Opinion Sur
An effective support system can transform the popular economy into a strategic pillar to achieve a fairer and more sustainable development in Latin America and Africa. It is necessary to complete the passage from the declarative to concrete actions of magnitude such as establishing trusts specialized in the popular economy and developers of enterprises of medium size and associative base, ensuring the participation at the managerial level of organizations of the popular economy.
The recognition of the popular economy, a long-standing reality hidden by those who dominate the countries, is growing uphill. Population that survives in that universe does so in harsh conditions with all kinds of social and productive deprivations. These are intolerable situations that require short- and medium-term solutions commensurate with the scale and gravity of what is being faced. Purely assistance solutions, although necessary, are not enough to reverse the acute shortage of critical factors mobilizing the capacity that nests in every popular sector. Support statements open a path that should immediately give way to concrete actions, combining investment in seed capital, financing of operating expenses, and assistance of excellence (not residual) to establish or reinforce grassroots ventures in promising sectors. All this with the participation at the managerial level of organizations of the popular economy. Drip actions do not work.
These lines move in that direction. They propose a strategy of rapid intervention based on two powerful instruments: trusts specialized in the popular economy together with the establishment of developers of popular-base enterprises. Indeed, it is not the only available option but it contributes some on its own.
A change of perspective
It is time to start by overcoming the perspective that conceives popular economy as a drag on national development. It is actually quite the opposite. If properly supported, popular economy can contribute substantially to giving way to a much fairer and more sustainable development. To do this, and as the rest of the economic system has, it needs access to resources and appropriate assistance. Petty support fails to mobilize this tremendous social asset.
Resources for the Popular Economy
The allocation of resources for a strategy of social reparation and mobilization of the various segments that make up popular economy is a political decision. There is no argument of scarcity of resources when tax evasion and flight of ill-gotten capital are many times higher than what is initially required to establish a trust aimed exclusively at serving the popular economy. Once the decision is taken, the trust can be formed within a few months.
A nationwide Trust will vary by country size. If it were a relatively large country, it could start with a funding of 200 million dollars in local currency and, to the extent that it consolidates and demonstrates its effectiveness, it will be appropriate to scale the allocation to the equivalent of one billion dollars, and from there on out. We are talking about this scale. For smaller countries the trust funding would be adjusted accordingly.
The contribution of the National State would really constitute an investment since it would be more than recovered through the expansion of the tax base (taxes and contributions to social security) once the consolidation phase of the financed ventures has passed.
The trust’s allocations, channeled by regional delegations, would seek to leverage resources from other private and public actors to finance projects that were located in their areas of influence; among others, provincial and municipal governments, development organizations, universities, local and foreign financial entities.
The Trust would invest in seed capital for enterprises of medium size and associative base of the popular economy and in subsequent phases of consolidation. It would also allocate resources to local entities that finance working capital.
The cost of the Trust would be modest since its operation would rely on the actions of the developers and use existing state infrastructure.
Excellence assistance for the popular economy
Trusts specialized in popular economy are a necessary but not sufficient condition to mobilize the potential of the popular economy. It is also necessary to have teams capable of identifying promising opportunities of which new or existing grassroots ventures could take advantage. It is useless to keep popular economy cornered in productive activities of subsistence or of very poor perspective.
One possibility would be to establish what we call developers of the popular economy that would have a small team of good experience in forming and developing enterprises of medium size and associative base. Their work would include assisting these enterprises in commercial, technological, labor and management development by seeking to expand the scale of operation so that they can insert themselves into promising value chains.
With famines spreading around the world, it is a top priority to support the popular economy to increase food production. It is possible to do this in very short term by providing land near population centers and inputs to small producers associated with cooperatives that collect and market food in popular outlets. This can be done in the vicinity of small, intermediate, and large cities. It is a work of humanitarian emergency that if done well can then become permanent. While a trust can provide the financing, the developers would help to effectively deploy the implementation of the operation.
Another priority is to add the popular economy to the export and import substitution effort. The medium scale of new or existing ventures would make it possible to take advantage of niche markets that large companies do not know or do not have the capacity to access and develop. For this, they will need the financial support and assistance of excellence. Excellence does not have to accompany only large companies but rather, adapted to medium production, must be at the heart of the actions of the developers who support popular economy.
Beyond these capital priorities, there are also opportunities to serve the expanding market of popular economy itself. There are many and diverse so only a few are listed as examples: participate in planning and development actions of precarious settlements, software ventures, clinical laboratories and tomography centers, product delivery cooperatives, care centers for the elderly and children, agencies to pay bills and transfer money.
The support of developers in specific initiatives can be reinforced by bringing together experts from science and technology entities in industrial, agricultural, or knowledge development. This flexible structure will allow developers to operate with small budgets that would be covered in part by their fees and contributions from the national trust and other provincial actors or municipalities.
Developers would act as technical arms of popular organizations that would participate in their governing councils. This combination of existing leadership in the popular economy and experts who contribute their experience allows us to respond to the uniqueness of the challenge that is faced. The organizing criteria of these grassroots ventures is not limited to only maximizing their profit but, at the same time, favoring their communities. This implies a significant propositional differentiation in contexts where solidarity and the common good are overwhelmed by cultures focused on greed and selfishness . Hence, developers must be made up of teams that combine experience in leading productive units and serving their communities.
In short, it can be understood how difficult it is for sectors attacked and mired in poverty to conceive and take advantage of work opportunities in promising spaces. It is not about ignorance or lack of talent but, due to the conditions in which they live, these opportunities are distant and difficult to take advantage of. Popular economy demands rights and terms to enable it to be fully integrated into the national functioning. Hence the requirement for excellence assistance, both for reasons of justice and equity and because in the popular economy nests a hold up productive capacity and for developing knowledge and culture. If these populations were to access the same conditions as the rest of society, they would add their contribution to the development of the country, contributing to strengthening social understanding and citizen security. It is clear that crumbs that reproduce misery do not work. Much of the future of our countries is at stake here.
