CO-OPERATIVE & POVERTY REDUCTION

CO-OPERATIVE & POVERTY REDUCTION Presentation by: ROBBY TULUS Former Regional Director International Co-operative Alliance 7th Asia- PacificCo-operativeMinisters’ Conference New Delhi,February 2-6, 2004

CO-OP & POVERTY REDUCTION: Past & Present Shifts in Anti-poverty strategies: • 1970s: Piece Meal or Band Aid Development Strategy • 1980s – 1990s : Structural Adjustment Program (SAP) • 2000s: Poverty Reduction Strategy Paper (PRSP)

CO-OP & POVERTY REDUCTION: Past & Present • 1970s: Anti-Poverty program used “Band-Aid” development approach • Co-ops became conduits for Anti-Poverty Programs • Dependency syndrome and beneficiary mentality created • Senegalese Proverb: “He who wants to help nine poor risks to become the tenth.”

CO-OP & POVERTY REDUCTION: Past & Present 1970s • SELF HELP WAS ABSENT : Co-operative Development was essentially based on a top-down approach. • Government’s original role as enablers (regulators & educators) changed to become users and managers of co-op enterprises. 7th Asia- PacificCo-operativeMinisters’ Conference New Delhi,February 2-6, 2004

STRUCTURAL ADJUSTMENT PROGRAM (SAP) – 1980s 1990s • Developed in 1980s by the Bretton Woods Institutions for debt repayment and new loan qualifications. • Focus was on Export-led growth, privatization, liberalization and efficiency of the free market.

STRUCTURAL ADJUSTMENT PROGRAM (SAP) – 1980s 1990s • SAP also became the main impetus during 2nd, 3rd and 4th Co-operative Ministers Conference in Jakarta (1992), Colombo (1994) and Chiangmai (1997) • Weakness of the SAP approach became clear after the Financial Crisis, esp. during 5th Conference in Beijing • Trickle-down economics did not work.

STRUCTURAL ADJUSTMENT PROGRAM (SAP) – 1980s 1990s • Contributed towards increased social & economic disparity • Increased poverty despite IMF & World Bank claim that SAP will reduce poverty • Happened at a time when social safety nets were being dismantled 7th Asia- PacificCo-operativeMinisters’ Conference New Delhi,February 2-6, 2004

POVERTY REDUCTION STRATEGY PAPER • Emergence of a new rethink about Poverty Reduction • Conceptualized in September 1999 during Annual Meeting of WB/IMF • Core principles are conducive for achieving Millennium Development Goal (MDG) of the UN. 7th Asia- PacificCo-operativeMinisters’ Conference New Delhi,February 2-6, 2004

CORE PRINCIPLES OF PRSP • Country driven • Results-Oriented • Comprehensive • Partnership-Oriented • Based on a long-term perspective

INVOLVEMENT OF CO-OPS IN PRS • PRS deals with common issues relevant to developed & developing countries • Common issues: sustainability, inclusiveness, good governance, people’s well-being (a better life)

INVOLVEMENT OF CO-OPS IN PRS • Co-ops are not just “for the poor” • Co-ops develop around an economic opportunity(usually due to a market weakness) • Co-op model is a way people choose to exploit that opportunity • Poor and less poor have a product to contribute – co-ops provides the self-help tools. 7th Asia- PacificCo-operativeMinisters’ Conference New Delhi,February 2-6, 2004

CO-OPERATION AMONG CO-OPS • Successful co-ops in developed Asian countries can help struggling ones in developing countries. Why? • Best practice of IFFCO, NACF, NTUC Income etc. demonstrates that government support is important at the outset. • However, success happens if professionalism have developed, and members are confident and more self reliant and ask government to withdraw support (e.g. Equity at IFFCO).

CO-OP OUTREACH WITH NETWORK PARTNERS • CO-OP MUST work together with other sectors: government, private, and CSOs in implementing PRS; • Build on best practices in PRS: e.g. SANASA, Amul Dairy, Fertilizers co-ops, SEWA, CUs in Indonesia & Thailand etc. 7th Asia- PacificCo-operativeMinisters’ Conference New Delhi,February 2-6, 2004

INVOLVEMENT OF CO-OPS IN PRS • However, economic growth is not sufficient to reduce poverty: The financial crisis demonstrated that the vulnerable masses slipped back into poverty • Poverty also stems from socio-political and socio-cultural factors, affecting the ability of a person to participate in decisions affecting his/her life

CHALLENGES & OPPORTUNITIES FOR CO-OPERATIVES IN ASIA • Challenges: • 900 million of world’s poor live in Asia (surviving with less than $ 1/day) • Nearly one in three Asians is poor • South Asia constitutes 50% of the world’s poor, of whom 450 million live in India • PRC has 225 million poor, 55 million more than South East Asia

CHALLENGES & OPPORTUNITIES FOR CO-OPERATIVES IN ASIA OPPORTUNITIES FOR CO-OPS: • PROMOTE GOOD CO- OP GOVERNANCE • SHARE BEST CO-OP BUSINESS PRACTICES 7th Asia- PacificCo-operativeMinisters’ Conference New Delhi,February 2-6, 2004

GOOD GOVERNANCE Successful Co-ops in Asia build pillars of good governance: transparency, accountability, risk-control, democratic. These pillars are critical to: • Improve organizational performance • Promote economic stability • Facilitate growth • Increase effectiveness of resource utilization • Enhance credibility of the co-op organization 7th Asia- PacificCo-operativeMinisters’ Conference New Delhi,February 2-6, 2004

LEARN FROM CO-OP BEST PRACTICES OF : • Consumer protection: the Japanese Experience • Competitive Strength of Agricultural Sector: NACF - the Korean Experience • Preserving ICIS in era of competition: IFFCO –the Indian Experience • Business & community development model: NTUC Income –the Singapore Experience

RECOMMENDATION I: It is recommended that the Delhi Conference confirms and advocates to the UN and other relevant Development Agencies the contribution co-operatives can make in the area of Good Governance and Business Development as value-added features in Poverty Reduction Strategies being undertaken by governments in ICA member-countries in Asia.

WOMEN EMPOWERMENT Women suffered disproportionately from the burden of poverty Women are systematically excluded from access to essential assets Hence the need for empowerment to improve their status in leadership and participation in decision-making.

GREATER OUTREACH IN PRS • People-initiated and member-driven co-ops have poverty-orientation • Not only do they raise capital based on self-help, they also build human and social capital

CO-OP: THE CONSCIENCE • CO-OPS stand out among civil society organizations: • They have build local, national, regional, all the way to global networks and structures • They have a universally agreed set of principles (ICIS) • They have concern for the community, and are efficient business enterprises at the same time 7th Asia- PacificCo-operativeMinisters’ Conference New Delhi,February 2-6, 2004

Business “The Market” Economic System Government “The State” Political System CO-OPS: “The Conscience” > Balancing Socio-Economic Systems Community Organization “Civil Society” Social System

CO-OPERATIVE OUTREACH • ILO Regional Workshop on PRSP in November 2003 showcased co-operative advantages to deal with the poor; • Recommendation 193 is an empowering tool; • Co-ops must reach out further to the enterprising poor; • MFI & SME are modernized versions of past co-op traditions.

CO-OP OUTREACH • Linking savings and loan programs with education & training activities to reduce poverty The XINJIANG Case Study • USE OF IT for providing services among the enterprising poor in local communities: home-workers, child-care, drivers etc. 7th Asia- PacificCo-operativeMinisters’ Conference New Delhi,February 2-6, 2004

CO-OP OUTREACH This issue was addressed, and became a key recommendation at the 6th Kathmandu Conference: The pace and depth of globalization created the urgency for public policy debates to formulate legislation & policies that supports co-op members who are being excluded.

CO-OP OUTREACH 5th BEIJING CONFERENCE became a major landmark, urging co-operatives and governments to establish new forms of co-operation – the building of viable networks and the joint efforts to seek ODA support.

RECOMMENDATION 2 It is recommended, therefore, that the Delhi Conference not only assess the progress and intensity of co-operation between the government and the co-operative movement – or the lack thereof –butalso to seek a new strategy through which co-operatives can become an integral part in the PRS process being undertaken by the corresponding governments in ICA member countries. 7th Asia- PacificCo-operativeMinisters’ Conference New Delhi,February 2-6, 2004

RECOMMENDATION 3 It is recommended that the “Delhi Conference” resolves to bring about enhanced partnerships among governments, CSOs and Co-operative movements – supported by international partners such as ILO, ICFTU, FAO and other relevant partner agencies – to ascertain that the co-operative sector becomes an integral part of the PRS processes being undertaken in ICA’s current as well as potential member-countries.

THANK YOU 7th Asia- PacificCo-operativeMinisters’ Conference New Delhi,February 2-6, 2004

Successful co-ops in advanced countries have developed time-tested instruments to adopt BUSINESS efficiency and professionalism • The value of equity and equality help the poor to increase their well being: a lesson from growth-based co-operatives. 7th Asia- PacificCo-operativeMinisters’ Conference New Delhi,February 2-6, 2004

7th Asia- PacificCo-operativeMinisters’ Conference New Delhi,February 2-6, 2004

CO-OPERATIVE & POVERTY REDUCTION