An ICA Policy for Co-operative Development

    This document has been made available in electronic format
         by the International Co-operative Alliance ICA 
                         August, 1996

Source : An ICA Policy for Co-operative Development, Studies and
Reports, ICA, London, 1983, 28 pp. Hard copy available in French,
German, Spanish and Russian.

          An ICA Policy for Co-operative Development

I.   The Need for Co-operation...

In these times of unfulfilled hopes and aspirations, the
challenge to the world co-operative movement is greater than
probably ever before.

The arms race continues with unprecedented vigour, whereas
production for civilian purposes is declining. The gap between
rich and poor countries is widening, and so is the gap between
the privileged and the disadvantaged population groups in most

In the Third World, more than thirty per cent of the labour
force is unemployed or underemployed. The number of people
living in absolute poverty is approaching one billion. It is
estimated that 40,000 children die each day from starvation or
diseases aggravated by undernourishment.

These few data illustrate to what extent the world economy has
been distorted and social injustices have been sharpened. This
crisis has most severely hit the least developed countries and
the poorest strata of the population.

The prospects for improving the conditions are dark, as long
as large parts of the world's resources are wasted on
conflicts and unproductive armaments. Even under present
circumstances, however, it would be possible to alleviate much
suffering, to increase production and to pursue social justice
by vigorous efforts to bridge the gaps between rich and poor
countries. To this end, development strategies have to be

It has not proved possible for the large strata of the
population in rural areas and in urban slums of developing
countries to acquire a considerable and lasting improvement in
their living conditions through investment policies which
increase the wealth of the rich and in the hope that it will
`trickle down' to the poor. Nor are the limited benefits that
can be given to people through centrally administrated social
policies sufficient.

Economic and social progress must, to a large extent, grow
from grassroots levels by active involvement of the
disadvantaged groups themselves. Such popular participation in
development efforts can and should be facilitated by
appropriate legislation, by measures for increasing
productivity, e.g. land reform, and by other forms of `help to

The United Nations' Assembly has stated that `the
establishment and growth of co-operatives is one of the
important instruments for full economic, social and cultural
development of all members of the society'. It has also
stressed `the important role that co-operatives play in the
socio/economic development of developing countries' (see
Appendix 1). There is a great and growing need for truly
democratic, economically efficient co-operative movements in
the world of to-day and to-morrow.

Governments and Co-operators of Developing countries are
expressing their interest in making full use of co-operative
working methods and practices.

II.  Through Co-operatives

The International Co-operative Alliance is the non-
governmental organization representing the world co-operative
movement with its 360 million individual members. In this
capacity, it is the unique authority for formulation of co-
operative ideology and development policies at the global

In pursuance of the resolutions adopted by the 27th ICA
Congress in Moscow 1980 and by the ICA Central Committee
meeting in Rome 1982, this document endeavour to formulate a
policy for the ICA in its task to assist co-operative
development efforts in the Third World.

This policy covers the period up to the year 2000. There are
two reasons for choosing this time span:

a)   The United Nations Organization has set a number of
     socio/economic targets for the year 2000. Such targets
     include adequate nutrition, health for all, and other
     social benefits. It is understood that they can only be
     achieved by popular participation and self-help. The co-
     operative movement has a significant role to play in this
     development process.

b)   The Laidlaw Report to the Moscow Congress dealt with
     policies and developments up to the year 2000 with
     special emphasis on the contribution of the co-operative
     movement to development efforts.

III. ICA Support to Co-operative Development

1.   Objectives

     a)   The basic objective of the ICA policy on co-
          operative development is the establishment and
          growth of independent democratic and viable co-
          operative organizations, in which men and women
          participate on equal terms. These organizations must
          be capable of serving their members efficiently and
          contributing to economic growth and social equity in
          their respective communities and/or countries.

     b)   The ICA policy shall aim at strengthening
          collaboration between co-operative organizations of
          various types and in different countries, thereby
          promoting the growth of international solidarity,
          which is the foundation of a constructive peace.

     c)   The ICA shall endeavour to influence public opinion,
          national authorities and international organizations
          ins order to stimulate the growth of a favourable
          atmosphere for co-operation, promote the enactment
          of appropriate co-operative legislation and enlist
          the support of government and international
          organizations for the development of co-operative

2.   Fields of action

     a)   Food and Nutrition: Social emphasis in economic
          development in the Third World must be given to
          increased food production in combination with more
          efficient systems of food distribution and improved
          knowledge of food processing and utilization.

          There is ample evidence that land reform,
          supplemented with other means, can substantially
          increase productivity. In total, 600 million people
          in the rural areas of the developing world lack
          access to the land. As productivity in small labour-
          intensive farms is usually considerably higher than
          in the large estates, redistribution of land would
          be an effective means of increasing food production,
          especially if combined with agricultural co-
          operatives, fishery  co-operatives, productive and
          workers co-operatives, supported by saving and
          credit institutions. Development of the fishing
          industry is of great importance for the supply of

     b)   Urbanization and the Co-operative Movement: It is
          estimated that by the year 2000, more than half of
          the population in the Third World will live in urban
       communities. Due to the fact that migration from
          rural areas is added to the natural population
          increase, the growth of the cities is very rapid.
          The production of dwellings, water and sewage
          systems, as well as the installations of transport
          facilities, schools, retail stores, etc... do not
          keep up with escalating needs. Consequently a great
          and growing majority of the population will have to
          live in slums and shanty-towns.

          Slum improvement is one of the urgent policy areas
          in developing countries. This is a field where `help
          to self-help' is especially important and where
          there is a large scope for co-operative activities,
          not least in the fields of consumer credit and
          housing co-operation.

     c)   Employment and Industry: Co-operative organization,
          particularly in small and medium-scale industrial
          enterprises, offers a viable alternative to other
          forms of industrial organization. It is particularly
          appropriate to the application of labour-intensive
          productive techniques. Therefore, it is important to
          promote industrial producers' co-operatives, both in
          rural and urban areas. Industrial co-operatives in
          urban areas can offer income-generating
          opportunities for both men and women. Such co-
          operatives in rural areas can contribute to the
          provision of industrial products and at the same
          time reduce the migration into the cities.

     d)   Savings, Credit and Insurance: Development is not
          only a question of mobilizing human resources. It is
          also necessary to mobilize capital and to ensure a
          minimum degree of security against the risks of
          life. It is true that in many developing countries
          the State provides a certain amount of capital to
          co-operatives, in the form of grants and loans.
          Other sources of credit should also be identified.

          However, if a co-operative organization is to stand
          on its own feet and attain the necessary self-
          reliance, it has to raise a considerable part of the
          capital required from among its own members.

          Savings and credit co-operative societies, which
          have played and will continue to play an important
          role especially in strengthening the economic
          security of their members, at the same time provide
          capital for co-operative investments. Co-operative
          banks can make decisive contributions to the
          establishment and expansion of co-operative
          organizations in a financially sound way. The same
          is true of co-operative insurance societies.

     e)   Other types of Co-operatives: There is a great
          number of other co-operative organizations, for
          instance in the fields of handicrafts, processing,
          health and welfare services. Well managed they all
          satisfy important needs of the members and of the

          In this context, it is essential to mention the
          innumerable associations which are voluntary,
          democratic, self-help organizations formed in order
          to satisfy specific needs of their members - but
          which do not meet all the requirements for
          registration as co-operative movement. It may be a
          group which digs a well, acquires a hand pump and
          elects a person to be responsible for the
          maintenance of the pump. Such `pre-co-operatives'
          have been organized in great numbers by people -
          often among the poorest groups of the population -
          who join hands in solving common problems, be it in
          urban slums (e.g. sewage disposal) or in rural areas
          (irrigation, transport).

          These self-help groups are natural allies of the co-
          operative movement. There should be good
          opportunities for many of them to develop into
          formal co-operative organizations, given access to
          the necessary guidance and training. In all
          circumstances, however, the future will call for a
          great variety of co-operatives of all sizes as well
          as of pre-co-operatives.

3.   Priorities

     a)   Development towards Self-reliance: in most
          developing countries. governments pursue an active
          policy for the promotion of co-operative
          organizations in the frame of their own development
          plans. Their objectives are the growth of self-
          reliant co-operative movements. In order to achieve
          this goal, weaning procedures should be designed,
          which are acceptable to all parties. They should be
          in the form of time-bound plans for the transfer of
          functions - i.e. related to education and training -
          from state institutions to the movement. Such
          procedure shall be promoted and supported by ICA as
          a matter of high priority.

     b)   Democracy: A co-operative organization can ret€democratic way. This pre-
          supposes not only an effective democratic
          organization, but also - and no less indispensable -
          an enlightened membership. One of the high
          priorities for ICA shall be to encourage and assist
          member organizations in their endeavour to organize
          an effective and committing member education. Its
          resources have been very limited, but measures have
          been taken to increase the capacity in order to
          better meet the needs of member organizations. In
          educational activities stress should be laid on the
          involvement of women - a largely untapped resource
          in co-operative democracy.

     c)   Involvement of Women: In a true co-operative
          democracy men and women participate on equal terms.
          ICA shall assist in the attainment of this objective
          by influencing public opinion and by supporting
          programmes that aim at raising the status of women,
          e.g., by means of literacy campaigns, nutrition
          education, income generating projects for women,
          developing of thrift and loan societies. In all
          these fields co-operation has proved to be an
          effective instrument of change.

     d)   Education and Training: It has been both the faith
          and the experience of co-operators that education
          and training is necessary for healthy co-operative
          development. Co-operative education is a basic
          principle of co-operative action and it is essential
          that education and training programmes should
          continue to be accorded the highest priority and
          adequate provision for this should be included in
          all development projects. In particular, education
          and training programmes for members as well as
          committee and board members at field level are vital
          for good co-operative performance. Without this, the
          desired level and quality of popular participation
          in the control of independent co-operatives cannot
          be expected.

     e)   Professional Management: Another matter of high
          priority is staff training. Too often, and not only
          in developing countries, co-operatives fail because
          of bad management. Co-operative organizations can
          grow and improve their services only through the
          professionalisation of management. Therefore, an
          efficient system of co-operative staff training is a
          vital necessity.

     f)   Promotion of Effective Personnel Policy: In order to
          retain skilled staff, co-operative organizations
          must establish comprehensive personnel policies,
          including adequate recruitment and training,
          competitive salary systems, job security and career

     f)   Promotion of National and Apex Organizations: The
          promotion of national and apex organisations is an
          important part of the development of an autonomous
          co-operative movement. The main burden of promoting
          the establishment and growth of local co-operative
          societies will be carried by these unions or

     h)   Research: It is necessary that due attention is
          given to the examination of needs for technical
          assistance, project identification, feasibility
          studies, monitoring and evaluation of co-operative
          development programmes. These elements should be
          included in all ICA supported projects, including
          seminars and conferences. These elements should be
          included in all ICA supported projects, including
          seminars and conferences. ICA should, moreover, take
          an active part in the search for innovative models
          of development programmes.

4.   Principles

ICA, as well as its member organizations, shall in their
promotion of co-operative development, be guided by the
Principles established by the Rochdale Pioneers in 1844,
reformulated by the 23rd ICA Congress in 1966 and contained in
the article 8 of the `Rules of the International Co-operative
Alliance'. (See Appendix 2).

5.   Resources for Aid

     a)   Movement to Movement Aid: A considerable part of co-
          operative development efforts takes the form of
          Movement-to-Movement assistance. This has mainly
          been given by movements in industrially developed
          countries to co-operative organizations in
          developing countries.

          More and more, however, contacts and exchanges of
          experiences are organized between movements in the
          Third World as well. ICA should be in the forefront,
          giving ideas and inspiration for co-operative
          progress in the fields of action mentioned under
          point 2. It is important for ICA to encourage
          bilateral aid-activities among member organizations
          and to collaborate with other international
          organizations, especially within the UN system. It
          is essential that ICA can play a co-ordination role
          in relation to bilateral programmes and that it
          receives all relevant information to that end.

     b)   ICA Regional offices: The activities of the three
          ICA Regional Offices - which now exist in South East
          Asia, in East, Central and Southern Africa, and in
          West Africa - are devoted to co-operative
          development. These activities include, inter-alia,

          -    co-ordination of co-operative development
               efforts within the region, and promotion of
               exchanges of experiences.

          -    organization of regional seminars and
               conferences on specific subjects; great
               importance must be attached to project
               identification, formulation, preparation and

          -    promotion of the establishment and development
               of national co-operative apex organizations,
               based on local co-operatives.

          -    support of programmes aiming at the involvement
               of women in co-operative democracy; for this
               purpose each Regional Office shall have in its
               staff a specialist on women's programmes.

          Within the time span covered by this policy document
          -i.e. before the year 2000 - ICA shall endeavour to
          respond to the requests from other regions to open
          regional offices, provided that the necessary
          financial resources are secured.

     c)   Auxiliary Committees: The ICA Auxiliary Committees
          represent an important resource, especially in
          fields of knowledge and experience, which shall be
          fully utilized in the development of ICA supported
          programmes. This resource should be used for
          technical advice for recruitment and for specialist
          training. Such assistance is already given by
          several Auxiliary committees, e.g. in the fields of
          insurance, banking, agriculture, trade, and
          participation of women.

          There is considerable need for expansion of such
          activities, not least in the development of inter-
          co-operative trade, at national, regional and global
          levels. It is also important that national, regional
          and global co-operative economic institutions be

     d)   ICA Co-operative Development Fund (CDF): The Co-
          operative Development Fund was established in order
          to provide means for ICA support urgent development
          projects. In view of the increased challenges to the
          international co-operative movement and more
          substantial resources should be available for
          innovative pilot projects. Examples of such efforts
          could be mentioned: projects for greater involvement
          of women in co-operative activities, for the
          transformation of pre-co-operatives into regular co-
          operative organizations, for the establishment of
          income-generating co-operatives and the creation of
          income generating projects for the poor. Increased
          efforts should therefore be made in order to obtain
          larger and more widely spread contributions from the
          ICA member organizations to the CDF.

     e)   Government Development Agencies: In a few countries,
          governmental bilateral agencies give substantial
          financial assistance - partly through ICA - to co-
          operative programmes in developing countries. In
          view of the vital importance of people's
          participation in the development process, it is
          important that governmental agencies for bilateral
          aid - wherever they exist - are made aware that the
          International co-operative Movement can effectively
          utilize financial contributions to the ICA for the
          attainment of genuine development.