Inclusion or Alternative? the Solidarity Economy Movement in Northeast Brazil through the Experience of the Palmas Bank in Conjunto Palmeiras, Fortaleza

Social economy is synonymous in Brazil with the concept of solidarity economy representing the institutionalized form of the social movement with the same name, co-opted by the Brazilian state. For the Brazilian state solidarity economy includes all small scale economic practices characterized by local management of resources such as local marketplaces, cooperatives, community banks giving access to micro-loans, local currencies  (de Salles Oliveira 2008) or training for the less skilled local workforce. Incorporation at state level of the "solidarity economy" movement came in Brazil with the creation of the Directorate for Solidarity Economy (SENAES) under the Workers' Party government in 2002. One of the SENAES's projects is the creation a network of community banks. The most famous of these banks in Northeastern Brazil, historically the poorest region of the country, is the Palmas Bank situated in Conjunto Palmeiras, the poorest of the neighborhoods of Fortaleza, in the state of Ceará.  The Palmas Bank became, in its 18 years of functioning, the most popular project of this type in Latin America, especially thanks to the very popular local currency Palma (Seyfang and Longhurst 2013). Today Conjunto Palmeiras is the poorest  (IPCE 2015) and one of the most violent (Mapa da Criminalidade e da Violencia em Fortaleza- Perfil da SER VI 2011) of the 117 neighborhoods of Fortaleza, the 5th most unequal city in the world (UN, 2010).  The creation of the Palmas Bank stands on a long term history of community organization that started in 1973 when communities have been displaced here from the coastal areas of the city. The main question this paper asks is: how can the impact of the solidarity economy practiced be understood in Conjunto Palmeiras considering this context of extreme poverty and violence?  Solidarity economy in theory and discourse is opposed to the capitalist logic and it proposes a model of local production and local consumption but can this be possible if the neighborhood's economy relies on the larger economy of the city? I state here that in the best case solidarity economy can be seen as a social inclusion mechanism, a complementary source of income for the economically marginal segment of the population, rather than an "alternative" way of doing economy.

Based on 12 months of ethnographic fieldwork in Conjunto Palmeiras between January and December 2015 and a scoping research visit in 2013 this paper present the preliminary results to these questions. The data collection strategies I used include both participant and non-participant observation, focus groups (2) and semi-structured interviews with community members (35) and community leaders and employees at the Palmas Bank (7).  Despite the enthusiasm both social scientists and the development community have showed for this "alternative", "social" economic strategies I state that in Conjunto Palmeiras today the solidarity economy practices can  be understood as a social inclusion mechanism for the socially and economically excluded instead of a set of alternative economic practices that could have the potential of totally replacing the functioning of the current economy. This is because the neighborhood's economy relies greatly on the economy of the city, whose economy is the only one able to absorb the existing work force as well as the locally created products of small businesses.

In this research I paid a special attention to the functioning of the training classes and to the micro-credit programs, the only programs existing so far in practice at the Palmas Bank. The short history of the local currency Palma clearly pointed to the limited potential this economic practice had formerly. The currency ended up having a short circuit in the community always being accumulated in local business that could not trade it with other economic partners from outside the neighborhood.  For nine months I have taught English classes at the Palmas Bank for young people as well as women beneficiaries of the national conditional cash transfer program, Bolsa Familia. This experience too contributed to the understanding that for beneficiaries these programs are but one of many strategies they use to procure a job in the formal market, and to eventually create more stable livelihoods.  The same could be said about the local people employed in the solidarity economy sector, as public employees, since the sector's function is almost entirely supported by SENAES. For these people, the Palmas Bank fills a gap in the local precarious job market for educated professionals. 

A larger scale analysis of the functioning of the solidarity economy projects over time showed that a few factors challenged their potential to respond to the needs of the people in Conjunto Palmeiras. These factors contributed to "splitting" the "community" into different sectors, and challenge the main assumptions of the movement:  trust, cooperation, mutual-help and participation in community work. Some of these factors are: a rapid population increase resulting from internal migration, increased violence induced by the drug traffic, local governance relying on clientelism and patronage networks, the spread of different religious groups, the decentralization efforts of the Catholic church, as well as the weakening of the  Basic Ecclesiastic Community (CBS) movement that had a historical impact on community organization. All these lead to slowly eroding the historical organization work conducted since 1973 by the Association of Inhabitants and later on by  the Palmas Bank too.

All this points to the limited capacity of the institutionalized solidarity movement and economic practices to effectively address structural problems such as chronic poverty and violence, without other large scale, state supported initiatives such as major investments in health and education. This work also contributes to challenging the ungrounded enthusiasm and the  belief in the development potential of the "alternative" economy practices shared by many academics, NGO activists, and development practitioners at state and international level.