COOPERATIVES AND SUSTAINABLE DEVELOPMENT

For The Bohol Tribune

In This Our Journey

NESTOR MANIEBO PESTELOS

Let me share with you some notes and insights I have gathered In preparing for my talk at the National Cooperatives Youth Congress last Thursday, 14 April. The talk was originally for a two-hour session, but it was reduced to thirty minutes a day before the scheduled activity. Hence, I had to cut drastically my 19-page draft speech.

Fortunately, a close friend and colleague, Daydee Padron, helped redesigned my hastily-done powerpoint presentation to fit the new time frame without losing the focus on youth involvement in cooperatives. Specifically, I was able to  inform the delegates about what is being done  in Bohol regarding this important aspect of mobilizing the youth for savings and eventual livelihood activities.

As I said in the previous column, I myself was inspired after interviewing managers of two outstanding coops, Jancel Barajan,  from the CEV Marketing Cooperative and Virgilia Perficio, of the recently-registered Bohol Heritage Conservation Marketing Cooperative.

I was also able to inform the delegates about specific recommendations from Niza Cagulada, Coop Development Specialist II, who has been with the Cooperative Development Authority (CDA) for 20 years. For the presentation, I was also able to interview Dr. Pomie Buot, president of the Tagbilaran Federation of Women’s Coops (TFWC), and also Vice President  of our NGO, Bohol Local Development Foundation (BLDF).

Prior to these interviews, I was also able to get some observations from Tonette Zablan, an accomplished researcher, newspaper columnist and a retired Sangguniang Bayan Secretary in Samboan, Cebu.  She used to head the research department in the now defunct Ilaw International Center established in Bool, Tagbilaran City through assistance in the 1980s.

For this column, I will report on some information I gathered from documents provided to me by friends and from my own internet-based research on the subject. This I will do to convince you that cooperatives deserve a second look in renewed efforts under the new global development agenda to seek ways and means to achieve what have been called the SDGs or Sustainable Development Goals, a subject I dealt with in previous columns.

I will proceed from macro to micro in giving you chunks of information which were not included in my presentation at the National Cooperative Youth Congress. From the paper, Cooperatives and Sustainable Development Goals, prepared by the International Labor Organization (ILO) and the International Cooperative Alliance (ICA), I learned the following:

“In total, about one billion people are involved in cooperatives in some way, either as members/

customers, as employees/participants, or both. Cooperatives employ at least 100 million people

worldwide.

“ It has been estimated that the livelihoods of nearly half the world’s population are secured by cooperative enterprises.

The world’s 300 largest cooperative enterprises have collective revenues of USD 1.6 trillion, which are comparable to the GDP of the world’s ninth largest economy-Spain.” [Paragraphing ours].

Cooperatives are considered as “value-based and principle driven organizations.”  By nature, cooperative enterprises are supposed to be sustainable and participatory form of business.

The paper says Cooperatives emphasize “job security and improved working conditions, pay competitive wages, promote additional income through profit-sharing and distribution of dividends, and support community facilities and services such as health clinics and schools. Cooperatives foster democratic knowledge and practices and social inclusion.”

Moreover, Cooperatives show resilience in the face of adverse economic and financial conditions.

“Hence, cooperatives are well-placed to contribute to sustainable development’s triple bottom line of

economic, social and environmental objectives plus the governance agenda, not least because they are

enterprises that endeavour to meet the economic progress of members while satisfying their sociocultural interests and protecting the environment.

“They offer an alternative model for social enterprise, with contributions to sustainable development well beyond job creation. Since cooperatives’ share in GDP and total enterprises is currently relatively small in most countries, their promotion and expansion could be an important instrument for achieving the Sustainable Development Goals (SDGs).”

The paper proceeds to show how Cooperatives play a key role in areas related to the pursuit of Sustainable Development Goals (SDGs) globally:

-Food security and nutrition

-Access to water and sanitation

-Sustainable energy

-Employment creation,

livelihoods and equitable

growth

-Sustainable natural resource

management

-Good governance

-Promotion of stable and

peaceful societies

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On Financial Cooperatives, the ILO-ICA notes:

“Financial cooperatives can provide some of the best means for financial deepening,and the financial basis for other kinds of development activities in many parts of the world. In many cases, they are the only formal financial organizations available, particularly in remote rural areas, where members can save and borrow money to develop their own businesses. Cooperatives also provide micro-insurance in

different forms contributing to financial stability.”

In my presentation to the National Congress of Cooperaive Youth leaders, I cited the challenges to mobilizing cooperatives in the pursuit of the SDGs in each country, as discussed in another paper, “The Role of Cooperatives in Achieving the Sustainable Development Goals - the economic dimension” , prepared by Jürgen Schwettmann, of the ILO.

The ability of cooperatives to effectively contribute to the achievement of the SDGs is limited by five factors, none of which seems insurmountable: 

The challenge of the [task] environment: in some countries, cooperative policies, cooperative laws and cooperative support institutions are still not fully conducive to the emergence and proper functioning of genuine, democratically controlled and economically viable cooperatives. Substantial progress has been made in the areas since the mid-1990s, but in some cases, liberalization may have gone too far, and expose members to fraud. 

The challenge of size: cooperatives must be big enough to reach the economic break-even point, and small enough to allow individual members to meaningfully participate. The optimal size of a cooperative is therefore dictated by economic factors (financial coops may reach the break-even point earlier than, for instance, marketing coops) and social and societal factors; the latter also explain why cooperatives are more successful in certain African communities than in others.

The challenge of management: cooperative members are consumers, farmers, workers, fishers, informal economy operators, artisans – they are not necessarily managers. Smaller cooperatives cannot afford to hire professional managers and must therefore rely on the skills of elected leaders, who may excel in their trade but have never seen a balance sheet. This is the reverse of the medal of “democratic management”, which needs to be addressed through training, education, and appropriate advisory and support services. 

The challenge of innovation: cooperatives are more prevalent in traditional sectors of national economies, such as commercial agriculture, retail distribution and finance. The modern economy, which is largely Internet-based, requires new forms of cooperatives. On the other hand, cooperative-type open source ventures such as Wikipedia, Mozilla and Linux, have been very successful; new form of cooperatives have emerged in the environmental sphere, such as green energy generating or waste recycling cooperatives.

The challenge of flexibility: the SDGs require cooperation, but not necessarily formal, registered, fully-fledged cooperatives. The present paper cited many interesting examples of applying cooperative principles in labour contracting, provision of business services, electricity distribution, software programming, waste management, crop processing and exporting, micro-insurance etc. which are carried out by organizations that are not necessarily called cooperatives. Cooperatives must stay true to their values while adjusting to the realities of a changing world.

In my presentation, I took note of the fact that the focus on involving children and youth in embracing the values and ways of the Cooperatives movement is difficult to do but it is on the right track.

Despite all the constraints encountered at the provincial and sub-provincial level on the key issue of involving the youth in the cooperative movement, the fact is that some initiatives have been undertaken by both the Government, through the CDA, NATCCO and the Coops themselves which can be studied for enhancement, rectification, and more importantly, for replication, to enable the youth sector to achieve critical mass in its involvement in cooperatives.

All we need to do is to analyze systematically and objectively each of the constraints and proceed to knock them down. You will say it’s easier said than done. We agree, but unless someone acts, we will forever look for inspiration before all the rest of those concerned can act.

Here is the dismal situation that we need to address:

Poverty is one of the reasons why the majority of the children worldwide are deprived of many of their rights.  In the Philippines approximately 31% of the population, or 27 million) are aged 7 to 17 years.

• 4 million are engaged in economic activity, and three fourths of these working children are in rural areas
• Of the 4 million working children, 1.5 million had stopped/dropped out of school because of insufficient family/household income
• 2.6 million are laborers and unskilled workers
• Of the 4 million, more than half work for one to four hours per day, and 37.7% work for five to eight hours per day.  Six out of ten children make less than $US10 per week.

I hope to return to this vital issue in future columns as I gather more information from colleagues in the Cooperatives movement. #Cooperativesanddevelopment

NMP/15 April 2016/5.01