Development perspectives of the movement in Poland (1996)

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

     (Source: Review of International Co-operation, 
     Vol.89,  No.2/1996, p.34-39)
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          Development Perspectives of the Movement in Poland
                    by Marian G. Brodzinski*
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The Need for Change
-------------------
The on-going transformation of the political and economic
system, which started in Poland in 1989, with the collapse of
the communist system and the centrally planned economy,
requires a deep transformation of the co-operative movement.
The main guiding rule of such transformation is the full
adaptation of co-operatives to the conditions and requirements
of the emerging market economy.$

The Polish co-operative movement developed in close connection
with the fundamental ideological trends of the world co-
operative movement with its 150-years historical experience.
There coexisted in Poland co-operatives founded by the
adherents of social-democratic doctrines who followed the
Rochdale model, co-ops founded by the advocates of liberal
theories who organized societies according to the model of H.
Schulze-Delitzsch, and others founded by the followers of
christian socialist ideas, which were similar to Raiffeisen
movement. In 1937 the total number of co-operatives in Poland
was 12,860 with 3,016 thousand members - the majority (42.9%)
were savings and loan societies, followed by agricultural co-
ops (23.1%), dairy co-ops (14.0%), farmers' marketing co-
operatives (3,2%) and housing co-ops (2.0%).

The post-war period of the "real socialism" brought about the
total subordination of the co-operative movement - as it did
of the whole social and economic life in the country - to the
communist party and state control. This led the co-operatives
- notwithstanding the great economic growth of the movement
(at the end of the communist era co-operatives had 7% of GNP,
62% of consumers' goods sales, 56% of agriculture products
marketing, 43% of housing resources in towns and accounted for
16% of total employment.) - to lose their identity and their
credibility in the public eye. During this era, the movement
dealt too much in politics, and too little in economics,
ethics and self-management.        

A Relic of the Stalin Era?
--------------------------
After 1989, when the political and economical reforms were
initiated, public opinion as well as most of the "post-
solidarity" authorities and political parties no longer
perceived the co-operative movement as an efficient tool of
social and economic development at the local level. On the
contrary, the movement was treated a relic of the Stalin era.
Together with market conditions highly unfavourable for  co-
operatives, this brought about a deep regression of co-
operative activity in all sectors.

As discussed at the first nation-wide co-operative congress in
June 1995 in Warsaw, it is crucial for the co-operative
movement to adapt new forward-looking strategies reaching
ahead to the year 2000 and even 2020. Such strategies should
stop the regression, renew the valuable achievements of the
movement and adjust its forms and methods to the conditions of
the market economy, enabling them to develop according to the
country's social and industrial needs. Some of the basic
premises for that strategy, resulting from a nation-wide
debate (among co-operators and researchers including
representatives of the Co-operative Research Institute in
Warsaw) is discussed below:

Modernizing the Movement
------------------------
The main condition for the convalescence of the movement is an
exact description of goals linked to economic and social
efficiency. This  requires the modernization of the
ideological premises of the movement. The former communist
theory of co-operatives as a factor for building a new system
according to the collective theory must be rejected. The real
meaning of co-operation is service to the interests of
members, mutual help, mutual responsibility, quality, justice,
honesty and democracy. According to the ideology of mutual
help and co-operation, co-operatives must give to their
members and in many cases to the community some well defined
direct and indirect profits. 

The direct benefits are expressed in:

-    Better and cheaper range of goods and services,

-    Better and more profitable marketing of products made in
     members' enterprises,

-    Strength in the market place due to bulk buying at lower
     prices and more profitable supply conditions,

-    Efficient gathering of scattered capitals leading them to
     the local needs,

-    Good knowledge of local markets, due to their close
     relationship with their members,

-    More possibilities of overseas trade through apex
     federations and co-operative unions.

-    The introduction of up-to-date techniques in production
     methods and introduction of education programmes to keep
     the employees and members abreast of technological
     progress. In this area, it would be beneficial if our co-
     operatives could learn from the movement's experiences
     from all over the world.

The indirect benefits from the influence which co-operatives
have on other enterprises which are obliged to keep prices low
and offer a good range of quality products in order to compete
with the co-operatives.

The new perception of the ideological principles of the
movement as well as its direct and indirect benefits should be
widely promoted among members and the general public. It is
worth remembering the words Charles Gide uttered almost a
hundred years ago: "a co-operative society which is only an
enterprise is a poor enterprise".

Organized attention should be given to the rebirth and
development of the co-operative societies in all traditional
fields of co-operative activity, bearing in mind that market
economy is based on the pluralism of legal forms, ie., there
could also exist private and state enterprises or those
managed by local authorities. The co-operative movement should
- within this pluralism - effectively fulfil the role of a
moderator of this spontaneously active market.

New Target Groups
-----------------
In a modern society there is also a need for organizing co-
operatives in new fields and scopes of activities, especially
in areas such as social and insurance services, where the
protecting activities of the,state are limited. The need for
new co-operative forms is particularly visible within the
restructurization taking place in the countryside, where
multi-purpose co-ops could fulfil a wide rang} of economic and
social needs including social care, cheap housing, local
production services, and some spheres of agrarian production.
In our movement, these unconventional forms of collective
activity are underestimated, and the new Co-operative Law
overlooks them completely.

Traditionally the co-operative movement organized mainly
economically weaker social groups. Nowadays the movement
should also serve the interests of the middle classes. The
universality of the co-operative movement justifies its
development in an urban as well as a rural environment. 

But, as co-operators know very well, no social-professional
group is so vividly and thoroughly interested in the
functioning of the co-operative movement as farmers. Farmers
are interested as customers, as producers (production supply,
production services, introduction of new technologies and
market information), as sellers of agricultural produce, as
investors (extending the productive potential of their farms
and undertaking extra-agrarian economic activity), and as
savers and borrowers as well. The development of the co-
operative movement among farmers is a historical answer to
their weak status on the market.

The Social Role
---------------
A second social group which is particularly interested in the
sound functioning of co-operatives consists of disabled and
handicapped people. 

Without losing sight of other social groups, it is necessary -
in the process of renewal and restructurization of the co-
operative movement - to give close attention to the problems
of these two groups. Additionally important, from a social
point of view, would be the role co-ops could play in
assisting groups endangered by structural unemployment.

In many cases co-operatives have lost their traditional
character. Having preserved their legal status, they changed
de facto from mass consumers' societies to companies belonging
to elite social groups, very often having the character of a
coterie. It is especially relevant to some farmers' and urban
consumers' societies. The most common method used for such
changes was to raise the shares to a level which could not be
accepted by most members. It is urgent to explore, with the
use of auditing authorities, the actual course of these
changes and wherever it is socially justified, to try to
restore to these societies the character of universal users'
and consumers' co-operatives.

Similar threats may result from a too narrow interpretation of
Article 3 of the new Co-operative Law which states that "the
assets of the co-operative are the private property of its
members". It is an urgent task to find ways to prevent
possible corrupt practices which are contradictory to the rule
of justice and inhibit solidarity between generations.

In the countries of a well developed economy two features are
dominant in the actual development trends of co-operatives.
These are the tendency towards specialization - and within
this specialization - a tendency towards centralization. These
tendencies require urgent observation and exploration.
Popularizing particular structures of co-operatives as
specifically rational, it would be advisable to accept also
different forms which are better adjusted to local needs and
conditions. Either way, the need of association in the form of
co-operative unions seems to be undisputed. The rebirth,
development and popularization of auditing-patronal and
economic associations, especially bank associations, is an
important and urgent task. We do not know any cases of truly
effective co-operative movements without such indirect forms
of concentration, having an ancillary character in relation to
co-operatives.

The Need for Autonomy
---------------------
The 7th Principle approved by the last ICA Centennial Congress
in Manchester states "Co-operatives work for the sustainable
development of their communities through policies approved by
their members". Such a rule defines a bilateral relationship
between the co-operative movement in a democratic country and
a local government within a market economy. A decisive rule
here is the Principle of Autonomy and Independence, which
should be respected, bearing in mind that is nevertheless
indispensable for both parties to co-operate.

The state and local government should guarantee the necessary
conditions for co-operatives to develop on an equal level with
other types of enterprises. Moreover, they should consider
using co-operative enterprises in socio-economic activities
which require public confidence and direct contact with
society at large.

Aid without Dependence
-----------------------
Co-operatives have the right to expect help from the State in
the form of anti-debt actions. These actions are not to be
regarded as a privilege, but must be performed as a justified
activity and compensation. Co-operatives have fallen into the
so-called "credit trap", through no fault of their own. At the
time of the centrally planned economy they had to take credits
in order to finance the plans imposed on them. Then, when the
socio-economic changes occurred, credit contracts were
unilaterally broken without the fault or will of the co-
operative.

The fundamental condition for fulfilling tasks towards members
and the whole society is a constant achievement of full
economic effectiveness. This cannot be achieved unless the co-
operative enterprises acquire such forms of modern business as
marketing, controlling, management, and capital formation.
Thus, we can widen Charles Gide's principle mentioned earlier
and state that "a co-operative which is not a good, skilful
and effective enterprise is a faulty co-operative". 
     
Stressing pragmatic action and the entrepreneurial idea is
fundamental, but the importance of social and educational
activities should not be neglected. These should be continued
wherever the proper conditions and real social needs exist,
especially the pupils' co-operatives and labour centres for
women. In other cases co-operatives should at least support
the socio-educational activity undertaken by other social
organizations and local governments.

Image Building
--------------
In order to restore the confidence and acceptance of the co-
operatives by their members it is also necessary to improve
the image of the co-operatives in the perception of the whole
society and its local structures, particularly by popularizing
knowledge about the material and social values of the
movement, its tradition and achievements. This should be
undertaken by co-operative publishers as well as by other mass
media.

It is necessary to include co-operative issues in educational
and training programs, especially in agriculture-economic
schools and colleges. It is also necessary to intensify the
collaboration of the co-operative movement with relevant
political organizations and parties as well as with social
organizations (youth, women's, trade unions etc.).

Public relations should be developed to win the acceptance of
public opinion and to form positive attitudes towards the
movement.

The wide range of innovation procedures our movement should
implement necessitates constant improvement of professional
staff and persons actively engaged in co-operative work. This
aim will not be fulfilled unless training and research
institutions are developed and adequate training programmes
and methods of supplementing professional qualifications are
implemented. The professional qualifications of co-operative
managers should be discussed and shaped according to changing
needs.

Summary
-------
It is evident from the issues discussed above that the main
direction of the renewal strategy and development of the
Polish co-operative movement comprises the following:

-    Efforts to stop the processes which may lead to the fall
     of existing co-operatives;

-    Amendment of the ideology of the movement to emphasize
     the importance of fulfilling members' needs and ensuring
     that co-operatives have a leading role in the pluralistic
     market;

-    Traditional fields and activities of co-operatives should
     not be neglected at the same time as new directions are
     created;

-    The relationship between town and countryside; special
     stress should be put upon agriculture, handicapped
     persons and groups of the population especially
     endangered by structural unemployment;

-    The character of mass users' or consumers' societies
     should be restored to specific co-operatives;

-    The rational structures of co-operatives should be shaped
     in the direction of specialization and concentration;

-    Co-operative auditing-patronage unions, economic and
     financial consortia and other capital associations of co-
     operatives should be developed and strengthened.

-    The economic effectiveness of co-operatives should be
     improved through modern management techniques and active
     financial policies;

-    The socio-educational activities should be developed and
     modernized;

-    The general social confidence towards the co-operative
     movement should be reinforced through the use of
     traditional and modern public relations techniques.

-    The movement should collaborate with the State or local
     governments while preserving its full autonomy;

-    Collaboration should be intensified with other political
     and social movements;

-    Co-operative staff should receive professional and social
     education and training:

-    A suitable research-development basis should be secured
     for the global movement and for its specific branches.

The National Co-operative Council, the co-operative unions and
other organizations interested in the movement are confronted
with a great number of urgent tasks requiring strategic
activities, i.e. activities which are consequent and stable
over a period of several years. A significant moral support in
this activity may be that innovative ideas and activities are
surfacing in grassroots level societies, local communities and
among organizations which had not previously been interested
in the co-operative movement, for example the Catholic Church
hierarchy.

The brilliant statement of Romuald Mielczarski, one of the
Polish consumer co-operatives pioneers that "the work in co-
operatives is not a work on people or for the people but the
work performed by the people themselves" has not lost its
significance in today's world.