I recently had the opportunity to address around 3,500 cooperators at the 13th National Co-operative Summit in Philippines. Below is the text of my speech.
Good afternoon!
 Thank you very much for the warm introduction! It’s a pleasure for me to be back in the Philippines and see very familiar faces. It is very inspiring to see this large gathering; more than the numbers, seeing the diversity across age, gender and regions. I would like to congratulate you all, the Philippine Cooperative Center (PCC) and the Cooperative Development Authority (CDA) on the occasion of 13th National Cooperative Summit. It was very motivating to hear the 100 years of co-operative movement in Philippines and the young representative from MASS-SPEC talk about the next 100 years. This year’s theme: Exceeding the Limits; Sustaining Excellence is very relevant in this regard. We have heard from people closely involved with the co-operative movement in the Philippines – from the House of Representative, from the Office of Cabinet Secretary, from the CDA, from PCC. Let me giveyou a perspective from the outside looking in on the issues and areas of opportunity.
The origin of the word limit comes from Old French limite - "a boundary;" from Latin limitem - "a boundary, limit, border, embankment. The dictionary defines ‘limit’ as a point or level beyond which something does not or may not extend or pass ("the limits of presidential power"); or boundary of an area or movement - "the city limits;" breaking point (I’ve reached my limit) or restriction of size or amount of something permissible (30 mph). So, when we say exceeding limits – are we breaking or limiting ourselves in anyway?
When we look at ‘limit’ from a mathematical sense - a point or value that a sequence, function, or sum of a series can be made to approach progressively, until it is as close to the point or value as desired. So it is a way of saying, "ignoring what happens when we get there, but as we get closer and closer the answer gets closer and closer to what we want."
Therefore, let’s not define our limits by a number but view it as a broader journey to reach the vision we set for ourselves. In this we should be pushing the limits of existing economic systems, social structures, and environmental concerns. In our aspiration to exceed limits we can draw inspiration from the founders of the cooperative movement - The Rochdale Pioneers. Let me quote from ‘Weaver of Dreams,’ by David Thompson. “The other shopkeepers sneeringly designated the co-op as the “weavers dream.” It is also important to see that the Pioneers kept their eyes on the prize, calmly developing the co-op stores and leadership skills while all about them the world was in revolution. The cooperative idea was born in a revolutionary era, but the dour Pioneers mounted a unique “counter-revolution.” When members exchanged money over the counter for the cooperative’s goods, an empire was born, an empire meant to equalize, not to exploit. The Pioneers believed that trading together could build a better world without conflict……Amidst the revolutionary working-class fervor, cooperators adopted, “Labor and Wait” as a motto, the beehive as a symbol to suggest industriousness. We could say they were aspiring to exceed their limits!
The Philippines cooperative movement had its early pioneers, in Dr. Jose P. Rizal and Teodoro Sandiko, who exceeded limits over a 100 years back. Dr. Rizal drew his inspiration from Robert Owen to put up a school for the poor community and a store with the help of his pupils on a purely cooperative basis. Even though he was arrested for treason, he persisted. Teodoro Sandiko, “The Father of Cooperation” during his travels in Europe, was impressed with the Raiffeisen movement type of cooperative and introduce it in the Philippines.
Having decided to push/ exceed limits, what do we do and how do we do? This is where the second part comes in – through sustained excellence. The answer to this, can vary from person-to-person. My guess is it would be the along the lines - excellence is about giving our best;  maintaining the pioneering spirit that the movement has its roots; striving to stay true to the cooperative values and principles; continuously improving on what we do; nurturing a culture that empowers employees; delivering quality services/ products enabling our members to live more fulfilling lives; and leveraging opportunities that lie ahead of us. I would like to stress on the leveraging opportunities.
It is important to understand the context within which we are operating and re-examine what we are doing and why we are doing. The context relates both to the external and internal environment. Cooperatives historically have had their origins in responding to the needs of their communities. We need to also look at trends and see how we can position ourselves.
While the wealth of the richest 62 in world increased by more than half a trillion dollars to $1.76 trillion; the wealth of the poorest half of the world’s population fell by a trillion dollars since 2010, a drop of 38 percent. Oxfam’s prediction that the 1% would soon own more than the rest of us, actually came true in 2015 - a year earlier than expected. The world is failing to tackle poverty, and the economy is rapidly changing to leave the majority of people behind. Economic inequality is both a political and moral issue. The trends on the external front include rising inequality, rapid urbanization, demographic shifts, climate change, water scarcity, technology proliferation etc. I would like to touch upon two - urbanization, and demography (aging and youth). On the internal movement front, there are issues relating to governance, leadership, professionalization, etc. I would like to address issues in relation to awareness and identity and siloed approach (or breaking away from it).
Urbanization, informal economy and cooperatives
According to the World Cities Report 2016 from the United Nations Human Settlements Program, there are now 29 megacities—those with more than 10 million people—in 2015, compared to just 14 in 1995. Manila ranks 19th on the list with a population of 12.9 million (Tokyo is number 1 with a population of 38 million and Delhi, number 2 with a population of 25.7 million). 80% of the megacities are in the developing world, in Asia, Latin America, and Africa. It’s “an indication that the center of gravity of the urban world is moving to developing countries.”
In the Philippines, the urban population will overtake the rural population for the first time in 2016 (this year!) and by 2030 it will make up 56.3% of the population. Metro Manila has 12% of the population of Philippines but contributes 47% of the GDP (The world’s 600 largest cities account for 60% of global GDP). What is of note here is the nature of employment. In the Philippines 39.9 million workers are employed (57 percent are in the services sector; 25 percent in agriculture, and only 18 percent in industry); 2.6 million are unemployed (representing 6.1 percent of the labor force); and 7.4 million are underemployed (comprising 19 percent of the labor force). 50 percent of young people in the labor force (up to 24 years of age) are unemployed. About three-fourths of all jobs, and specifically, two-thirds of urban jobs, are “informal” in nature. Among hired workers, six out of 10 are hired “informally.” About one-half of these workers are “informal” wage workers, 40 percent are self-employed, and 10 percent are unpaid family workers.
These numbers give a depressing view about the prospects for improved living standards for the young and those in the informal economy. As we know, the informal economy does not have any written rules or agreements, does not have fixed wages or fixed hours of work and mostly relies on daily earnings, does not provide privileges like social security and workplace benefits, work atmosphere is congested and unhygienic, and the workers usually fail to come together and address their problems through an association or a group. I recently read about the ban on endo, or end-of-contract workers, where workers are bound by a five-month timeframe so that companies will not make them regular employees after six months. While contractualization generates immense profit for companies, it is an entirely different matter for the workers. Endos get much less than what they are entitled to in jobs that are not even stable. Unfortunately, there were a few cooperatives involved here.
Worker co-operatives can ensure that workers enjoy the dignity to which their labor should entitle them. They have demonstrated how workers can pool their resources to build resilient communities based on rewarding work and social responsibility. Worker co-operative empower employees, view and treat their employees differently, give them more responsibilities, listen more carefully to what they suggest, reward them appropriately, and find ways in which they might invest in their co-operatives.
Let me give two examples, one from India and the other from Australia.
Uralungal Labor Contract Cooperative Society (ULCCS) is a worker owned and managed economic enterprises. It was founded in the 1925 by 14 members (of whom 11 were laborers) who wanted to create employment for construction workers and seed an organization that would benefit workers and their families. In its 92 year’s history, not a single day work lost due to labor problem and it has zero cost overrun on its projects. Laborers earn higher wages than lowest grade employee of the government, every members gets bonus twice a year, medical allowances, gratuity and social contribution.  In 2009, ULCCS invested $100 million, to develop India's first technology park (UL Cyberpark) in the co-operative sector. 
Capricorn in Australia deals with buying and selling auto parts for small businesses; I am sure there are thousands such in Manila and the rest of Philippines. It was established in 1974 by a small group of Western Australian service station owners hoping to level out the competitive playing field between themselves and ‘big’ business.  The core approach was to help members better manage their business by saving time through a single trade account and consolidated billing. The suppliers did not encounter any bad debts because the co-operative carried all of the risk and guaranteed payments of the account. Also, sales volume increased to such an extent that the cooperatives could get the suppliers to give a better price. Today, Capricorn has over 18,000 members who together recorded purchases of $1.54 billion with a net profit of $15.9 million.
Shifting Demographics
The demographic trends are impacting both the old and the young. The human population is getting older. Fertility is falling, and the world’s population is graying dramatically. While aging has been evident in developed economies for some time (Japan and Russia), the demographic deficit is now spreading to China and soon will reach rest of Asia Pacific. In the Philippines, the number of older people is increasing rapidly, faster than growth in the total population. In 2000, there were 4.6 million senior citizens (60 years or older), representing about 6% of the total population. The National Statistics Office projects that by 2030, older people will make up around 11.5 % of the total population. According to Juan Antonio Perez III, Executive Director of the Commission on Population (PopCom), “By 2025 to 2030, the country’s population would start to age. At present, there are around seven million Filipinos who are senior citizens, or aged 60 and above. We can say our population is not yet aging. We are still a young population but we are on the boundary of a demographic transition stage of an aging population.”
An ageing population increases the demand for health services. A smaller workforce will place a greater onus on productivity for driving growth. Caring for large numbers of elderly people will put severe pressure on government finances.  While Filipinos are living longer, their sunset years are being increasingly troubled by poor health and poor socioeconomic conditions. While the working class is expanding, but not as fast as the elderly that the working class supports, and considerably faster than the rate at which unemployment has gradually declined over the past several years. The country’s poverty rate has remained virtually unchanged at the same time, so the result is a growing population of people without some sort of economic safety net, whether stable employment, retirement income, family or government support. The “social protection systems have yet to catch up with social conditions.” The stark warning offered is that the government has just 10 years to do something about it, before the graying of the population starts to drag on the country’s overall well-being. Here again co-operatives need not wait. The simple idea of people joining together to provide themselves with health care can have increasing vitality in the years ahead.
I recently had the opportunity to visit the Saitama Cooperative Hospital. I thought I would be given a tour of the facility and shown all the fancy, modern equipment in place. Instead, I was first taken through a presentation by two women board members, Ms. Michiko Nakajima and Ms. Etsuko Isozaki on their citizen health promotion and prevention and civil participation. Their  activities include physical exercise in public facilities and parks, such as walking, dancing, practicing yoga, and other fitness activities. These are organized to draw citizens out of their homes and engage them. They believe prevention is better than cure. Social exclusion is another ill which ails the elderly. In order for our members to feel socially included they hold “Anshin Room activities,” that include tea parties (homemade cooking sessions, handicraft workshops, singing performances and games) either in members’ houses or in public or cooperative facilities. At these parties, members take part in, etc.” The cooperative has a system where members are trained to measure and keep a record of their health statistics (blood pressure, body fat, steps walked, etc.). In coordination with local government and other social organizations, Saitama combines health promotion with local community development. Co-operative health care, by distributing costs fairly and by placing greater onus on members for their own health, will assuredly be one of the best alternatives available.
Let me first congratulate the Youth Team from LAMAC Philippines that attended the Youth Summit in Bali last month and won top honors for their co-operatives pitch on Youth Engagement in Organic Farm Tourism. The Youth Summit also showed the interesting ideas youth have to form cooperatives in developing agriculture incubators (to support migrant workers with skills), solutions for migrant workers, catering services (targeted at workers), transport systems, student housing, e-waste recycling, mobile fish vending vans, performance art collective etc. If we consider, youth as future members of co-operatives and who will….
At the third International Summit of Cooperatives held in Quebec earlier this month, the youth urged that when we have events, we not have separate events for youth but integrate them in the agenda in all the events.
It will be apt for me to quote, Dr. Verghese Kurien, the father of the Indian cooperative movement, “We must build on the resources represented by our young professionals and by our nation’s farmers. Without their involvement, we cannot succeed. With their involvement we cannot fail.”
Awareness and Identity
Despite our 100 years plus history, cooperatives are having to struggle to make themselves aware and relevant in the minds of the public. This is an issue, not just in developing countries but also developed. Let me take two examples, from the United States and England. One in three Americans are co-op members, 75 percent of the U.S. landmass is served by electric co-ops and more than 100 million people identify as credit union members. In a public opinion survey in the U.S., conducted in 2015, only a minority (7 percent) indicated they are “very familiar” with the philosophy of cooperatives and only 25 percent identified as co-op members. A survey in England showed similar results. Only one in five people (22 per cent) could name more than one co-operative, while over two fifths of people (43 per cent) reported that they cannot think of any co-operatives. Would the results be any different in the Philippines? I would guess, not. Especially, when an earlier speaker mentioned that even legislators were unaware of the co-operative movement!
In many studies completed over the last ten years, it has been well documented that 90% of the consumers who know about cooperatives, will choose to do business with a cooperative, price and quality being equal. Consistently, polling in the USA has shown that, price and quality being equal, people prefer to buy a product from a co-operative. People are attracted to businesses that are grounded in human values and that are focused on serving their needs.
In addition to awareness, we need to assert our identity. Let me quote a passage from The Blueprint for a Cooperative Decade, “In a world suffering from a deficit of democratic representation and from short-termism, co-operatives demonstrate how business can be done not only differently, but better – not only for their own benefit, but for the world’s. However, to spread this valuable message, there must be clarity as to how co-operatives are to be defined and distinguished. This is important for the co-operative sector itself, in creating a powerful sense of shared identity; but it is also important that an identifiable co-operative message or “brand” is projected, which differentiates this form of business. The International Cooperative Alliance (ICA), developed a global co-­operative identity that all co-operative can align with and which differentiates us from other forms of business. The domain .coop is reserved just for co-operatives and organizations that support co-operatives. The Co-operative Marque is the ethical badge that's for co-ops for use alongside your own brand. There were 51 cooperatives registered in the Philippines. 51 out of 25,610 (registered as of December 31, 2015) co-operatives for something FREE! We could do better! We could also do better with our social media sites. We will not play a significant role in the future if we do not celebrate their distinctiveness. If we do not consciously and proudly proclaim who we are and why we do what we do, who will do it for us?
ICA as the global voice of the movement, is committed to promoting the co-operative model and advocating its effectiveness at various platforms. We were successful in getting co-operatives recognized as important players in implementing the Sustainable Development Goals.  Co-operative enterprises in the Philippines and elsewhere can boost their cause by responding to the United Nation’s call to action in achieving the 2030 Agenda for Sustainable Development. The Co-ops for 2030 (http://www.coopsfor2030.coop/en) is a campaign for cooperatives to learn more about the SDGs, commit to pledges to contribute to achieving the SDGs (often through initiatives that are already in place) and report their progress.
Cross-sector engagement
One of the criticisms of cooperatives is that we work in our own space, our silos. We are a consumer cooperative, a worker’s cooperative, an agriculture cooperative. However, we don’t actively work to engage across sectors. The founders of the cooperative movement realized early on the need to engage across the board. Let me again quote a few lines from the Weaver of Dreams –  the characteristics of the early Co-operative leaders in Britain was their understanding of the need for vertical integration, not only in order to attain economies of scale for their consumer operations, but also to extend the benefits of cooperation into other areas – manufacturing, farming, financial services and education. The culture of silos results in a lot of wasted resources. For example, it is estimated that between 20%-30% cash in credit cooperatives lies idle and not put to productive use.
Ian MacPhearson, the doyen of the co-operative movement and the drafter of the 1995 Co-operative Principles has this to say in his book, One Path to Co-operative Studies, “Co-operators must always work to ensure the strength of their local organizations. They must also find more ways to combine their local power into integrated systems that can wield influence on national, regional and even international levels. Doing so will require vision and a capacity to make difficult decisions.  An obvious example is the opportunity for different kinds of co-operatives to invest in joint ventures, such as agricultural and consumer co-operatives uniting to build a food-processing plant. Inevitably and properly, most of the possibilities for pooling resources occur first at the local or national level. To be done properly, such activities need to be carried out with vigilant business discipline; they should not be done as “a good thing” or as an act of charity on the part of one party or the other. The important point, though, is that co-operatives need to consider more carefully how they might better pool their resources, to make the best use of their members’ money.”
Collaboration need not be limited only to co-operatives; it can extend with government, civil society and the private sector. I read about the initiative here in the Philippines between the Jollibee Group Foundation, the corporate social responsibility arm of Jollibee Foods Corporation, the Kalasag Farmers Producers Multi-Purpose Cooperative, the National Livelihood Development Corporation and the Catholic Relief Service called "The Farmers Entrepreneurship Program." This cross-sector partnership project links small farmers in four provinces to Jollibee, the fastest growing restaurant chain in the Philippines with over 2,600 stores worldwide. The Kalasag project began as a cluster of about 30 farmers who registered as a cooperative to facilitate their business. Using improved techniques and training, the cooperative was able to increase its production from 8.7 metric tons of fresh and peeled onions per hectare to 13.8 metric tons. In 2009, the Kalasag cooperative became a regular supplier of Jollibee that further increased incomes for the farmers.
Philippines co-operative movement
Let me thank you all for the excellent work you are doing to promote cooperatives not only in the Philippines but also as members of the International Cooperative Alliance, taking your capacities to other countries.
You have done pioneering work in gender mainstreaming in cooperatives. The requirement to have strategies for gender equality, a budget for implementation, committee to oversee, a focal person, education and a report by the Board to General Assembly and social performance report to the CDA. It’s no surprise that the Philippines ranks seventh in the Global Gender Gap Index and with New Zealand is the only Asia-Pacific countries making it to the top 10.
The relationship between the Cooperative Development Authority and the co-operative movement is something which other countries and movements in the region can look upon. The CDA Vision 2020 envisions cooperatives as active and indispensable players in the process of development. The plan to have a National Co-operative Data and Information Repository (for efficient system of data/information gathering, storage, retrieval, processing and dissemination) and the establishment of Cooperative College are all commendable.
There are numerous instances when you have responded with alacrity to my request to share your expertise with other countries (Mongolia, Palestine, Malyasia…) during trainings and workshops. Thank you for that!
There are many reasons why the co-operative movement is very relevant today and can position itself as provider of solutions to the needs of tomorrow. When there is growing inequality (62 people own more wealth than half the world’s population) co-operatives offer the potential to create a just and equal society. When there is growing gap in access to food and goods, co-operatives can meet needs in a fair and reliable manner. When workers want to have control over their workplace, co-operatives provide the opportunity for them to be owners and have a say in their companies. When governments are withdrawing from the provision of social cooperatives, co-operatives can step in and create inclusive and compassionate communities.
Pope Francis in his Encyclical Letter Laudato Si’: On Care for Our Common Home (179) has this to say, “In some places, cooperatives are being developed to exploit renewable sources of energy which ensure local self-sufficiency and even the sale of surplus energy. This simple example shows that, while the existing world order proves powerless to assume its responsibilities, local individuals and groups can make a real difference. They are able to instill a greater sense of responsibility, a strong sense of community, a readiness to protect others, a spirit of creativity and a deep love for the land. They are also concerned about what they will eventually leave to their children and grandchildren.”
Our movement’s future will be defined by how well we understand our purpose and how well we capitalize on emerging opportunities.  Only organizations striving for excellence can find sustainable solutions to exceed limits. The theme for this Summit, Exceeding the Limits, Sustaining Excellence shows that you want to be leaders, want to be role models, want to be relevant not only today but in the future, want to improve and be innovative. The co-operative movement in the Philippines has a bright future! I wish you the very best!