The participation of people living in poverty in policies to improve their livelihood and counteract social exclusion and vulnerability is increasingly emphasized in poverty reduction strategies. Village self-help groups, farmer-owned businesses, savings and loan associations and other forms of memberdriven community organizations are frequently advocated as effective means of organizing to meet the needs of workers and entrepreneurs in the rural and urban informal economies. Capacity building, improvements in literacy and health, opportunities for income generation, access to existing institutions and public services, policy advocacy – all depend on there being some kind of cooperative organization of the poor on which to build. Why, then, are there so few explicit references to cooperatives in the literature on poverty reduction?
One of the main reasons is that the word “cooperative” has been badly misused in the recent past. In many countries, state-controlled “cooperatives”
failed to mobilize members, who perceived them as being controlled by government-appointed managers. The cooperative vision of enlarging the economic power of individual members through membership-driven entrepreneurship was devalued and discredited. However, the rich legacy of cooperatives and its value to community-based models of sustainable development should not be discarded. Development strategies need to rediscover cooperation as a model for local development. The 90th Session of the International Labour Conference adopted the Promotion of Cooperatives Recommendation, 2002 (No. 193), providing a framework for the renewed growth of the movement.
Cooperatives are in fact a very significant part of the global economy.
Ranging from small-scale to multi-million dollar businesses across the globe, they are estimated to employ more than 100 million women and men and have more than 800 million individual members. Because cooperatives are owned by those who use their services, their decisions balance the need for profitability with the wider interests of the community. They also foster economic fairness by ensuring equal access to markets and services for their members, with membership being open and voluntary. Cooperatives mainly operate in agricultural marketing and supply, finance, wholesale and retailing, health care, housing and insurance. This is a strong base to build on.
The ILO has had a close relationship with the cooperative movement since its earliest days. Because they are both enterprises and associations, cooperatives bring together in very practical ways the vision of social organization to create opportunities for decent work as a key to individual and community well-being. The work of the ILO is thus focused on providing individuals, communities and micro-enterprises with the organizational tools that enable them to help themselves through collective action and mutual assistance.
This approach has proved to be particularly appropriate for indigenous communities, and the ILO has a special programme (the INDISCO programme) targeting the needs of this group of the poorest of the poor.
The core tools cooperatives need in order to flourish are advice on capacity building, entrepreneurship development, leadership training, market research, accessing loan finance and grant aid, inter-cooperative networking, and federation building. For such grass-roots support to work effectively, cooperatives need a secure legal framework governing their status.
Since 1994, the ILO has assisted over 60 member States in reforming cooperative policy and legislation and equipping teams of national experts to provide practical assistance to new and existing cooperatives.
The ILO programme on organizational and cooperative support to grass-roots initiatives (ACOPAM) implemented in Burkina Faso, Cape Verde, Mali, Mauritania, Niger and Senegal exemplifies what cooperatives can do where they have the support of government policies and a secure legal environment. Over a period of 20 years, more than 85,000 men and women in rural areas, in over 2,000 grass-roots organizations, benefited from the programme. The objective was to enable producers to express and defend their interests by helping them adapt their organization to the changing needs and different experiences and know-how of the members. In practical terms, the cooperative structure ensured that local people were in charge and decided what was to be done and how to use the external experts and extension workers available to them through the project. The main areas of intervention were self-managed cotton markets, village cereal banks, women’s savings and credit schemes, community irrigation and land management schemes, and mutual health insurance schemes.
Cooperatives empower people by enabling even the poorest segments of the population to participate in economic progress; they create job opportunities for those who have skills but little or no capital; and they provide protection by organizing mutual help in communities. Furthermore, by creating a platform for local development initiatives they bring together a range of community institutions to foster opportunities for decent work and social inclusion. Cooperative members learn from each other, innovate together and, by increasing control over livelihoods, restore the dignity that the experience of poverty destroys.
To learn more about this author, visit International Labour Organization's Website.
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