12/08/2016
Co-operatives can play a key role in development
The social and economic benefits of co-operatives can have far reaching impact, but they need support from the development community to reach their potential
This year, 6 July marks the International Day of Co-operatives, a day which reminds the world that co-operatives are much more than your local shop, or a troubled bank. They are a dynamic people centered business model operating in more than 100 countries.
I stumbled into development by accident nearly 30 years ago when I got a job working with trade unions in India. Back then, travelling all over the country to teach about health and safety at work, I saw business as the problem. But gradually, I discovered another type of business that was run by its members, just like trade unions are (or should be): co-operatives.
They have been around for 200 years, since Robert Owen proposed "villages of co-operation" as a response to the economic crisis in 1815. The idea spread, was adapted, and went global, with around 1 billion members of co-operatives worldwide - far more than trade unions - in over 100 countries. After faith groups, they are one of the most common institutions at village level in Africa.
Co-operatives come in all shapes and sizes and all sectors of the economy. Snake catchers in India, prisoners in Ethiopia and taxi drivers in Rwanda are some diverse examples of co-operatives, and 75% of Fairtrade products are from farmers' co-operatives.
In the 1950s and 60s, co-operatives, particularly in Africa, were seen as major players in development, loaded down with expectations, as well as government interference. As a result, many failed, and co-operatives were written off by most development agencies.
In recent decades, co-operatives have made a comeback. We know that co-operatives can and do make major contributions to millennium development goals. They can generate income for their members and also offer a range of benefits – depending on why they are set up. In meeting their members needs co-operatives enhance incomes and secure livelihoods for their members and their communities.
Their role is again being recognized within the development community. Last year saw the UN International Year of Co-operatives. The UN's Food and Agricultural Organization sees co-operatives as key to feeding the world; the International Labor Organization as a way of organizing in the informal economy.
Co-operatives cannot provide the whole answer to global poverty and economic injustice, but they are certainly part of the answer, as they are part of a movement sharing a set of global values and principles.
With renewed attention brings challenges. The primary role of co-operatives is to meet their members' needs. Too often, they have been viewed as instruments for the delivery of the goals set by external agencies, such as governments and NGOs, and criticized for not reaching the poorest. We must let co-operatives be co-operatives, which are 'for profit' enterprises. Therefore, it is vital that there is respect for a co-operatives institutional integrity with their distinctive model of governance and enterprise, and their enshrined values and principles. The ILO Recommendation 193 set the international standards for this 'new' take on co-operatives, defining the roles for governments, co-operatives and labor unions as well as embedding co-operative values and principles at the heart of it all. There is an online guide to Recommendation 193 which I wrote several years ago, but still holds for most aspects.
Another main challenge facing many co-operatives is over-control and regulation by government. Co-operatives are often subject to more burdensome regulations than other private sector players with high cost and time burdens associated with setting up a co-operative. A robust legal environment with prudential regulation needs to protect democratic member control, autonomy and independence, and voluntary membership.
At the same time, many agencies working with co-operatives do not recognize or understand their specific governance and histories, for example attaining fair trade certification is a common one and for which the setting up of the co-operative is seen as a formality and not the labor intensive and time consuming process it actually is.
The Co-operative College ran a workshop several years ago in partnership with Oxfam about working with co-operatives. The aim was to provide an opportunity for information sharing and a briefing about co-operatives in the development context. The workshop was well attended and valued by the NGOs whose knowledge of cooperatives was limited.
Capacity building, training and education remain critical for co-operative development in the developed and developing world, and strengthening networks is crucial. There are a number of things that can be done:
• Education – whether in the developed or developing world co-op members and staff can benefit from co-operative values based education and training
• Recognize the existence of the local co-operative movement and existing co-operatives; become familiar with their history and challenges; and try to work with them. There are, for example, co-operative colleges operating across much of east, southern and west Africa who already work closely with their local movements.
• Co-operatives work better when they are networked, so encourage the formation of secondary co-operative networks (federations or unions) to help increase the performance of primary co-operatives.
• Help develop national co-operative structures, or apex bodies to represent the voice of co-operatives in engagement with government.
• Remember that cooperatives are both enterprises and associations of members and both aspects need supporting to reach a balanced form of co-operative development. Don't just use a single bottom line to assess the 'success' of a co-operative, as they deliver both social and economic benefits for their members.
• Use international networks as they can be invaluable. The ICA unites, represents and serves co-operatives worldwide. Some international bodies also represent different sectors, eg the World Council of Credit Unions and the International Co-operative and Mutual Insurance Federation.
Finally, as someone who has worked in and with the UK Co-operative College for many years, it’s worth remembering that co-operative members themselves value their own development as much as the income they gain from their co-operative.
Maybe we need to conceptualize co-operatives as a learning space as well as an enterprise. After all, education is one of the core co-operative principles. As the founder of the Mondragon co-operative in the Basque country, one of the most successful worker co-operatives in the world, Arizmendiarrieta, said: "co-operativism is an economic movement that uses education; we can also alter the definition, affirming that it is an educational movement that uses economic action."
Sarah Alldred is international programmes manager for the Cooperative College
SOURCE: Guardian professionals
