Development (1997)

This document has been made available in electronic format
by the International Co-operative Alliance (ICA)
July, 1997
(Source: ICA Review, Vol.90 No.2 - Annual Report 1996-1997, pp.26-31)

Report by Bjorn Genberg

During the period under review, the Development Programme has seen 
further organisational and structural changes. A new position of 
Development Director was established from 1 February and filled by 
Bjrn Genberg, a former Director of the Swedish Co-operative Centre. 
The added capacity will enable the Development Programme to be more 
pro-active both in terms of strategy formulation and resource mobilisation. 

The Development Trust was launched as planned at the meeting of the 
ICA Board in Budapest last October. Being a separate legal entity 
within the ICA, it will now be responsible for the implementation of its 
development programme. The new structure, with its Development Trust 
financed by ICA members, and its Advisory Board of experts, will enhance 
the sustainability of ICA's development function as well as its capacity to 
support co-operative development.

A Changing Environment
In a recent report to the ICA Board, ICA's Regional Directors raised a 
number of problems which are characteristic for the co-operatives in 
their regions. However, while the problems and constraints have their 
own regional attributes and features, there was one recurrent problem 
highlighted by all: the ongoing liberalization of the economy which 
deregulates the markets in which many co-operatives, particularly 
those involved in agricultural marketing, used to have a monopoly. 
What was particularly worrying is that many co-operatives seemingly 
continue to find it difficult to fend off the competition from the new 
entrants in the market, and that the situation, at least in Africa, has 
seemingly not improved in 1996. 

The situation is aggravated by several factors. First, the open market 
in which the co-operatives suddenly find themselves is not a level 
playing field. In several countries, the co-operative legislation is 
lagging behind the liberalization, a grave situation as pointed out 
by the Regional Directors in West and East Africa as well as in 
Asia. The government machinery interfering in the affairs of 
co-operatives prevents them from being able to make fast business 
decisions, and puts co-operatives at a considerable disadvantage when
competing with entrepreneurs, who operate under a different set of rules. 

Second, there is a lack of adequate management skills to meet the 
new requirements. This is reported as a serious drawback in all the 
regions. What is particularly worrying is that the co-operators have 
very little time to acquire the needed skills; i.e., co-operative 
entrepreneurship combined with business acumen and with 
member concern and mobilization.

Third, there is insufficient capital accumulation within the co-operatives. 
This is a general observation in all the regions. Lack of capital not only 
makes survival in the market more difficult, it also makes it harder to 
seize new business openings offered by the market. 
There are of course exceptions to this very generalized description 
of the problems. However, data that may enable us to quantify the 
problem is scarce. Recognising the importance of having reliable 
data, the establishment of regional data bases has consequently 
become a priority task for the ICA.

The Regional Offices
In the Asia/Pacific region, G.K. Sharma retired from his position as 
Regional Director and was replaced by Robby Tulus, who has a vast 
amount of experience in co-operative development. 

The Regional Offices had a busy year organizing important regional 
meetings. The meetings reported on in the last annual report were 
followed by the Americas Regional Assembly at the end of last year. 
A Women's Forum with 600 participants and an international conference 
with the theme "De-globalization: Global Challenge - Local Markets" 
were organized in conjunction with the Assembly. Another regional 
meeting of considerable importance was the 4th Asian/Pacific 
Co-operative Ministerial Conference held in Thailand in March. 

The Regional Offices were also working on their Four Year Regional 
Development Plans. These plans, which will take the offices into the 
next millennium, have a sharpened focus with concentration on key 
issues. There has also been a shift from a project to a programme approach, 
which will facilitate synergy and cross-fertilization between programmes.

A great number of activities were carried out by the regional offices. 
These activities focus on a limited number of issues, reflecting the 
priorities of the co-operatives in the regions. Consequently, the 
activities in 1996/7 may be accounted for under four main programmes: 
Structural Changes and Adjustments; Sectoral Areas; Support Functions;
and Representative and Statutory Functions. 

Structural Changes and Adjustment 
This programme comprises all of those projects and activities which 
aim at supporting the co-operatives in the transition to an open market 
and autonomy from the state (e.g. Policy, Legislation, Research, 
Strategic Planning, Institution Building, Restructuring).

All regional offices have been engaged in dialogues with governments 
and other activities which seek to replace outdated co-operative legislations. 
The Regional Office for Asia and Pacific, ROAP, conducted studies on 
co-operative laws and co-operative competitiveness in five countries and 
organized a regional consultation on co-operatives in the changing 
socio-economic environment with participation from 18 countries as a 
forerunner to the Ministerial Conference in Thailand. The Regional 
Office for West Africa, ROWA, has studied the situation in three 
countries and two draft laws have been prepared in collaboration 
with the ILO COOPREFORM programme. In 1996, the Regional 
Office for the Americas, ROAM, published guidelines for co-operatives
on how to adjust and restructure so as to stay competitive in the 
new environment. This office also arranged two regional conferences 
in 1996 on strategic alliances and planning in the liberalized economy.

The regional offices also undertake studies of co-operative movements 
for the purpose of identifying strategies and proposing plans for the 
transition to an open market. Several such studies were conducted by 
ROAP and the Regional Office for East, Central and Southern Africa, 
ROECSA in 1996. The regional offices also arranged and participated 
in various types of conferences and seminars on this topic. 

Influencing and convincing governments about the need for a reformed
co-operative legislation, assisting in reviewing such laws, and in general, 
working towards a more enabling environment for the co-operatives is 
politically sensitive, strenuous, and above all, a process which takes a 
very long time. Although it is difficult to assess the impact of such 
interventions, this work nevertheless remains one of the most important 
activities on ICA's agenda.

Sectoral Areas 
This is the programme which directs itself to specific sectors or types 
of co-operatives. This programme promotes an exchange of technology 
and experiences, introduces new management methods and also discusses 
business efficiency and competitiveness specifically related to certain sectors 
(e.g. agriculture, consumer, banking, credit and insurance).

In ROAP, consumer and agricultural co-operatives are the two dominant 
sectors being promoted under this programme. A number of workshops, 
training activities and symposia were arranged for the agricultural 
co-operative sector. The 11th course on "Management of Agricultural 
Co-operatives in Asia" was started in 1996 with continued support from 
the Ministry of Agriculture in Japan. So far 150 managers of agricultural 
co-operatives have been trained and they have, as part of the training, 
prepared the same number of projects for their organizations. 

The Consumer Project organized training of managers from Bangladesh, 
Nepal, Sri Lanka and India; exchange programmes for women co-operative 
leaders from Malaysia and Indonesia; a fact-finding mission and training 
in Mongolia; work shops on university co-operatives and a 
national seminar in India.

Regional seminars on Co-operative Banking and Housing were also held
 in 1996, and recommendations on co-operative competitive strength 
emanating from the banking seminar were inputs to the Ministerial 
Conference. A housing seminar recommended the formation of a 
Regional Committee on Housing. 
In ROECSA the main sectors being supported were insurance and 
banking. During the course of the year the insurance project promoted 
co-operative insurance in altogether 10 countries. Discussions were 
also held with the Registrar of Co-operatives in South Africa with the 
purpose of examining the potential for co-operative insurance in the 
country. The insurance project is carried out in collaboration with the 
International Co-operative Mutual and Insurance Federation, ICMIF, 
which is a specialized organization of the ICA. 

ROECSA and Rabobank provided technical advice to the local 
co-operative bank which was established in the Kilimanjaro region 
in Tanzania. The formation of this bank is an interesting development, 
since it is positioned between a local savings and credit society and 
the ordinary national level co-operative bank. 

The Rabobank discontinued its financial support to the ROECSA 
banking project in mid-96, despite an evaluation, undertaken the 
previous year, which concluded that the project was sound and 
which recommended continued support. 

ROWA has two projects which support the emergence and consolidation 
of apex organizations and federations. In his report the Regional Director 
notes that the present situation in West Africa is favourable to the 
emergence of secondary and tertiary organizations. The apex 
organizations will give the co-operators a vehicle for looking after 
their interests in the new environment. The situation is somewhat different 
in ROECSA, where the apex organizations are getting weaker. However, 
the future prospects for an apex organization is of course related to the 
sector in which it is functioning. Under the project for consolidation of 
apex organizations, in which training has been a major activity, ROWA 
has contributed to the drawing up of new statutes and by-laws, raising 
awareness and improving skills, as well as increasing mobilization of 
internal savings within participating organizations. 

ROAM has placed emphasis on preparing and publishing manuals and 
handbooks which aim at increasing trade with the co-operatives in the 
region. So far ten "Doing Business" (with co-operatives) manuals have 
been published. These manuals provide guidance on how to enter sectors 
and markets where co-operatives are engaged. There is a strong demand 
for these publications, and the sales of these manuals provide a good 
income for ROAM. 

A different type of project is ICA-Foprope in Bolivia which is a local 
level (provincial) project and is administrated by the Head Office. 
The project provides management support for co-operatives and also 
promotes micro credit to individual members through the co-operative 
structure. An internal evaluation was carried out in 1996. The conclusions 
were encouraging and it was decided to plan for an extension for four 
years and to request continued funding from the development partner (Finnida). 

Support Functions 
This programme comprises three components; Gender, Human 
Resource Development (HRD) and Youth. The first two are 
support (or core) functions in the sense that they underpin all 
other projects or activities. HRD and gender specific activities 
are also carried out as gender awareness campaigns, promoting co-operative 
leadership development or promotion of co-operatives for the youth.

A number of activities were carried out by ROAP to encourage gender 
integration in co-operatives and to promote capacity building. Five regional 
and national gender conferences were organized. The aims of these events 
were to increase the awareness of the role of women in co-operative 
development, to identify constraints for women's participation, to follow 
up on previously prepared country plans for gender integration, and to 
draw up new ones. A regional seminar on curriculum development was 
arranged in collaboration with ILO COOPNET in Sri Lanka, and the HRD 
advisor also collaborated with partners on a number of other activities 
such as the development of personnel policies, facilitation at HRD seminars, etc. 

Four specific HRD activities were carried out in the ROECSA region 
in 1996. Chief executive officers from member organizations and 
government co-operative departments and principals from co-operative 
colleges participated in a regional consultation on HRD policies. 
Workshops on methods and techniques in field education and on 
business re-engineering were organized, the latter bringing top 
executives up to date on the latest management techniques. Two seminars 
on "Women's Role in Co-operatives Under Reform" were also organized. 

ROWA carried out training and provided support for small savings and credit 
activities for women in Senegal, Benin and Cape Verde. Around 400 women 
benefited from these activities and improved income generation for village 
women, as well as improved production and sales of food crops could be 
noted. ROWA also conducted two studies in Niger and Mali for the 
purpose of identifying and drafting a strategy and a plan for better 
participation of women in the co-operative work.

ROAM has opted for a slightly different approach to gender and HRD 
with emphasis on production and dissemination of materials. Six handbooks 
on HRD have been produced and published, and they have proved to be 
co-operative "best sellers" in the region. With regard to gender, several 
sub-regional conferences were organized. These events provided inputs 
to the Women's Forum in Costa Rica. This forum laid down a platform 
for action for the empowerment of women and their increased 
participation in co-operative development.

Representative and Statutory Functions
These core functions include first of all the organization of statutory meetings. They also involve representing ICA at annual and other important meetings of member organization, as well as attending conferences and meetings of the specialized bodies and regional committees. Considerable time is also 
spent meeting development partners and negotiating and concluding project 
agreements. The offices should also keep and maintain a database on the member 
organizations in the regions, a demanding task which is difficult to finance. 
Furthermore, member relations also include the task of maintaining regular 
contacts with all members and monitoring payments of subscriptions. 

The position with regard to regional membership in 1996 was as follows: 
There are presently 60 member organizations in the Asia/Pacific region, 
14 members in the ROECSA and ROWA regions respectively, and the 
Americas region now has 53 organizations registered as members.

Financing the Development Programme
ICA collaborates with a number of donors and development partners, 
some of which have been contributing to the development programme for 
many years (e.g. our partners in Sweden, Norway, Japan, Canada and the 
ILO Coop Branch). In 1996 the total budget for the development 
programme amounted to about CHF 8 million. The development partners 
contributed around 65 per cent of this cost, a percentage which has 
remained fairly constant in the 90s. The balance is covered by ICA 
and its member organizations. The contributions from the donors 
have, however, also remained constant in absolute terms, meaning 
that, taking inflation into account, the budget for the development 
programme has decreased since 1990. 

The reason for the stagnation in contributions from the development 
partners is that they themselves have suffered reduced funding from their 
sources. This trend is in line with the global decrease in official 
development assistance. It is, however, gratifying to note that, as far 
as can be ascertained, ICA has been able to increase its relative share 
in the total declining resources available to the development partners. 
There has also been a tendency among the partners to initiate joint 
activities or to contract ready made assignments to ICA. 

One of ICA priority areas is to assist the co-operatives which are in a 
transition to independence and an open market. Given the many challenges 
and the general decline in resources available for development work, ICA 
requires additional resources if it is to satisfactorily address these issues. 
With additional resources, ICA could intensify and strengthen present 
programmes including the promotion of an enabling environment, institution
and capacity building and the development of methods and materials.