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Silly Spaceman, Spend Your Money On Earth

“INGOs come from outer space” one community organization manager told me last week. He meant several things by this statement. Among them, he was referring to the failure of INGOs to meaningfully engage with local civil society organizations and the tendency for international development organizations to have very alien notions about how best to “develop” Myanmar. Even the best intentions have odd outcomes when you transplant them to an entirely foreign context. Yes, local context matters. Culture matters. History matters. Local spending and procurement also matter.

That’s right. Local procurement. Investment multiplier effects. What? That sounds dreadfully boring. Well, it is boring. In theory it can be boring. In practice, multiplier effects are extremely exciting. Do you like money? What if, after you spent your money, you could get it back and spend it again? We would all enjoy that, right? Good news – that is sort-of what buying in the local economy does. If you don’t believe me, perhaps you’ll believe these guys. It’s not alchemy. It’s community. Small local businesses re-invest a higher proportion of the money they receive in the local economy. This can create positive multiplier effects as the money gets spent and re-invested in other local businesses.

We have seen it happen before. Goods and services purchased in the local economy set in motion positive cycles of investment and job creation. If you are not convinced, consider the counterfactual. What happens to project money not spent in the local economy? Well, it’s fair to say zero dollars spent probably has zero chance of being re-spent and contributing to the growth of local businesses.

So, if you are an INGO, you might come from outer space, but you should still engage locally in lasting and meaningful ways. Spending your budget on locally sourced goods & services is one way to ensure your impact outlives the life of your project. Local procurement fuels the capacity of the local marketplace, allowing businesses to grow and create jobs. Creating that kind of impact should be high on the agenda of any spaceman.

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