What Co-ops are Not

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

              FOURTH WORLD CONFERENCE ON WOMEN : 
         ACTION FOR EQUALITY, DEVELOPMENT AND PEACE 
            BEIJING, CHINA, 4 - 15 SEPTEMBER 1995

       *****************************************************
        THE CONTRIBUTION OF CO-OPERATIVE BUSINESS ENTERPRISE
            AND THE INTERNATIONAL CO-OPERATIVE MOVEMENT
           TO ACHIEVEMENT OF THE STRATEGIC OBJECTIVES OF
                  THE DRAFT PLATFORM OF ACTION *
       *****************************************************

                      New York, March 1995


PREPARED JOINTLY, PURSUANT TO GENERAL ASSEMBLY RESOLUTION 49/155,

       BY THE INTERNATIONAL CO-OPERATIVE ALLIANCE AND 
    THE UNITED NATIONS DEPARTMENT FOR POLICY COORDINATION 
                AND SUSTAINABLE DEVELOPMENT

     * For information purposes only. Not an official document 
       of the United Nations and not officially edited


A NOTE ON WHAT CO-OPERATIVE ENTERPRISES ARE NOT
-----------------------------------------------
The term "co-operative" has been applied in the past to
organizations imposed by the state upon groups of citizens who
have been obliged to act as either producers or consumers within
the context of such imposed structures. Such entities have been
controlled as an integral part of the public sector, either as
state agencies or parastatal organizations. This was the case in
most of the countries which until recently had socialist-style
centrally planned command economies, as well as in many other
developing countries in which the state played a major role in
the economy. Ironically, in many cases state intervention arose
because of the very fact that genuine co-operatives,formed by
citizens to help them achieve their own objectives, had been so
successful previously that they were perceived to be the only
nationally organized movement capable of acting as a channel for
state programmes. In other cases, what were in fact forms of
state imposed collective were termed "co-operative" for
ideological reasons although quite distinct from true forms of
co-operative.

Such "pseudo-co-operatives" were in no way the autonomous
associations of persons united voluntarily through jointly-owned
and democratically-controlled enterprises which constitute
genuine co-operatives in market economies. Because they had no
stake in their success, "members" (who were not voluntarily
members) were not motivated to efficient participation. Often the
goals of the enterprise were identified by state agencies, with
little or no participation by members. Instead of members
participating in management of the "co-operative" managers were 
appointed by the state, and were in no way responsive to member
influence.

In such circumstances "co-operatives" and co-operative movements
came to function as vehicles for the operation of state
monopolies, and means for state sanctioned exploitation,
particularly of rural economies. They were often extremely
inefficient and usually open to corruption and abuse. they were
injurious to the economic and social well-being of "members" and
their communities. Such "co-operatives" had nothing in common
with the true purpose and character of the international co-
operative movement.

Although such co-operatives were clearly very different from the
genuine co-operative business enterprises which constitute so
important a part of market economies, and constitute a true
expression of citizen's interest in and preference for mutual
sel-help, the reputation of the co-operative movement, especially
in the affected countries, has been seriously prejudiced by this
experience. Because of the quite inappropriate use of the term
co-operative, this type of enterprise has become associated in
the minds of many with economic inefficiency and political
authoritarianism. However, the record of genuine co-operatives
in advanced market economies is proof that this form of
organization of business enterprise can be highly efficient even
in the most competitive market conditions, while at the same time
retaining a substantial degree of social and environmental
consciousness. As the Secretary-General of the United Nation
concluded in his latest report to the General Assembly (document
A/49/213 of 1 July 1994) :

"(a) Co-operative enterprises provide the organizational means
whereby a significant proportion of humanity is able to take into
its own hands the tasks of creating productive employment,
overcoming poverty and achieving social integration. By
effectively looking after their own interests and resolving their
own problems, they reduce pressures upon Governments while at the
same time creating significant public goods;"

"(b) Co-operatives contribute substantially to the common good
in market economies, principally by improving the efficiency and
quality of the economy, but also by assuring democratization and
environmental rationality. They constitute a model for a
people-centred and sustainable form of societal organization,
based on equity, justice and subsidiarity;" (para. 72).

In many of the affected countries genuine co-operative business
enterprises have been established, as well as new co-operative
movements, is some cases by means of the conversion of former
parastatal organizations, but mostly as a result of an autonomous
process has been promoted and supported by very substantial
technical assistance provided by the international co-operative
movement.