Co-operatives in the Slovak Republic

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    This document has been made available in electronic format
         by the International Co-operative Alliance ICA 
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                         June 1994

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               Co-operatives in the Slovak Republic 
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                    by Silvester Adamca*


In 1994 and 1995, the Co-operative Movement will be
celebrating significant anniversaries of its foundation and
gradual development all over the world. This year is the 150th
anniversary of the establishment  of the "Rochdale Society of
the Equitable Pioneers",  and the 100th anniversary of the
International Co-operative Alliance will be celebrated at the
Manchester Congress in 1995.

Within the framework of these anniversaries there is also the
150th anniversary of the founding of the Co-operative Movement
in  the territory of the Slovak Republic, which we will
celebrate on the 9th of February 1995.

The Co-operative Movement has significantly participated both
within Slovakia and within the worldwide  context in every
historical development stage  in order to meet the needs  of
citizens. From the international viewpoint, there is general
knowledge about the Rochdale Pioneers, but very little is
known about the long term tradition of Slovakian
co-operatives. Therefore,  we wish to use every opportunity to
inform about the co-operative traditions in our country. 

In 1845, when the co-operative movement was born in Slovakia,
our country was  a part of the Austrian  Hungarian Empire, a
dual State, until its disintegration in 1918. The Empire at
that time consisted of Austria, Bohemia, Slovenia, Croatia,
present-day Hungary, Slovakia, Transylvania, Halic  and
Vojvodina.

Czechoslovakia was established after the  disintegration of
the Empire as a new state, incorporating  Bohemia, Slovakia
and Subkarpathia, which was previously a part of East Halic.

Within the framework of the democratic State of
Czechoslovakia, the Co-operative Movement was developing very
progressively and relatively independently based on the
legislative in force from 1918 to 1939. In 1939, due to the
Munich agreement signed in 1938, Czechoslovakia broke up and a
new independent Slovak state was established, which existed
from 1939 to 1945. The co-operative system continued to
develop within the new State framework, even though
practically under war conditions.
After World War II, in 1945, Czechoslovakia was reestablished
without Subkarpathia which was allotted to the former Soviet
Union.

The Co-operative Movement in Slovakia continued to develop on
the basis of democratic legislation, which was similar to that
found in European democracies.                      

After the installation of the Communist regime in 1948, the
Communist Party of Czechoslovakia reserved the right to decide
on everything. It was later laid down in its rules that the
Party is the leading power of socialist society. Even after
the Second World War from  1945 to 1948,  the Communist
leaders  promised that co-operatives could freely exercise
their activities and continue to develop independently  as 
recognition for their active participation in the resistance
movement against Hitler.
Co-operative democracy and principles became the target of
criticism  after 1948. Therefore, only those co-operatives,
which submitted to the new conditions and  legislation were
allowed to survive. The political bodies of the Communist
Party didn't even allow the further existence of credit
co-operatives  and, without the agreement of members,
dissolved these co-operatives.  As part of this process, the
co-operative societies were transformed into state enterprises
or new state enterprises were formed to replace the co-ops in
accordance with a theory that the state form of ownership is a
higher form in the creation of a socialist society, than the
co-operative form of ownership.

The co-operatives which submitted to the new regime had to
accept three main tasks: actively help the regime in so-called
socialisation (i.e. in suppressing capitalism), engage in the
centrally-planned economy, and recognise the territorial
bodies of the Communist Party as the institutions which decide
on the candidates for important positions. Co-operatives could
not get support from their Unions during this period because
these were also outlawed.  They were replaced by the Central
Council of Co-operatives in the Czech Republic and in
Slovakia, the Slovak Council of Co-operatives. The leading
officials of the Council were not elected, but appointed by
the authorities. The different co-operative sectors were only
allowed to form their own unions in 1952 and 1953.

The Unions which were given the mandate by the Communist Party
to supervise co-operatives during the last 40 years were,
however,  able to lobby  the State in the interests of member
co-operatives and some level of co-operative democracy was
achieved.

For the Slovak co-operatives an increased independence was in
evidence from the 1st of January 1969 - after the acceptation
of the Law on the Czech - Slovak Federation. Since then,  the
Central Council of Co-operatives in Prague as the superior
body, covered independent Czech and independent Slovak Unions
of housing, consumer and producer co-operatives, until 1990.
The agricultural co-operatives were controlled through the
Ministry of Agriculture and the central planning.

The Uniform Union of Co-operative Farmers which was
established in March 1948 to replace the dissolved
Agricultural Chamber, was organised in accordance with the 
new political situation and existed only until March 1952,
when it too was dissolved. A Union did not exist until 1968
when "The Slovak Union of Co-operatives and Single Working
Farmers" was again established within the framework of the
democratisation process. But its activity from 1969 to 1989
was only  modified thanks to the efforts of the co-operative
members.

The principle changes in the movement took place after
November 1989, when the transformation process changed working
conditions in accordance with the internationally recognized
co-operative principles. In accordance with the Law No.42/1992
on property relations and the restitution of co-operative
property, the principal property transformation of
co-operatives took place in 1992.

The transformation process has since been aimed at these
spheres:

a)   the realization of legislative changes especially in
     housing and agricultural co-operatives;

b)   the successful transition of co-operatives to a market
     economy 

In connection with the separation of the Czech and Slovak
Federation into two independent states, i.e. Slovak Republic
and Czech Republic, the Co-operative Union of the Slovak
Republic was established on the 29th of December 1992. The
Union was established in accordance with the legislation
regulating the four member unions of housing, consumer,
producer and agricultural co-operatives.  Besides the tasks
which it has to fulfil in relation to the government,
Ministries, and  the National Council of the Slovak Republic
(Parliament), the Union has also become the member
organisation of the International Co-operative Alliance for
the Slovak Republic.

For the first year of its existence, the Co-operative Union of
the Slovak Republic has assumed the coordination and
collaboration of activities previously performed by the
sectorial co-operative unions, such as representing the 
Co-operative movement with the  State authorities and 
Parliament and coordinating   international collaboration,
especially within the framework of ICA.

The main tasks for 1994 are dictated by the economic and
social development of co-operatives, the needs of member
co-operative organisations and the rules. This will be
connected with the growing competition on the internal market
for both consumer and producer co-operatives, with the solving
of economical and other issues in the agricultural
co-operatives and with the concept solving of the state
housing policy regarding housing co-operatives.

The topical tasks solved in the legal sphere are especially:

-    the issue of the non-divided fund of consumer and
     producer  co-operatives

-    the preparation of legislative assumptions for the
     establishing of credit co-operatives.

There is a need to perform tasks connected with the activities
of the ICA bodies in the sphere of international relations.
One of the priorities will be our active participation at the
Ist Regional Assembly of the ICA European Region, which will
be held in October 1994 in Prague. Our active work on ICA 
Specialized Bodies is also important.

There is a need in 1994 to more intensively extend our
participation at the PHARE programme with the use of the Co-op
Network for Co-operative Development possibilities.

It would be useful to organise an international workshop this
year focusing on topical issues for the movement. Another
important activity this year will be to participate in
exhibitions, especially the all Slovak co-operative exhibition
COOPEXPO 94, which will be held in June 1994 in Nitra.
As in other countries there is a pressing  need to extend
promotional activities. To fulfil this task, we will exploit
more fully the International Co-operative Day.

In this regard  preparations for celebrations to mark the
150th anniversary of the Co-operative Movement in the Slovak
Republic and the 100th anniversary of the ICA are extremely
significant.  In connection with the ICA celebrations, we are
preparing some activities in 1994 and 1995, which  should
contribute to the positive image of co-operatives in the
Slovak Republic and to their further successful economical and
social development. The all co-op exhibition COOPEXPO 94
should also serve this aim. This exhibition will be held from
22 to 26 June 1994 at the exhibition ground, Agrokomplex Nitra
and we intend for it to become an annual event  with wide
international participation, with a view to extending the
possibilities of  collaboration with other ICA member
organisations.
Activities to mark the 150th anniversary of the Co-operative
Movement in the Slovak territory will include international
workshops on the themes: "150 years of Co-operatives in
Central and East Europe" in November 1994, and "The
development of co-operative democracy in the Slovak Republic
territory during 150 years" in February 1995. These two
projects which we propose to include in the PHARE Democracy
Programme for 1994, should result in the publication of a book 
which will be used as educational material in schools, as well
as for the education of all co-operators and ordinary
citizens. The entire  Co-operative Movement has a significant
position in the Slovak economy. It jointly represents more
than 200,000 co-operative employees and 1 million co-operative
members, out of a total of 5.3 million Slovak Republic
citizens.

The Slovak Union of Housing Co-operatives runs 22% of the
housing fund of the Slovak Republic. In accordance with the
new Laws, the new economical environment requires structural
changes in state housing policy including the control of
housing co-operatives. Simultaneously, there is a need for
co-ops to collaborate with towns, villages and other
interested parties concerned with housing development.

The most important task is to initiate an amendments to the
Law on the ownership of apartments which favours the
co-operative sector.  We wish to be involved in amending the
present legislation as a part of the social economy.

The restructuring of  communal  sources of energy and of  the
housing fund, in accordance with the programme of energy
saving, will be future priorities. We would like to solve
these issues and projects in collaboration with international
organisations such as World Bank, within the PHARE programme,
or within other aid programmes from foreign countries.

The Slovak Union of Consumer Co-operatives currently
represents  one of the most important trade systems that
provides services in the retail and  wholesale trades and
catering establishments. The consumer co-operatives' share of
retail turnover represents approximately 13% of the total
Slovak Republic turnover. 
1991  represented an important turning point for the consumer
co-operatives. Bank credits were increased after prices had
been liberated. These covered and still cover the means of
turnover and include the co-ops' stock. The interest rate
until  1990 was only 6%, but since early 1991 it has increased
to 19%, a 3-fold increase. This, combined with other market
influences, has created economic problems for many
co-operatives. 

Several operational and conceptional measures have been taken,
aimed at restructuring the purchase, wholesale, retail and
catering activities of consumer co-operatives and solving any 
information or control system problems they may have.
When preparing and realizing concrete measures, consumer
co-operatives benefit from the knowledge and experiences
gained from the work of consumer co-ops in economically
developed European countries, used to working in a competitive
market economy. 

The Slovak Union of Producer Co-operatives produce 4% of
consumer goods and one percent of the total production in the
building industry in the country.

The producer co-operatives were also affected by the
transformations of 1992.  Property relations between the
co-operative and member and between the co-operative and the
state were worked out. Producer co-operatives' rules were also
changed to bring them in line with those regulating co-ops in
economically developed European countries.

The transformation of producer co-operatives also has to
change the employee and work relationship to a member and
interest relationship. But this process needs more time.

The producer co-operatives play an important role in providing
employment for handicapped people. The government has made
concessions, giving these co-ops economic advantages which
help these types of co-ops to survive.

Structural changes and technical support are also imperative;
these should include  the creation of international joint
ventures.

The Union of Agricultural Co-operatives of the Slovak Republic
represents the agricultural co-operatives which farm 70%
percent of the  arable land in the Republic. 

A significant transformation has also been carried out in
accordance with the Law No. 42/1992 Zb. and restitutions. An
amendment to this Law is being prepared in order to extend the
business activity. 

Financial issues are the current priority due to  the present
non-profit activity of agricultural production within the
changing  macro - economic  conditions. Measures have been
taken to prevent a decrease in  production, and indeed to
foster the necessary conditions for a qualitative growth. 

An area we would like to revitalise is credit and saving
co-operatives. We are preparing a legislation that could allow
us - after its acceptation by our Parliament - to extend their
activity as another co-operative system working for the
benefit of  its members and for the development the whole
Co-operative Movement. The Co-operative Union of the Slovak
Republic and its four member unions work today to successfully
master the transition of co-operatives to the market economy
and to give them the necessary know-how to face growing
competition of other local and international competitors. We
are aware of our duty to work more actively  with our  members
in solving their problems and meeting their needs.

We believe that the spirit of the 150 years' tradition of the
movement in Slovakia and increased international collaboration
with members of the International Co-operative Alliance will
help us master the present problems. We also try to contribute
to the development of the Co-operative Movement in Europe and
in the world.

* Mr Adamca is President of the Slovak Union of Consumer
Co-operatives in Bratislava.