Cooperatives: a "Compelling Model of Economic Enterprise"

José Domingo Guariglia interviews FELICE LLAMAS, focal point on cooperatives for the United Nations Department of Economic and Social Affairs

Members of the Bhorle Community Seed Bank, a cooperative in Nepal.

Photo Credit: Sudeshna Sarkar/IPS

UNITED NATIONS, Oct 29, 2011 (IPS) - With 800 million members in over 100 countries, the cooperative sector is a globally important group of collective organisations. On Oct. 31, the United Nations (U.N.) will begin a year of recognising their importance by launching the International Year of Cooperatives (IYC) in New York.

A cooperative, according to the U.N., is "an autonomous voluntary association of people who unite to meet common economic, social and cultural needs and aspirations, through a jointly owned and democratically controlled enterprise".

Cooperatives can play a significant role in helping to achieve the U.N.'s Millennium Development Goals (MDGs) by 2015, experts say.

"International Year of Cooperatives 2012: Cooperative enterprises build a better world", planned by the U.N. and the Committee for the Promotion and Advancement of Cooperatives (COPAC), aims to raise global awareness about the work of cooperatives, strengthen their influence in society and promote discussion about the topic among the organisation's 193 member states.

The themed year also includes conferences, seminars, workshops, publications and film screenings, financed by participating organisations.

Member states' participation is essential, as one of the year's goals is to encourage governments to establish policies and laws that will boost the formation and growth of cooperatives. Some member states have set up national committees that coordinate events at a local level and also bring together parties involved at other levels, including cooperatives, media, development agencies and NGOs.

IPS Correspondent José Domingo Guariglia interviewed Felice Llamas, focal point on cooperatives for the U.N. Department of Economic and Social Affairs, about the role of cooperatives in socioeconomic development.

Excerpts from the interview follow.

Q: Why is it important to have an International Year of Cooperatives?

A: The U.N. designates international years to draw attention to major issues and to encourage action on matters or concerns that have global importance.

In this case, the IYC will highlight the contributions of cooperatives to socioeconomic development. In declaring the IYC, the U.N. seeks to help raise awareness of these contributions. The IYC also seeks to promote the growth of cooperatives as an important business model that can be leveraged for development.

Q: What are the characteristics or principles that define a cooperative?

A: Cooperatives are member-owned economic enterprises and self-help organisations which play an important role in improving the socioeconomic conditions of their members and their local communities.

Self-help, social responsibility and equality, democratic and participatory approach and concern for community – these are some of the values and principles that underlie cooperatives. Through their adherence to principles aligned with the common good, they contribute to social integration and cohesion and the well being of society at large.

Q: The theme for the International Year of Cooperatives is "Cooperative enterprises build a better world". How can cooperatives create a better world?

A: Cooperatives create, improve and protect the income and employment of their members and contribute to poverty reduction. Cooperatives support and promote small and medium enterprises in many sectors.

As people-centred businesses, cooperatives help promote social cohesion and inclusion. With their participatory and democratically based approach, cooperatives help empower women, youth, people with disabilities, older persons and indigenous peoples, thus promoting an inclusive society. These are all factors that help create a better world.

Finally, the world today faces unstable financial systems and increased food insecurity, growing inequality and rapid climate change and environment degradation. Cooperatives offer a compelling model of economic enterprise that is relevant for today's challenges.

Q: Cooperatives usually work at a very restricted and local level. Do you think cooperatives have a role in the achievement of the U.N. 's Millennium Development Goals?

A: Cooperatives have a role in helping the global community achieve the Millennium Development Goals. We know cooperatives that help in poverty reduction and in employment generation. Cooperatives employ more than 100 million people worldwide. The largest 300 cooperatives in the world alone have an aggregate turnover of 1.1 trillion dollars.

In many parts of the world, worker cooperatives, dairy and agricultural cooperatives improve the livelihoods of members. Agricultural cooperatives play an important role in the production and distribution of food supply, which helps food security.

In addition, cooperatives strengthen local and regional economies. Because cooperatives are owned by members, a significant portion of their income stays local, supporting other local businesses and generating tax revenues for the community.

It is also noteworthy that many cooperatives allocate a certain portion of their revenues to community projects like schools and health facilities. While the MDGs are global objectives, cooperatives operating locally are strongly contributing to meet those objectives.

Q: Has the U.N. given proper support to cooperatives worldwide?

A: The U.N. has been promoting cooperatives for many years and recognises the contributions of cooperatives to the U.N. development agenda. At the Social Summit in Copenhagen in 1995, the role of cooperatives in a people-centred approach to socio-economic development was underscored.

The U.N. Guidelines of 2001 and the International Labour Organisation Recommendation No. 193 of 2002 on the promotion of cooperatives have served to guide cooperative formation. These mechanisms encourage governments to provide an enabling environment and level playing field for cooperatives to compete alongside other types of businesses.

In 2012, the U.N.'s IYC will give visibility to cooperatives and highlight their contributions to society. The U.N. seeks to generate more support for facilitating and improving the international and regional collaboration of cooperatives.

Furthermore, we hope the IYC will promote an effective dialogue among governments, the cooperative movement, academia and other stakeholders that will identify strategies and priorities towards a plan of action beyond 2012.

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