To better understand the financial dimensions pertaining to the social and solidarity economy (SSE), which is beginning to gain visibility within the UN system and beyond, a workshop on "Social and Solidarity Finance, tensions, opportunities and transformative potential," was held on 11-12 May 2015 in Geneva, and organized by the United Nations Research Institute for Social Development (UNRISD), in collaboration with the International Labour Organization (ILO) and the Friedrich-Ebert-Stiftung. Together, more than 25 experts, academics, practitioners and other participants shared a variety of perspectives to build knowledge on social and solidarity finance (SSF). The workshop also hosted the 9th meeting of the United Nations Inter-Agency Task Force on Social and Solidarity Economy.
What is Social and Solidarity Finance (SSF)?
Recent financial crises have brought to light the social and environmental harm caused by the inherent instability of the financial system. In the search for alternatives, some policy makers, researchers and United Nations agencies are directing their attention to social and solidarity finance (SSF) — a range of financial arrangements that operate based on solidarity. These schemes include exchange and financial mechanisms based on collective self-organization through which people manage their resources according to principles of solidarity, reciprocity, autonomy, trust and mutual aid. SSF encompasses ethical banking, financial cooperatives, community development banks, solidarity microfinance, complementary currencies, community-based savings schemes, participatory budgeting, crowdfunding, and arguably social impact bonds and impact investing.
The concept note for the workshop suggests that: “Social and solidarity financial mechanisms aim to (i) democratize access to finance; (ii) reinsert values and practices of solidarity and reciprocity into the financial sphere; and (iii) foster local economic development and iv) boost community-building.”
According to Amélie Artis, University Science Po Grenoble, SSF cannot be limited to a product, a community or an organization, it is a system characterized by a network of complex forms of financial relations and social links based on trust and financial exchanges. It is a learning space where many diverse players interact under the same goals, rules and risk sharing. Ms. Artis acknowledged that this matrix was dynamic, as rules are constantly influenced by environment and enriched by connections, and as new players increasingly enter the financial landscape.
For Anup Dash, Utkal University of India, SSF is a paradigm that needs established "policies, standards and language." SSF is transforming rapidly and represents the "next economy" rather than the "loser of capitalism." This next economy invokes a new rationality and values by choosing "cooperation" over "competition." Individuality is substituted by multiple approaches that are equally taken into account, he stipulated.
"SSE is not the economy of the poor but a legitimate component of the economy" said Jean- Louis Laville, Conservatoire National des Arts et Métiers (CNAM), France.
Sarah Cook, Director of UNRISD, reminded the audience of the different initiatives undertaken by the UN system and other organizations to overcome global challenges such as austerity, exclusion and inequality. The concept of SSE has been recently recognized to be an innovative model, especially against social exclusion.
• In 2003, the ILO Promotion of Cooperatives Recommendation, No. 193, stipulated that: “A balanced society necessitates the existence of strong public and private sectors, as well as a strong cooperative, mutual … social and non-governmental sector.”
• In 2008, the unanimously adopted Declaration on Social Justice for a Fair Globalization recognized a strong social economy as critical to sustainable economic development and employment opportunities, along with productive, profitable and sustainable enterprises and a viable public sector.
• Since 2010, the ILO has held three “Social and Solidarity Academy” meetings in Turin, Montreal, Agadir and Campinas. Several ILO Decent Work Country Programmes and technical cooperation projects have been promoting cooperatives and other social and solidarity economy enterprises generating youth employment, strengthening rural employment and addressing the informal economy.
• A three day Conference on the potential and limits of SSE, held in Geneva on 6-8 May 2013 and organized by the ILO and UNRISD, in cooperation with UN-NGLS, aimed at a deeper understanding of what SSE enterprises and organizations can offer to secure the expansion of decent and productive employment opportunities in a sustainable framework. This conference resulted in research documenting and analysis collecting thinking, practices and experiences on the ground around the world, thus bringing to light alternative sharing economic arrangements, Sarah Cook mentioned.
• The 5th edition of the ILO Academy on Social and Solidarity Economy, an interregional training programme gathering practitioners and policymakers from all around the world, to share their experiences and meet leading SSE specialists, will be held in Johannesburg, South Africa, from 27th to 31st July 2015, noted Jürgen Schwettmann, Director of the Partnerships and Field Support Department (PARDEV) at ILO. Furthermore, the SSE Academy created a “South-South Meeting Point” which is an interactive space where people from different countries can meet, engage, exchange and cooperate on the field of SSE within the perspective of South-South cooperation.
Broader United Nations initiatives
Since many international processes are currently taking place, according to Hubert Schillinger, Director of the Geneva office of Friedrich-Ebert-Stiftung, it is timely and judicious to shed light on SSF and implement its concepts in international development policy frameworks, with the objective of coming up with alternative solutions to the current system.
Participants highly advocated for the improvement of SSF visibility into the UN system and development policy discussions. They called for greater insight and for the transfer of SSF goals into the Financing for Development (FfD) and Post-2015 processes, especially during:
• The third International Conference on Financing for Development, which will be held in Addis Ababa, Ethiopia, from 13 to 16 July 2015.
• The United Nations Summit for the adoption of the post-2015 development agenda, which will be held in New York from 25 to 27 September 2015, and convened as a high-level plenary meeting of the General Assembly.
• The Climate Summit in Paris, 6 December 2015.
Sarah Cook raised attention on the role of the UN and particularly the UN Inter-Agency Task Force on Social and Solidarity Economy (TFSSE) created on 30 September 2013 in Geneva. TFSSE brings together UN agencies - among others ILO, UNRISD and UN-NGLS - and other intergovernmental organizations with a direct interest in SSE, as well as associations of international SSE networks. The Task Force aims at enhancing the recognition of SSE enterprises and organizations; promoting knowledge on SSE and consolidate SSE networks; supporting the establishment of an enabling institutional and policy environment for SSE; and finally ensuring coordination of international efforts and strengthening and establishing partnerships. In doing so, the Task Force has published a Position Paper illustrating the potential of SSE to address the multiple economic, social and environmental dimensions of sustainable development.
Limits and recommendations
Participants deplored that SSE and SSF was still not sufficiently present in international political debates and policy. Access to finance for SSE organizations is challenging; therefore, to guarantee social inclusion for vulnerable groups, SSF has to be multi-stakeholder and governments must come on board to set out enabling public policy frameworks, Nathanael Ojong, World Bank Group, Canada, suggested. Governments, as well as local authorities, must support strategies and programmes to build direct relations with poor people, recommended Solène Morvant from University of Geneva, Switzerland. However, SSE organizations must constantly and independently look for innovative ways to generate local resources, added Mr. Jem Bendell, University of Cumbria, United Kingdom.
Another major concern is social and economic exclusion. SSF's scope is narrower and broader than what is normally conceived and defined, argued Magdalena Vilarreal, Center for Advanced Research and Postgraduate Studies in Social Anthropology (CIESAS), Mexico. Some segments of population are still left out of the picture, especially women who lack education, access to resources, power, control over their lives, and self-help options, she deplored. Many vulnerabilities and gaps are omitted in the conventional economy such as household economy, non-commoditized forms of production and exchange; those so-called "informal" activities need to be measured and incorporated into the "real" economy.
Other topics, such as the benefits of South-South Triangular Cooperation, microfinance tools, and non-conventional financial schemes, including community complementary currencies, were proposed and discussed.
Conclusions of the workshop
This workshop has been successful in conceptualizing a common SSF and SSE framework, reversing some misleading assumptions restricting the economy to the market, Magdalena Vilarreal asserted. Different approaches ranging from gender to finance were put in common, thus allowing a better understanding of various concepts. The benefits of having a diversity of perspectives and contexts have been shown. But overall, interconnections, solidarity, 'people to people' approach and networks have been identified as SSF's core value. There is an urgent need to move from individual profits to common goals, and participants unanimously claimed for collective responsiveness.
Mr. Schwettmann said he believed this meeting was a timely opportunity to discuss, exchange, and share values and principles. It has drawn attention to an extraordinary diversity within the social and solidarity economy and to numerous initiatives undertaken around the world.
The workshop lead to the drafting of a sentence - which was then agreed upon by the Task Force members and observers – that they would like to see added to the Outcome Document of the upcoming Third Conference on Financing for Development to be held in Addis Ababa. The Task Force is currently disseminating the draft sentence. It is a tool for civil society organizations observers of the Task Force in their work of influencing the drafting process in the lead-up to Addis.
Furthermore, participants recommended establishing an advisory committee for the Task Force.
For more information about this workshop please contact:
Marie-Adélaïde Matheï from UNRISD
Please click here for more information.