Around the world, infrastructure that meets the basic needs of people be it the need for clean water, affordable housing and/or reliable transportation is lacking and underdeveloped. These are issues that both hinder the development of an economy and force its poorest members into a perpetual cycle of just making ends meet. The common issues highlighted for this malaise include the lack of transparency in funds being deployed, funds not reaching the projects at the right time and finally a lack of tracking mechanisms to track whether the funds were utilized for the given purpose.
The development of blockchain solutions offer a new paradigm in ways that issues of transparency and accountability around Infrastructure Development financing can be mitigated. Blockchain solutions through the integration with Smart Contracts offer a mechanism to keep track of different sources of money flowing into the project as well provide the ability to create smart contracts that can enable the correct payments only when pre-defined project conditions are met. These features will also enable the rise of a community driven funding model where-in participants can through micro-payments both participate in contributing to their community’s infrastructure development and at the same time ensure contractors are held accountable for delays and defects through smart contracts.
Consider the following real-life scenario, a village in rural India that has been waiting for the start of a river crossing bridge for many decades since independence. The completion of this bridge would represent an opportunity for both commerce and education, yet the project has been stuck in the bushes for many years due to mismanagement of direct state government funds, funds allocated by charitable organizations and a lack of accountability on the part of contractors. A blockchain solution which creates a system of transparency and accountability creates incentives for all stakeholders to participate equally and foster trust amongst actors who traditionally don’t trust each other. In our example, a blockchain solution would enable all stakeholders to effectively be tracked on when and where the funds were utilized as well as enable citizens to pitch in the development of this community infrastructure through micro-payments. In case of defects or delays on the part of contractors, these can be traced back more easily due to the implementation of smart contracts and thus contractors penalized fairly.
Though the use of Blockchain solutions in the International Development space is an emerging field. There are many startups which aim to utilize its benefits specifically in the realm of aid tracking and which have started to deploy products. Two notable startups include “Aid:Tech” which was able to deliver aid to Syrian refugees through its blockchain solution and “Disberse” which has done a pilot project on education in Swaziland.
In the words of Gordon Brown, former UK PM – “We have to find ways to finance infrastructure that gets it done fast and creates a return.”. Blockchain solutions will enable us to achieve this paradigm quicker and in a equitable way that creates lasting value for all stakeholders.
Originally Published on LinkedIn: https://www.linkedin.com/pulse/use-blockchain-drive-transparency-infrastructure-puranjay-mahapatra/
The Lucid Monk 