Co-ops & Human Sustainable Development: Global Perspective

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  This document has been made available in electronic format
      by the International Co-operative Alliance ICA
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            CO-OPERATIVES AND SUSTAINABLE HUMAN DEVELOPMENT
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                     THE GLOBAL PERSPECTIVE

The Concept of Sustainable Human Development 

During recent years the model of economic and social development
which guided activities in the 1970s and 1980s has been thrown
into question, not only in the countries of the South but in the
North as well.  The role of the state as stimulator of economic
growth and distributor of wealth is diminishing almost
everywhere.  Market considerations dominate economic life, but
at a cost of growing discrepancies between the rich and poor. 
Environmental degradation is no longer viewed as an acceptable
or necessary cost of economic growth.  Human needs and
aspirations are increasingly regarded as the essence of
development.

Out of all these considerations has emerged the concept of
Sustainable Development, and its slightly-refined version of
Sustainable Human Development.  The most frequently-quoted
definitions of both are as follows:

* "Sustainable Development is development that meets the needs
of the present without compromising the ability of future
generations to meet their own needs." (World Commission on
Environment and Development, the Brundtland Report)

* "Sustainable Human Development is the enlargement of people's
choices and capabilities through the formation of social capital
so as to meet as equitably as possible the needs of current
generations without compromising the needs of future ones." 
(United Nations Development Programme) The 1992 Rio Declaration
further elaborated upon the concept of Sustainable Development:

* "Principle 1: Human beings are at the centre of concerns for
sustainable development.  They are entitled to a healthy and
productive life in harmony with nature."

* "Principle 4: In order to achieve sustainable development,
environmental protection shall constitute an integral part of the
development process and cannot be considered in isolation from
it." 

* "Principle 5: All States and all people shall co-operate in the
essential task of eradicating poverty as an indispensable
requirement for sustainable development, in order to decrease the
disparities in standards of living and better meet the needs of
the majority of the people of the world."

>From the foregoing one can conclude that Sustainable Human
Development is an integrated concept of economic growth and
social justice designed to enhance both the current and future
potential to meet human needs and aspirations.  It is a concept
of development which is as relevant to the countries of the North
as it is to the countries of the South.  

The Important Role of Co-operatives

The relevance of co-operatives to Sustainable Development is
apparent - and even more so when one considers the concept of
Sustainable Human Development.  As organisations of people,
co-operatives are designed to help their members meet their
economic and social needs and aspirations.  As democratic and
participatory organisations, they encourage equity and equality. 
As economic entities, they provide their members with commercial
services.  As locally-rooted institutions, they reflect their
communities" concerns with social justice and the environment.
Hence it is not surprising that the United Nations
Secretary-General, in a 1994 Report to the General Assembly,
concluded that "co-operative enterprises provide the
organisational means whereby a significant proportion of humanity
is able to take into its own hands the tasks of creating
productive employment, overcoming poverty, and achieving social
integration".

In a background paper prepared for the UN World Summit on Social
Development in Copenhagen in 1995, the United Nations commented
further on the dimensions of the international co-operative
movement: "A total of 740 million women and men are currently
members of co-operative business enterprises associated through
national federations and unions which are members of the
International Co-operative Alliance.  It is estimated that the
total number of co-operators is 800 million persons worldwide,
with a further 100 million persons employed by co-operatives. 
Moreover, because the co-operative enterprise has economic
significance not only for members and employees, but also for
their immediate families, the total of persons whose livelihoods
are to a significant extent made secure by co-operative
enterprise approaches three billion people, half of the world's
population."

Co-operative members are found in developing countries (an
estimated 20 percent of the total population aged 15 to 60), in
transitional economies (39 percent), and in developed market
economies (33 percent).

A few statistics serve to indicate this growth and diversity:

*    Agricultural co-operatives market over 50 percent of many
commodities in the United States, Canada, Europe, Japan, India,
Brazil, Argentina, and Africa; 

*    Consumer co-operatives are among the top retailers in the
Nordic countries, Switzerland, Italy, and Japan;

*    Co-operative banks account for 17 percent of the savings
market in the European Union, while savings and credit
co-operatives include between 35 and 45 percent of the adult
population in Australia, Canada, Ireland, and the United States;

*    Worker-owned co-operatives provide employment for some 60
million members in India, Indonesia, China, and Europe; 

*   Service co-operatives are leaders in meeting the needs for
health care (Brazil), rural electrification (United States),
transport (Israel), and housing (Scandinavia).

The Economic Dimension of Co-operatives

The vast majority of co-operatives around the world are economic
enterprises, providing either consumer services (retail goods,
financial services, health care, housing, etc.) or producer
services (agricultural marketing, industrial and artisanal
production, etc.).  They are established when people have an
economic need that is not being adequately met.  By their very
nature they contribute to Sustainable Human Development.

The basis of co-operative success is that they provide economies
of scale.  They provide an institutional means whereby individual
people can group themselves into self-help units.  Through their
support structures at the secondary and tertiary levels, they
provide common services and generate income in a way that would
not otherwise be possible. The Latin American Confederation of
Savings and Credit Co-operatives (COLAC), for example, has been
able to obtain loans from the Inter-American Development Bank
which have enabled its 17 national member federations to improve
their lending services to their own affiliates.

Co-operatives also provide permanence.  As community-based,
locally-controlled institutions, they can never be tempted to
move where labour is cheaper or profit opportunities greater.  
As their purpose is to provide services to members, rather than
to generate profits for investors, they respond to market forces
in a different way than investor-owned businesses.

Historically, in both North and South, co-operatives have been
initiators of new services.   They have been pioneers in offering
financial services (daily interest by credit unions in Canada),
and in payment for agricultural products (twice-daily payments
by dairy co-operatives in India).  The original Rochdale
Pioneers" commitment to "pure food" has been continued with
considerable success by consumer co-operatives in Britain,
Scandinavia, Switzerland, and Japan.  

Co-operatives are important sources of competition in domestic
markets.  Often they develop when people seek alternatives to
markets that are dominated by private or public enterprises.  In
many countries of Africa, Asia, and Eastern Europe the previously
state-controlled insurance system is being opened to private
companies, and co-operative insurers are providing a range of
insurance services that was previously unavailable.

Above all, co-operatives generate increased income for their
members.  Farmers in both northern and southern countries have
first-hand experience in the benefits of collective marketing of
crops and purchasing of inputs.  Credit unions in Africa have
brought savings and loan services to rural areas for the first
time.  Consumer co-operatives in the Nordic countries are
offering bonus payments to increase member patronage.  

In all these ways, co-operatives contribute to productive
employment and economic growth - the first component of
Sustainable Human Development.  

The Social Dimension of Co-operatives

The social role of co-operatives has often been misunderstood and
misinterpreted.  In many developing countries, co-operatives have
been seen by governments as instruments to be used in the pursuit
of national objectives.  In communist-controlled states,
co-operative independence was limited for similar reasons.  Some
proponents of the "Social Economy" in Europe see co-operatives
as a modern tool to solve problems of unemployment and regional
disparity. 

In its "Statement on the Co-operative Identity" presented to its
Centennial Congress, the International Co-operative Alliance has
emphasised that co-operatives must respond to the needs of, and
be controlled by, their members.  The new principle on "Autonomy
and Independence" recognises that co-operatives may enter into
agreements with governments and other parties, but only if such
actions remain controlled by the members.

Once this principle is respected, co-operatives will by their
very nature play an important social role, depending on the
wishes and needs of their members.  From their origins,
co-operatives have been used by disadvantaged groups to promote
their common interests.  Indigenous people in remote rural areas,
refugees, migrants, unemployed persons, the elderly, and the
disabled have all found co-operatives a means of improving their
own situation.  

A fundamental co-operative principle is that membership is open,
without discrimination, to all who can contribute to and benefit
from the activities of a co-operative.  Most frequently,
disadvantaged persons join, and benefit from the activities of,
an existing co-operative, although there are examples of
successful co-operatives being formed exclusively by and for
specific social groups.

In addition to promoting social integration, co-operatives have
long been known as "schools for democracy".  Especially in
developing countries, they are often one of the few institutions
which provide an opportunity for participatory democracy.  The
on-going education and training programmes carried out by many
co-operatives are another important contribution towards human
resource development.

Although co-operatives cannot claim that their involvement of
women has been significantly better than that of the societies
in which they exist, there are many examples of housing, health,
child-care, savings-credit, and retail co-operatives that have
been particularly sensitive to the needs of women.  Some
organisations, such as Folksam Insurance in Sweden, have shown
themselves to be a national leaders in their policies towards
women both as customers and as employees.  

Social integration, education and training, community
development, and gender equality are all ways in which
co-operatives contribute to social development - the second
pillar of Sustainable Human Development. 

Community Concern and the Environment

As locally-based institutions, co-operatives are naturally
concerned about the communities in which their members live. 
This local orientation is a characteristic which often
distinguishes co-operatives from investor-owned businesses, and
has become such an important feature that the ICA has now
proposed that it be regarded as a basic co-operative principle.

Community development is a concern of many co-operatives.  The
Desjardins Caisse Populaire Mouvement, the largest financial
institution in Quebec, has joined with employers" associations
and local governments to stimulate local entrepreneurs through
12 regional investment corporations.  In the United States,
three-quarters of the rural electricity co-operatives promote
rural community development programmes.  In northern Sweden local
governments and co-operative development institutions have
supported the creation of new co-operative enterprises.  Many
co-operatives throughout the developing world have decided to
allocate a portion of their annual surplus to community causes.
In recent years co-operatives have expressed their concern for
community through increasingly active programmes of environmental
protection.  Consumer co-operatives in Britain, Scandinavia, and
Switzerland have become market leaders in their efforts to
develop natural products and reduce environmental waste. 

In Japan all co-operative sectors - agriculture, fisheries,
forestry, and consumers - have committed themselves to supporting
environmental conservation not only through their corporate
practises but also by active membership education campaigns. 
Since 1988 the agricultural co-operatives have been committed to
"3-H Agriculture" - healthy, high quality, and high technology. 
The consumers co-operatives have adopted a uniform slogan of "Let
us Watch our Life and the Earth", and have developed more than
180 environmentally-friendly products.

Agricultural co-operatives in Brazil, fertilizer co-operatives
in India, and tree-growers" co-operatives in Thailand are all
actively engaged in environmental protection.  In China the
co-operatives have used their extensive marketing and supply
network to become the country's leader in waste resource
recovery. 

The 1992 UN Conference on the Environment and Development in Rio
de Janeiro helped to focus the attention of co-operatives, like
other members of the civil society, on the global dimensions of
sustainable development.  Following the adoption of the Agenda
21 in Rio, the ICA took the initiative in preparing a
"Co-operative Agenda 21" which would show how co-operatives
intended to apply the Rio guidelines and policies in their own
activities.  Many member organisations and specialised bodies
have contributed to this document.

Through their concern for community and the environment,
co-operatives are actively engaged in the third key component of
Sustainable Human Development.

Implications for the Future

If the concept of Sustainable Human Development does in fact
become the major development model of the future, the impact on
co-operatives can only be positive.  Few, if any, other
organisations combine as well as do co-operatives the economic,
social, and community orientations upon which the concept is
based. 

Previous models of development - whether they emphasised large
infrastructure projects or charity, government direction or
market control - have been less well-suited to co-operatives
because they ignored or even undermined the basic co-operative
principles of member control and independence.  Many
co-operatives are still struggling to recover from the effect of
these well-intentioned but disastrous policies of the last two
decades.

As essentially economic institutions, co-operatives will benefit
from the emphasis on economic partnerships, trade, and
investment, in place of the previous emphasis on grants and
charity.  The onus will, however, be on co-operatives to ensure
that their capacity is equal to the challenge.  Education and
training programmes must emphasise the need for co-operatives to
be competitive and efficient in the market place.

Local and participatory approaches will also suit co-operatives
much more than large-scale projects.  The focus of co-operative
development will move increasingly to the grassroots level, where
it belongs.  In the process, however, co-operatives must not
forget their support organisations, since co-operation among
co-operatives will become even more important in the face of
large-scale national and international competition. 

                                          August 1995