Social Development in the Asia-Pacific (1997)

This document has been made available in electronic format
by the International Co-operative Alliance (ICA)
Oct, 1997
(Source: Co-op Dialogue, Vol.7, No.2, May-Aug. 1997, pp.15-17)

Social Development in the Asia-Pacific -
Co-operative Action on the Social and Earth Summit Resolutions
by Upali Herath

The NGO Forum on Social Development in Asia and the Pacific,
held in Kuala Lumpur in September 1997 will reveal how successfully
co-operatives are supporting social development, alleviating poverty,
creating employment and sustainable livelihood.

The international co-operative movement has placed increasing emphasis
on human values in the operation of co-operative enterprises.  Social
values have been accepted in some organisations at the expense of
astute business practices while, in developed nations, co-operatives
have grown into large corporations that have lost touch with social
and community development.

The United Nations Social Summit at Copenhagen in March 1995 and
the previous Earth Summit held in Rio de Janeiro in 1991 acknowledged
the vital role co-operatives play in sustainable development.

In his speech on the first UN-declared International Day of Co-operation 
in July 1995, the Secretary-General said, "Co-operative enterprises provide
the organisational means whereby a significant proportion of humanity is
able to take into its own hands the task of creating productive
employment, overcoming poverty and achieving social integration. They
constitute a model for a people-centred and sustainable form of societal
organisation, based on equity, justice and solidarity." 

The ICA Congress in Manchester answered this challenge by adding a
new principle - concern for community.  Focusing on members, it requires
co-operatives to work towards an economically, socially and culturally
sustainable community.

Enabling an environment for social development
Governments in South and South East Asia have used co-operatives as a
vehicle to deliver economic and social programs to poor communities. 
While co-operatives have viewed this as support, they have struggled to
preserve autonomy and independence  as user-owned, member-driven
organisations.  The ICA established a biannual Co-operative Ministers'
Conference to improve understanding between governments and

Both the Earth and Social Summits provided recommendations the
co-operative movement has used to form its model for sustainable
development, including redefining the roles of both governments and

Discussions on this relationship have focused on the capacity of
co-operatives as independent, member-based organisations to build
communities, and government's need to build partnerships with
institutions that develop the democratic tradition and create a self-
reliant society.

The co-operative movement has sought policy changes that will
empower people in the lower strata of the community.  Participation
is the cornerstone of co-operation.  In the case of transitional economies,
co-operative policies have been unclear and the private sector has gained a
competitive advantage (with some exceptions).

The Social Summit called on government to implement measures to open
market opportunities to people living in poverty and the disadvantaged,
and to encourage individuals and communities to take economic initiatives. 
During this transitional process, many producer and marketing
co-operatives have declined.

Governments have taken the positive stop of relaxing legal barriers and
policies to allow efficient and competitive micro-financing, which leads to
the creation of formal and unconventional credit facilities for the poor. 
Commercial and transnational banks have also begun extending credit
facilities to rural sectors. 

Partnerships with finance co-operatives can strengthen the co-operative
sector in poor communities.  Still, opportunities for co-operatives to use
surplus capital to benefit their members have not been fully realised.  In many developing countries, commercial banks use these surpluses to
invest in private sector, profit earning ventures to the disadvantage of

Social Summit recommendations on the Uruguay Round of multilateral
trade talks and consequent WTO agreements have had a mixed impact on
co-operatives.  Primary agricultural commodities and producers saw
increased exports, while local producers suffered lost market share to
imports.  The Summit called for, "fair competition and ethical
responsibility in business activities and enhanced co-operation among
governments, the private sector and civil society," still many governments
were not able to facilitate a smooth transfer from closed economies to open
market economies.

Structural adjustment programs have not been beneficial to co-operatives
because they dismantle the protection they enjoy in a welfare state.  The
Social Summit called for, "fiscal systems and other public policies that are
geared towards poverty eradication and do not generate social divisive
disparities," by re-examining the distribution of subsidy systems to ensure
they benefit people living in poverty and the vulnerable.  International
financing institutions have discouraged local farming in favour of
commercial export cultivation, which threatens food security and subjects
developing economies to world market trends set by transnational

A co-operative contribution to alleviating poverty
Eradication of absolute poverty and the reduction of overall poverty was
the focus of the Social Summit recommendations. It acknowledged the
potential of co-operatives to attain social development goals and eliminate

Co-operatives can:
-	mobilise disadvantaged groups into self-help, self-reliant organisations;
-	provide self-employment opportunities and resources;
-	teach skills in self-management and leadership;
-	strengthen access to markets;
-	provide basic needs and the resources to acquire them;
-	offer vocational training and new technology for production, marketing
	and service industries;
-	promote sustainable livelihoods by building capacity and mobilising
-	create awareness of environmental and health issues and encourage
	values, policies and strategies.

The history of the co-operative movement in Asia and the Pacific
demonstrates co-operatives in this region have enormous ability to reach
the poor.  Of ICA's global individual membership of 835 million spread
over 97 countries (40 per cent of the world's households), 500 million
reside in 26 Asian Pacific countries.  A UN report indicated that 2.3 billion
people or 57 per cent of the total population of developing countries are
closely associated with co-operatives.

The credit co-operative sector is the largest type of co-operative functioning
in most countries.  Micro-financing is vital for the survival of rural
communities.  Over 70 per cent of people in the developing countries in
South Asia live in rural areas.  Credit co-operatives provide daily advances
to street hawkers to long-term farm investment loans. 

Agriculture sector financing has been dominated by co-operatives, and they
also participate in production, processing and marketing ventures.

Newer types of co-operatives include workers co-operatives, which have
become an option for people employed in activities as diverse as rag
picking, garbage recycling and the sex trade.

Social housing has become a successful co-operative venture for the urban
lower middle  class.  Health care co-operatives are also growing and the
Asia Pacific Health Co-operative Organisation formed in August 1997. 
They provide an alternative to private health care, including medical
services and preventative care.

Fisheries co-operatives have become the most stable institution in the
voluntary sector to serve poor fishing communities.  They provide
marketing services, fishing gear and insurance.  Youth and women's
co-operatives are also reaching the disadvantaged.

The co-operative movement has faced certain challenges as governments
cope with structural adjustment.  Land reforms, commercialisation of
agriculture and the withdrawal of subsidies have posed serious problems. 
Increased use of environmentally harmful chemicals in agriculture affects
South Asia particularly.

Employment and sustainable livelihood
As government services shrink, more people are unemployed. Co-operatives offer employment on both a full and part time basis. They
have contributed in several ways:

-	through direct employment in co-operative enterprises;
-	indirect employment through self-employment;
-	provide vocational education and training.

Co-operatives' most important contribution to sustainable employment
is to provide resources and opportunities for self-employment through:
-	entrepreneurship development;
-	training related to the vocation or enterprise;
-	credit;
-	consistent markets.

Co-operatives can help realise sustainable livelihood by:
-	using resources for regeneration;
-	discouraging over consumption of resources;
-	raising environmental concerns;
-	providing basic human needs.

Environmental sustainability is a major concern as nations industrialise
and over consume resources.  Co-operatives must not only offer
sustainable production, but responsible marketing.

Co-operatives believe that empowerment comes through education. 
Co-operatives have even grown to function as universities or business

Governments can work through co-operatives to educate and help preserve
the environment by:
-	providing co-operative education and training through government 	institutions;

-	subsidising training on vocations related to co-operatives;

-	providing entrepreneurship development programmes for co-op

-	offering tax concessions for educational activities.

Co-operatives in social integration
Co-operatives are, by their nature, social entities committed to equality
and democratic governance.  Co-op members have been active in peace
and social justice initiatives from their beginnings.

Co-operatives can also create opportunities for disadvantaged groups.
They can educate and discriminate against products that are harmful for
human consumption.  Co-ops can also bring producers and consumers
closer together, adding value to products that meet specifications.

Mutuality and consolidation among co-operatives helps to build social

The Social and Earth Summit resolutions have been adopted by
co-operatives and have strengthened them in working towards a
sustainable community.  

Governments are reaching out to social and economic organisations as they
withdraw from direct participation in the development.  

Co-operatives offer people-based and sustainable solutions to alleviate
poverty and ensure social justice.