2012 - the International Year of Co-operatives:

Co-operatives, a global economic force

By Pramod DE SILVA

"Co-operatives are a reminder to the international community that it is possible to pursue both economic viability and social responsibility."

- United Nations Secretary-General Ban Ki-moon

Have you visited your local co-operative store lately? In Sri Lanka that would include more than 200 Sathosa (Co-operative Wholesale Establishment) outlets as well as local co-op stores in all parts of the island.

A Sathosa outlet

Incidentally, the Co-operatives Movement in Sri Lanka is exactly 100 years old and is very close to the people especially in the rural areas. A drive is under way in Sri Lanka to enrol more than 300,000 members to all co-operative societies. It is worth paying a visit to your local co-op and becoming a member.

What exactly is a co-operative? As the name implies, co-operatives are business enterprises owned and controlled by the members that they serve. A co-operative, according to the UN, is “an autonomous voluntary association of people who unite to meet common economic, social and cultural needs and aspirations, through a jointly owned and democratically controlled enterprise”.

Self-help, social responsibility and equality, democratic and participatory approach and concern for community – these are the main values and principles that underlie co-operatives. Their member-driven nature differentiates them from other forms of business into taking decisions balanced by the pursuit of profit with the needs and interests of members and their communities. Thus shopping at a co-op store benefits not only the consumer per se, but also the entire community, being a collective enterprise that boosts the local economy.

Credit grants

However, co-operatives need not necessarily focus on consumer goods. There are many co-operatives that grant credit to their members – Sri Lanka’s Sanasa Bank is an example. Sanasa is a Sinhala acronym for Co-operative Credit Society.

There are co-operatives that focus on education, transport and travel, agriculture, housing, fisheries, small and medium enterprises, health and hospitals, youth, insurance and rural development. Some co-operatives are called multi-purpose, because they deal with many of these needs. Co-operatives also play an important role in peace building and bridging ethnic divides.

Globally, there are more than one billion co-operative members in over 100 countries. That makes at least one in seven people a member of a co-operative. The Movement is believed to be among the fastest growing segments of the world economy.

Co-operatives all over the world will be under the spotlight this year, which has been designated by the UN as the International Year of Co-operatives.

Its aim is to increase awareness on co-operatives and promote the movement's successes and ideals of international solidarity, economic efficiency, equality, and world peace.

It will also focus on the contribution of co-operatives to socio-economic development, particularly their impact on poverty reduction, employment generation and social integration.

Events in this connection are organised worldwide by the International Co-operatives Alliance (ICA), Committee for the Promotion and Advancement of Co-operatives (COPAC), the United Nations and its various agencies.

There will be two main conferences and seminars that celebrate the Co-operatives Year. One will be held in England, the other in Canada. The Co-operatives World Festival and Expo will be held in Manchester, England from October 29 to November 2. The International Summit of Co-operatives will be held in Quebec, Canada from October 8 to 11.

It will focus on the Amazing Power of co-operatives, with six groundbreaking studies analysed.

Growth, establishment

These parleys will focus extensively on the theme for the Co-operatives Year:“Co-operative Enterprises Build a Better World”. With this theme, the UN also seeks to encourage the growth and establishment of co-operatives all over the world. It also encourages communities and governments to recognise the role of co-operatives in helping to achieve internationally agreed upon development goals, such as the Millennium Development Goals.

Sanasa Bank

“Co-operatives create, improve and protect the income and employment of their members and contribute to poverty reduction. Co-operatives support and promote small and medium enterprises in many sectors. This is how co-operatives can help create a better world,” said Felice Llamas, spokesman on co-operatives for the UN Department of Economic and Social Affairs.

“With their participatory and democratically based approach, co-operatives help empower women, youth, people with disabilities, older persons and indigenous peoples, thus promoting an inclusive society. These are all factors that help create a better world.

The world faces unstable financial systems and increased food insecurity, growing inequality and rapid climate change and environment degradation. Co-operatives offer a compelling model of economic enterprise that is relevant to today’s challenges,” he said.

While co-operatives are essential for developing countries, their role gets heightened attention in times of crises such as natural disasters. This was evident during the Indian Ocean tsunami of 2004. In fact, economic and social hardship is behind the very genesis of co-operatives.

“Historically, co-operatives have found their genesis in times of economic hardship,” said Sha Zukang, United Nations Under-Secretary-General for Economic and Social Affairs and Secretary-General of “Rio+20”, the United Nations Conference on Sustainable Development.

“This is a testament to their capacity to alleviate the effects of such crises. In fact, in the wake of the 2008-2009 global financial and economic crisis, financial co-operatives proved to be more resilient than their investor-owned counterparts.”

Co-operatives are a global economic force in their own right. In its 2008 Global 300 report on the largest co-operatives in the world, the International Co-operative Alliance, a non-profit group with 260 member organisations from 96 countries representing over one billion individuals, indicated that the top 300 co-operatives had an aggregate turnover of $1.1 trillion, comparable to roughly one-tenth of the gross domestic product (GDP) of the United States. Most of the 300 largest co-operatives are found in the developed economies of France, Germany, Japan, the Netherlands and the United States, with 30 percent engaged in the agriculture and food sectors, 23 percent in retailing, 22 percent in insurance and 19 percent in banking.

Prominent role

In developing countries, co-operatives play an even more prominent role. In 2009, Brazil’s (the sixth largest economy in the world) agricultural co-operatives exported $3.6 billion worth of produce. In Rwanda, a credit union system was rebuilt by the World Council of Credit Unions and there are currently 149 credit unions with an estimated 400,000 members.

In Sri Lanka, there are 305 Multi-purpose Co-op Societies with over four million members. There are 6,300 Thrift and Credit Co-op Societies with 1.3 million members. It is thus a sector that makes a formidable contribution to the local economy.

The Co-operatives Movement must do more to strengthen its role in society and membership. Youth must become the driving force of Co-operatives, which was the theme of last year’s World co-operatives Day in July. It can even pave the way for a political career for some of these youth. Innovation is another aspect the Co-operatives Movement must consider, in terms of innovative concepts for co-operatives that deviate from the usual norms of consumer goods and credit.

Sri Lanka’s Co-op Movement should come up with an attractive slogan such as those used in England recently – ‘Good for Everyone’ and ‘Join the Revolution’ which will entice more people to join in. The idea is that it is a revolution that everyone can participate in and everyone will benefit from.