When Life Gives You Lemons…or a Pandemic - Finding Opportunity in Disaster

Not in a hundred years has the world been hit by a pandemic this deadly. This means that most of us –whether project designer, implementer or evaluator—have no previous experience on how to cope with a crisis of this scale, nor anticipated it when assessing and preparing against risks to project outcomes. Even worse, how do project managers handle not just one but two shocks during project implementation?

The ongoing project Promoting Energy Efficiency and Renewable Energy in Selected Micro, Small and Medium Enterprises (MSME) Clusters in India, which started in early 2011, aims to develop and promote a market environment for energy-efficient and renewable energy (EE and RE) technologies in energy-intensive MSME clusters in India, such as dairy, ceramics and foundry. Due to logistical and bureaucratic hurdles, it was not until three years later in 2014 that project activities rolled out on the ground.

In November 2016, with less than three years of field-level project implementation, the government of India demonetized the national currency to weed out black money, counterfeits and cash hoarding. MSMEs were hit particularly hard as most of them used cash to pay for raw materials, production costs, incidental expenses and weekly wages. Some MSMEs had to temporarily shut down operations; many took two years to regain normal operations.

In March 2020, barely three years after that economic shock, the COVID-19 pandemic compelled the government to put the entire country in lockdown. The MSMEs once again face large losses—but unlike last time, this shutdown of operations is total and abrupt. Restarting the economy is expected to be slow, as companies have to restore their equipment and migratory workforce, and reestablish business with suppliers and clients in countries also affected by the pandemic.

Project activities on the ground are also at a standstill. However, cluster leaders continue to engage MSMEs by disseminating case studies and information on best operating practices and successful EE and RE technologies. As they did during the 2016 shock, project staff are exploring ways to make EE and RE attractive to MSMEs as a way to increase profits post-pandemic through energy savings, while also reducing carbon emissions.

While such a pandemic has never happened before in our lifetime, we know from our evaluations that crises can indeed become opportunities for both economic growth and environmental sustainability.

Take for example the Rio de Janeiro Integrated Ecosystem Management (IEM) in Production Landscapes of the North-Northwestern Fluminense project in Brazil (2005-2012). It specifically aimed to address deforestation and soil erosion from unsustainable agriculture practices, which had been linked with the region’s history of poverty. Seeing the project’s success, the state of Rio de Janeiro made plans to replicate the IEM microwatershed-based approach throughout the entire state.

Extreme rainfall in January 2011 triggered flooding and landslides in the state’s highland regions, destroying farms and obliterating water sources. It was considered the largest climatic and geological catastrophe in the country. The project management team had to divert part of the project funds towards emergency disaster response.

However, the team also used the disaster as an opening to introduce soil conservation and methods for production on steep areas, among other IEM practices. Because everything had been destroyed, it was easier for farmers to start over using the methods introduced by the project. The disaster also started a discussion on sustainable development practices that farmers had to adopt to avoid future tragedies. Farmers reported in 2016 that subsequent events of excessive rainfall did not result in massive erosion as before. Beyond the environmental benefits, IEM also enabled them to work collectively instead of individually; this opened up access to new markets, credit, and partnerships with assisting organizations

Caption: In the state of Rio de Janeiro in Brazil, a GEF-supported integrated ecosystem management (IEM) project had to divert project funds towards emergency disaster response after a devastating landslide. But they also used the disaster as an opportunity to introduce IEM practices to farmers rebuilding their livelihoods from scratch, to mitigate future natural shocks.

As the world confronts the Herculean task of rebuilding economies, we have yet to see how the India case turns out. We truly hope the project succeeds in eventually converting pandemic losses into a win for local enterprises, the economy and the environment. Perhaps this is an opportunity to convince the national government to integrate EE and RE practices and technologies in the latter’s post-pandemic support to MSMEs, which contribute about 30% of India’s GDP and provide employment to millions.

In the meantime, Suresh Kennit, project manager in the India case, proposes that development projects integrate a disaster management program for beneficiaries and a financial savings plan to increase their resilience against economic collapse. From someone whose project has gone through two major shocks in less than five years, that’s advice worth paying attention to.

Based on phone calls and an e-mail interview with Suresh Kennit, Project Manager for the GEF/UNIDO India MSME project in April 2020; and field interviews with 11 men and women farmers of Nova Friburgo, one of seven cities hit by the 2011 landslides, and the GEF/World Bank Brazil IEM project management team, headed by Rio Rural Program Coordinator Helga Hissa and Monitoring Coordinator Marcelo Monteiro in Rio de Janeiro in September 2016.