Deciphering systems of social finance is essential for the creation of a solidarity economy. To learn about Brazil’s experience in social finance, the Centre for Human Dignity and Development, Impact and Policy Research Institute (IMPRI) and the Centre for Development, Communication and Studies (CDECS), Jaipur, organised a talk on ‘Social Economy and Social Finance’ by Professor Leandro Morais as part of its series on ‘The State of Development Discourses #CohesiveDevelopment’.
Prof Sunil Ray Former Director, AN Sinha Institute of Social Studies, Patna, began the session by questioning the persistence of the present development paradigm that has not shown success on the ecological and humane front. The focus on individual interest and incentives in this paradigm has diluted our understanding of the collective.
Prof Leandro Morais, Professor and Researcher, Department of Economics, Sao Paulo State University (UNESP), Brazil, introduced the ideas of a Social and Solidarity Economy (SSE) and South-South and Triangular Cooperation (SSTC) as collective practices of sustainable development that work towards building a more just and egalitarian world.
However, SSE practices are marked by structural weaknesses, mainly in finance. For SSE organisations to exist and for decent work to be generated, social finance is critical. Social finance can take the form of solidarity exchanges, credit cooperatives, social currency etc. SSE, Social Finance, SSTC, SDG and LED, all exhibit similarities and connections like involving new productive behaviors within territory, being based on partnerships, bottom-up action and cooperation.
Prof Morais spoke about the Brazilian communitarian development bank and social currency Mumbuca, and the sovereign wealth fund worth $35.7 million that facilitates the participation of the poorer sections in the Mumbuca city in the financial market. The income from this fund will grow to help the city engage in critical development projects at lower costs of capital while guaranteeing key social programmes in perpetuity. The Mumbuca programme works along with other programmes of citizenship income, and food and nutritional security, among others.
The key elements for the success of a local development programme include social control, good governance management, robustness, public policy and extensive articulation with the local private sector. The Mumbuca programme can also be seen alongside many SDGs like poverty eradication, zero hunger, gender equality etc. Many countries are considering reapplications of Mumbuca to generate work and income, and involve young people and economic dynamism in their territories. SSEs need the appropriate ecosystem to function — knowledge, market access, public and fiscal support, access to financial support, instruments to support networks and mutual support, and development of research and qualification in the area. Prof Morais expressed his interest to learn from and discuss India’s experiences in social finance.
Prof Ajit K Pande Professor, Department of Sociology, Banaras Hindu University, Varanasi, remarked that the historical trajectory of capitalist development had failed. He said the organised working classes had become structurally fragmented and were retracting to democratic frameworks over socialism. The Marxist theory of transition to socialism had not come about yet. The limits to the development paradigm were visible and its continuing relevance should be questioned.
Its many limits arise since it is a productivist paradigm; it fails to construct a holistic conception of society, fundamentally miscalculates the relationship between social stratification and political agency, lacks an adequate theory of the modern state, fatally underestimates democracy, and relies on an evolutionary model of history underscored by unacceptable normative presuppositions. Prof Pande contended that ultimately, all problems can be explained by to social pathologies of political demoralisation and social polarisation, which needed to be done away with.
Dr Meghadeepa Chakraborty, Assistant Professor, TATA Institute of Social Sciences (TISS), Mumbai, remarked that models of social finance were practised in some form or the other by many communities. In situations of crisis, community networks often come together to bridge financial problems, but these values aren’t built into theory at the macro level. Trust acts as a building block for networks of solidarity through economic interaction. Collaboration and cooperation are essential for an economy.
Dr Rajendra Paramanik, Assistant Professor, Indian Institute of Technology (IIT), Patna, spoke about the importance of social finance in the post-pandemic world that is going to be plagued by unemployment. The digital divide in the developing countries would lead to high levels of unemployment among marginalised sections.
Prof Morais reiterated the relevance of social finance in the post-pandemic world. Community networks encourage public participation and social finance helps these networks to sustain themselves. He emphasised that another context, another economy and another reality are possible if we are willing to engage with the possibility.
Acknowledgement: Sonali Pan is a Research Intern at IMPRI.
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