Wednesday, October 26, 2016

IYER: CO-OP IMPACTS ON ASIA






Balu Iyer     
 
 
What impact cooperatives 
are making in Asia to sustainable
social, economic and environmental development?
 
 
 
Mr. Ban Ki-moon, UN Secretary General in his 2012 International 
Year of Co-operatives message said, “Co-operatives are a reminder to
the internationalcommunity that it is possible to pursue both economic
 viability and social responsibility.” Cooperatives in Asia embody this 
by making their presence felt in allsectors of the economy, by 
contributing to national growthand by creating and
maintaining employment. Social, economic and environmental 
development of members and the community at large (7th 
cooperative principle) has been the key
agenda of cooperatives, in letter and the spirit of such d
evelopment depends largely on enabling legislations and 
friendly/favorable policies. 
 
 
 
Cooperative membership:
 
In Iran, there are over 130,000 co-operative societies
with 23 million members or approximately 33% of the population;
in Indonesia 27.5% families representing approximately 80 
million individuals are members of
co-operatives; in Japan 1 out of every 3 families is a member of 
a co-operative; in India over 239 million people are members of 
co-operatives; China has 180 million members;
in Malaysia 6.78 million people or 27% of the total
population are
members of co-operatives; and in New Zealand 40% of the ad
ult population are
members of co-operatives and mutuals; in Singapore, 50% o
f the population (1.6
million people) are members of co-operatives; in Korea agric
ultural cooperatives
cover 90% of all a farmers while fisheries cooperatives ha
ve a 71% market share. In
Asia 45.3 million people are members of a credit union. 
 
 
Co-operatives contribution to national economies: 
 
 
In Singapore, consumer co-operatives hold 55% of the market 
in supermarket purchases and have a turnover
of USD 700 million; in Iran co-operatives contribute 6% to the 
Gross Domestic
Product (GDP); the Kuwaiti Union of Consumer Co-operative So
cieties handled
nearly 70% of the national retail trade in 2007; in New Zealand,
22% of the gross
domestic product (GDP) is generated by co-operative enter
prises; in Vietnam, co-
operatives contribute 8.6% of the GDP; and in Mongolia, 19
% of rural revenues are
derived from cooperatives.
Co-operatives and employment: 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
in the
Philippines majority of the 30,000 plus
cooperatives are located in rural areas and they provide 65,
215 jobs in rural areas
through direct employment with cooperatives. In India dairy
co-operative generate
jobs for 12.96 million families. In
Indonesia
, co-operatives provide jobs to 288,589
individuals.
What contributions can cooperatives make in helping
to empower
social groups such as youth, persons with disabilit
ies,
unemployed, older persons, women and migrants?
 
 
 
Today, nearly 75 million youth are unemployed around the world, a
n increase of
more than 4 million since 2007. By 2016, the youth unemployme
nt rate is projected
to remain at the same high level. The biggest challenge is
poverty or the working
poor (not only unemployment). The disenchantment and disengagement
of
younger people is already apparent, as they become aware of the
institutions and
systems they are inheriting, together with the immediate
economic challenges they
face (the “graduate with no future”). Cooperatives as m
ember owned, community
based business organizations can empower young people to start
enterprises. By
creating their own cooperative enterprises, tailored to loc
al needs, young
entrepreneurs can create economic development in their communi
ty. At the recent
World Conference on Youth 2014 held in Sri Lanka, the final dec
laration urged
governments of countries represented at the UN to promote
cooperatives as
vehicles to bring change in the life of those who comprise
the marginalized section
of the society.
 
 
 
Co-operatives contribute to the economic, social, and politi
cal empowerment of
working women in a variety of ways. Cooperatives provide women with
opportunities to pursue commercial activities ad access f
inancial services. The 'one
member, one vote' rule of cooperatives offers them the o
pportunity to make their
voice heard in order to improve their social and economic
status. Through
cooperatives, women are able to unite in solidarity and provide
a network of mutual
support to overcome cultural restrictions to pursuing comme
rcial or economic
activities. 
 
 
 
Cooperative enterprises provide a practical and relevant model fo
r domestic
workers and migrant workers to improve their livelihoods and
conditions of work.
There are now a number of well-established experiences of do
mestic workers
organizing themselves through cooperative enterprises, parti
cularly in the home
care sector. In India, the Self-Employed Women’s Associati
on (SEWA) works to
provide employment through the creation of cooperatives owned
and run by its two
million women members. Among other types of co-operatives, SE
WA has helped
establish are health care, home care, and child care co
operatives. In South Korea,
where domestic workers are currently not recognized as legally
holding ‘worker’
status, the South Korean Home Managers Cooperative works c
losely with the
country’s trade unions and has been staging rallies with them
calling for social
recognition and legal protection. Many other domestic workers’
cooperatives are
being formed in South Korea, including with migrant worker me
mbers, after the
recent change in the country’s cooperative legislation.
 
 
 
*
What are the challenges faced by 
cooperatives in Asia country?
 
 
ry?
While cooperative have been around in Asia for a while, they
have yet to uniformly
realize their full potential as powerful business model for so
cio-economic
development. The best cooperative practices are confined into
pockets and the ratio
of success in comparison to their huge numbers is low. Th
ere is general lack of
awareness and limited discourse in the public sphere about
cooperatives.
Historically cooperatives in Asia have been largely creations
of governments and
their promotion and development aligned and influenced with the a
genda of party
politics rather than the motivation to empower people throug
h autonomous
cooperative business organizations. For example, the enforce
ment of the 97th
amendment in India has been stymied and in Japan there are ef
forts to dismantle
the structure of agricultural cooperatives. Lack of support
, poor enabling
environment and excessive regulations have turned many cooperat
ives away from
being self-reliant entities and left members far behind with
no sense of belonging to
the cooperative. At the same time there is a clear lac
k of political will in promoting
innovations in cooperatives. 
 
 
 
Cooperative leaders on the other hand have enjoyed unbridled powe
rs for long
without accountability and maintaining the “status quo” ser
ves their interest. In
some cases cooperatives have ended up becoming the fiefdo
m of a few
promoters/founders. Where the elections are held, the sa
me set of people are
rotated in leadership roles, and continue enjoy enjoying the bene
fits over the years. 
 
 
 
A lot of abridged, interpreted versions seem prevalent in th
e region that makes
cooperatives a breeding ground for politically ambitious pe
rsons and for those with
vested interests.
ICA-AP is well aware of the situation and understands that s
uccess can be achieved
only through productive collaboration between governments and co
operatives. The
government should not only put in place enabling law and policy for oper
ations but
also appropriate judicial safeguards to protect member’s i
nterest. 
 
 
Self-reliant Co-
operative Act in India, Solidarity Framework law on co-operatives
 in Korea, the Philippines co-operative code are examples of 
where the law promotes an enabling environment for cooperatives. 
 
 
What lessons have been learned from Asia cooperativ
e experience in
contributing to development? 
 
 
According to the ICA Blueprint for a Cooperative Decade – “
With political
institutions in many nations struggling to keep up with a rapidly c
hanging world, it
is essential that citizens become increasingly resourceful,
enterprising and co-
operative in order to face the inevitable social and environme
ntal challenges we face
as a world community. Rarely has the argument in favour of
co-operatives looked
stronger than it does in 2012. But unless there is concer
ted action over the next few
years, the moment will be lost.” 
 
 
 
The downside learned on co-operative experiences across Asia
are their inability to
ensure active membership; lack of member communication; ge
neral lack of
recognition and awareness of cooperatives as economic instit
utions both amongst
policy makers and public at large; politicization and excessive r
ole of the
government arising out of the loop holes and restrictive pro
visions in the
Cooperative Acts; inadequacies in governance including that re
lated to Boards’ roles
and responsibilities; lack of professionalism in management; lac
k of good elected
leadership; small size of business and hence inability to at
tain financial viability;
internal work culture and environment not congenial to the growth a
nd
development of co-operatives as a business enterprise; and lac
k of efforts for capital
formation particularly that concerning enhancing member equity
and thus member
stake. 
 
 
 
The upside lessons learned from co-operatives acros
s Asia are that c
ooperatives which
emphasized member participation and adhered to laid out r
ules did well in the long
run; increase in the availability of products and services in
the communities
enhance patronage; governance that required record-keeping and
had control and
oversight of economic and administrative operations, financi
al checks and balances
helped protect against corruption, having international support
and alliances helps
in knowledge, skills and technologies; and the provision of incenti
ves for training
and planning;
 
 
What are the policies that promote an enabling environment fo
r co-operative
contribution to social development?
In its Promotion of Co-operatives Recommendation, 2002 (Re
commendation 193),
the International Labor Organization recommends (amongst oth
er things)
Governments should provide a supportive policy and legal framework
consistent
with the nature and function of co-operatives and guided by
the co-operative values
and principles. 
 
 
An important aspect of supportive legal frameworks
involves
ensuring that co-operative legislation underpins and protects t
he co-operative
identity. There is need for proper understanding of the ec
onomic and social benefits
that the co-operative form can bring that contributes t
o a broader diversity of
ownership forms than is currently the case. 
 
 
There is need f
or favorable policies
toward women and youth and participation of members in general
. In the Asia
Pacific region assistance has been provided to national parli
amentarians, legislators,
registrars and policy-makers through the comparative stu
dy of the way laws apply
to co-operatives in different jurisdictions, guidelines on h
ow to apply the Principles. 
 
 
 
The emphasis has been on development of capacity to respond to
co-operative
opportunities created by global and regional political events and
changes. There is
need to integrate the co-operative agenda into global developm
ent institutions, such
as the World Bank, and with intergovernmental policy-setting bod
ies, such as G20,
and ASEAN,
 
 
References:

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