilize the natural relationships and interdependence that exist, have developed from the
past, and promise to continue into the future. For example, the Production Team Leader would himself be a farmer who has gravitated to the position of Team
Leader, not by his own seeking of the position but by the habitual looking up to and consultation that his farmer-peers have accorded him over a long period. It
is not suggested that, when the organization/ management unit of Production Team is defined, some selection process is undergone to name the Production
Team Leader. Rather, the alternative organization/ management technology only acknowledges the already Production Team Leader, and proceeds with the
organizational and managerial tasks based on what has been the practice.
ECSOM MANAGEMENT POSTULATES
As necessary conditions to being operative, the Watershed District Management System, establishes a set of
organization/ management postulates:
Postulate A. Citizenship is defined according to organization/ management units (i.e. local levels) rather than
just national (e.g. one is a citizen of the SAMARICA Watershed District as well as being a
Filipino).
Postulate B. Definition of territory of an organization/ management unit is congruent with the political
boundaries of the juridical units corresponding to the defined organization/ management unit.
Postulate C. The citizens of the community as an organization/ management unit has jurisdiction over all
the natural and other resources within the defined territory of the organization/ management
unit and the Manager is the collective bargaining agent of the community who ensures that the
transactions between the community with its own stakeholders and with non-citizens redound
to the welfare of the whole community as depicted in its Social Accounting Matrix.
Postulate D. The Primary beneficiaries in any utilization/ exploitation of the natural resources of a territory (as
defined in Postulate B) are the citizens (as defined in Postulate A) of the territory.
Postulate E. Decision-making potential is first exhausted at the lowest level efficiently/ effectively feasible,
before decision-making at a higher level is involved.
POSTULATES A/B/D.
Definition of citizenship and territory according to organization/ management unit enables the
formulation of Postulate D (definition of primary beneficiaries) and identifies for whose benefit
economic and development management is undertaken all the way down to the most
fundamental organization/ management units. Congruence of the organization/ management
unit with political boundaries also facilitates relating of the unit's accounts to fiscal budgets or to
legal requirements.
POSTULATE C. Postulate C establishes that the manager of a defined organization/ management unit has
responsibility for ensuring that the natural and other resources within the defined territory of the
organization/ management unit are used in a manner that optimizes the benefits for the
community as a whole as shown by the Social Accounting Matrix. it is also understood that the
manager will not have complete control over the resources and that governance is practiced
through a participatory system..
The manager will be faced with 3 aspects with regard to control (whether the subject of control is
a resource, territory, people, etc.):
a) aspects that are fully and directly controllable;
b)aspects that are not directly controllable, but over which some influence may be exercised;
and
c)aspects that can neither be controlled nor influenced but affect the effectiveness/ efficiency of
the organization/ management unit and its manager.
The non-controllable and non-influential aspects require organizational/ managerial systems
for generating prognoses and properly evaluating the effects of these aspects on the
organization/ management unit (including its program, strategies, people, etc.) so that
provisions for appropriately coping with these effects, with the most advantage or the least loss,
become regular operating functions rather than ad-hoc, sporadic, unplanned reactions.
POSTULATE E. Postulate E is a statement of a principle of subsidiarity and is a reaction to the inefficiencies/
ineffectiveness of a centralized/ hierarchical organization.
Postulate E also enables the alternative management technology to carry out a true
decentralization (a ground-up approach). In contrast to the type of decentralization where
the center/ top gives up some authorities/ decision-making to lower levels at the peripheries, the
decentralization that Postulates E fosters establishes that a higher level really has no decision-
making authority unless a lower level had decided that particular decision-making capacities are
more effectively/ efficiently carried at the higher level than at its own level.
In another sense, Postulate E ultimately places the seat of authority in the household. As the
most fundamental organization/ management unit, it is also the basic seat of decision-making,
where all decision-making potentials are first exhausted before decision-making at the
Production Team Level is involved.
Postulate E is also an enabling condition for participatory democracy of the most extensive/
intensive kind.
THE SOCIAL
ACCOUNTING
MATRIX
The community's interest
is articulated in a pro-
f or ma c ons ol i dat ed
balance sheet and income
statement that account
for the consol i dated
assets of the community
compr i sed by t hei r
natural , capi tal and
financial resources and
t h e c r e d i t o r a n d
ownership claims of non-
community members to
show the community's
networth or wealth.
The stream of production
and direct and indirect
costs to community in the
process of production
measure the net value of
the community's income
after allowing for capital
depreciation and the
restoration of natural
capital to its original
state.
T h e o b j e c t i v e o f
management then is to
maxi mi ze communi ty
income and augment its
networth to ensure an
adequate lifestyle for the
s t a k e h o l d e r s a n d
preserve the capital for
the future generations.
The role of the managers
as collective bargaining
agents is to ensure that
the interest of their
p r i n c i p a l s , t h e
c o mmu n i t i e s , a r e
protected and optimized
i n t h e i r i n t e r n a l
operations and their
deal i ngs wi th other
communities. ,
ECOSYSTEM - BASED COMMUNI TY- CENTRED SUSTAI NABL E DEVEL OPMENT ORGANI ZATI ON AND MANAGEMENT
3
-local government officials
(governors and mayors) can
de s i gn a nd i ns t i t ut e
province- and municipality-
wide economic development
and poverty-combati ng
programs, using powers and
instruments already provided
in the Local Government
Code of 1991, such as the
st at ut ory aut hori t y of
municipalities and provinces
to confederate to undertake
j oi nt pr oduc t i on and
infrastructure projects (Book
I, Title 1, Ch.1, Sec. 3(f) of
Republic Act 9184), or at
local levels to enter into joint
v e n t u r e s wi t h l o c a l
cooperatives and private
sector business (Book I, Title
1, Ch.1, Sec. 3(l) and (Book I,
Title 1, Ch.4, Sec. 35), to
raise financing through loans
and floating of municipal or
provincial bonds (Book II,
Title 4, Sec. 299).
- i mpl ement er s of t he
Comprehensive Agrarian
Reform Program can design
compensation for landowners
to take the form of substitute
Pr oduct i on and I ncome
Possibility Schedules Defined as
Engines of Growth. The explicit
identification of the range of
pr oduct i on and i ncome
possibilities given by any set of
endowments (natural resource,
technol ogi cal and human
resource) should be couched in
terms of entire production
systems. Each of these systems
to qualify as part of the
possibility schedule should
have undergone at least a pre-
f easi bi l i t y scr eeni ng t o
establish a prima facie case for
techni cal , economi c and
financial feasibility. At that
point they can be considered
among the range of options of
engines of growth.
The identification and screening
process itself dictates a whole
t echni cal pr ot ocol t hat
combines four major areas of
analysis:
a) The natural resource
assessment that derives
the schedule of technical
and economic production
capabi l i ti es wi th the
ECSOM ECONOMIC MODEL
Simply stated, the organization and management mission is:
MAXIMIZE FUTURE CONSUMPTION OF THE CITIZENS OF
ORGANIZATION/ MANAGEMENT UNIT WHILE PRESERVING
AND ENHANCING THEIR CONSOLIDATED NETWORTH FOR THE
BENEFIT OF FUTURE GENERATIONS.
The alternative economic model will
serve the following functions:
a) Descriptive The model will
constitute the scientific basis for
understanding precisely how the
households/ communities operate
as organizations and as systems.
Just as the economic theory of the
firm provides a schematic picture of
how the enterprise functions,
mobilizes and combines resource
inputs into the most economic mix,
determines production volumes/
patterns in response to markets;
converts product into sales and
profit, and finally determines the
optimum use of profit for growth
and diversification, the alternative
economic model will serve the same
purpose for househol d and
communities: how household/
c ommuni t y r es our c es ar e
mobilized, how the production
processes mix (to meet the needs and wants) are determined, how
the optimum modes of transforming resources into incomes are
defined (i.e. direct production for local consumption versus
production of tradeable commodities to exchange for goods for the
community's use), etc.

b) Normative The models can establish the precise roles that
each agent within the household/ community must play to achieve
desired levels of economic performance. (In this function, the
models also serve as the means for communicating to the
community how each of the agents/ factor/ sector relates to the
whole system, how the performance of each in
the management of resources within each one's
control impacts the whole community, how
mutually rewarding benefits from joint/
cooperative effort are achieved, etc.).
In their normative function, the models also
make possible the definition of goals for each
agent/ factor/ sector and the community as a
whole, and the targets that are achievable over
different time horizons together with the precise
paths towards these targets. These goals/
targets are expressed in precise and measurable
terms.
Thus, the models provide the quantitative
measure for the system's performances at every
level establish unambiguous standards for
judging periodic performance of the system and
those responsible for its direction.
c) Evaluative The models can identify the
best/ optimal choices possible given a set of
controllable factors, constants/ constraints,
relationships.
d) Predictive The models can forecast alternative scenarios
(behaviors, performances, outcomes) when a set of policies,
strategies, etc. are implemented.
techni cal i nput-output
coefficients of each type of
resource use.
b) The range of process
technologies required for
the transformati on of
primary materials into end-
products of given market
specifications, with the
techni cal i nput-output
coefficients of each process.
c) The various market
parameters that translate
phys i c al out put i nt o
economic values at each
appropriate geographical
level.
d) The complement of
infrastructure and social-
overhead type capital that
would be required directly
b y t h e p r o d u c t i o n /
distribution processes, and
that could be supported as a
result of the primary and
secondary income effects of
the production/ income
generation resulting from
the resource usage and
system installation.
ECSOM AND LIVELIHOOD SYSTEMS
investment projects (as a
result of ECSOM planning)
that are more attractive
f i nanc i al l y t han l and
ownership; and can help
farmer-beneficiaries with a
complement of investments
to realize the potential of
intensive cultivation and
translate these into family
incomes that liberate them
from the poverty trap.
- planning officials and
agencies (from provincial to
national levels) can be guided
in genuine planning of viable,
effective projects from the
district upwards to national
projects.
-sectoral agencies of the
National Government can
plan infrastructure and
services delivery systems in a
systematic, coherent, and
efficient manner around the
ECSOM generated and
approved projects, improved
s uppo r t s e r v i c e s f o r
agri cul ture, and deri ve
potenti al i nfrastructure
investment and tertiary
WITH ECSOM
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ECSOM
COMMUNITY
NATURAL RESOURCES
P
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DISTRICT
PROVINCE
REGION
NATION
MAXIMO T. KALAW INSTITUTE FOR SUSTAINABLE DEVELOPMENT
1402-A West Tower, PSE Centre, Exchange Road, Ortigas Center, Pasig City 1605 PHILIPPINES
Phone: (632)631-7989; TelefaOx: (632)6317084; E-mail: mtkisd@mtkalawinstitute.com