Trusts specialized in popular economy

Overcoming harsh conditions that today overwhelm and maintain popular economy cornered demands establishing an effective support system, including developers of popular-base associative ventures and trusts specialized in funding them with a combination of investment and credit

Popular economy tends to be seen as a reserve where the poor and marginalized survive without considering the undeserved punishment they bear or recognizing the social and productive potential of such space. If there were the determination to materialize such potential, ventures of the popular economy, particularly those of medium scale and associative base, would need to access similar organizational, financial, technological and management conditions as those of any other medium enterprise.

These lines complement the article: Popular economy, strategic space for a more equitable economic order focusing on the critical role that might play a fund dedicated to invest in the popular economy. It is about establishing trusts that help transforming popular economy into sustainable socioeconomic spaces. That is, that can grow and be sustainable over time, without having as sole main interest to favor their investors. On the contrary, everybody who participates in the productive activity, investors included, would receive fair compensations. The basic criterion is that economic results matter but also social and environmental effects over the communities in which they operate.

Some of the most significant traits of these trusts are:

  • Their foundational purpose is to fund ventures of the popular economy, especially those of medium size and associative base. This includes first and second-degree cooperatives, consortiums of small producers for buying supplies and market their productions, locomotive agro-industries, popular franchises, bankrupted enterprises recuperated by their workers, networks of artisan workshops, among many other modalities.
  • Trusts will be capitalized through diverse sources of funding, according to each country’s circumstances, trying to converge public, private, and development organizations.
  • Ownership and management structures of the trust can adopt different forms, though always assuring the ongoing validity of the mandate by which it was created.
  • The management level of these trusts should count on representatives of the contributors as well as organizations of the popular economy.
  • Trust contributors would provide not only financial resources but also their talent, creativity, experience and connections.
  • The initial group of contributors of the trust could form an Advisory Board to promote the participation of other contributors they could mobilize.
  • The trust could do two types of operations: (i) an investment line in the capital of ventures with associative base from the popular economy (either permanent or transitory until it can be buyout by the own producers or their organizations) and (ii) an investment line to capitalize entities that provide credit for the popular economy.
  • The criteria for approving funding would combine economic sustainability with positive social and environmental effects. For their nature, these trusts specialized in the popular economy would have a promotional mandate for allocating resources, what does not mean grants or sunk costs. It is critical to secure the ongoing sustainability of trusts.
  • Operation of these trusts does not require numerous administrative staff as they would work in coordination with developers of associative-base ventures from the popular economy. The role of these developers is to support establishing and developing these productive initiatives, most of which could apply to trusts’ funding. If deemed necessary, the trust could designate representatives in the boards of some of those ventures that receive their funding.
  • Financed operations would be monitored in real time by an appropriate informatics system and follow up meetings.

Impact of this type of initiative

Establishing developers and trusts that support popular economy would be an important step towards helping populations that are harshly punished by facilitating dignified jobs and incomes for achieving better living conditions. It is an important part of efforts to make up for the opprobrium inferred over large population sectors. No society can develop freely and in peace while gazing away from those who are left unprotected in poverty and indigence. An economic system that includes all and a firm commitment to protect the environment are necessary conditions for a country to grow with fairness and equality. Even then, it is impossible to ignore that the concentrating process that prevails in almost every country will continue to condition this and any other transforming initiative.

Such adverse context does not detracts value from the efforts used for exploring more equitable development paths. Instead, it warns us that national sustainability can only be asserted in higher-level interventions, indispensable for dismantling the engines that support concentration and their terrible consequences. Critical economic, social, cultural and environmental decisions need to be made, such as regulating speculative capital flows that do not generate wealth but rather appropriate the value produced by others, establishing progressive tax structures to secure contributive fairness, public spending allocations for strategic initiatives and population sectors in need. As well as transforming productive matrix to make it sustainable and value chains to secure equality for everybody that makes them possible, decolonizing minds and subjectivity formatting, overcoming cultural submission, demanding legitimacy to our representatives, caring for Mother Earth, firmly fighting against every type of corruption and impunity of the powerful.

There are not few challenges or working fronts to address. It was always like that, since the dawn of humanity there always has been a search for better ways of being and living in community. Only this time, it is our turn to move forward, taking either long or short steps. In such search is where the transforming support for the popular economy is placed.

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