Cooperatives in Conflict & Failed States

1. Cooperatives in Conflict & Failed States Presentation to AIARD June 8, 2004 Ted Weihe www.coopdevelopmentcenter.coop

2. Synopsis • Cooperatives are: independent, member-owned & democratically governed businesses • Members accept risks and benefits including equity and patronage • Built on “collective identity & shared destiny” which is underlying factor in dealing with conflict, monopolies & failed states • 150 year history with major growth of cooperative networks after WWI, WWII, Korean War & mobilization of small producers in face of family oligarchies, usurers, & unethical middlemen in developing world

3. Synopsis (2) • Coops successful when imbedded in cultures where violence is often present • Create jobs for ex-combatants and minorities/IDPs through organizing small producers for high value markets • Bridging institutions between ethnic & sectarian groups for common economic objectives • Able to withstand violence with resilience

4. Examples • SE Europe: Bosnia, Montenegro, Macedonia • Lebanon • El Salvador, Colombia • East Timor, Nepal, Afghanistan • Mozambique, Rwanda & Sudan

5. Economic underpinnings of failed states • Lack of national unity, infrastructure,& enabling environment for private businesses • Lack of basic personal protections & securities • Poverty • Economy controlled by warlords and others than benefit from conflict

6. Relief Agencies • Prolonged delivery of relief • Lack of focus on self-sufficiency • Local people must own their reconstruction • Relief NGOs not business or profit oriented • Sustainable development only occurs when disabling aspects of relief stop

7. Cooperative Difference • Take economic perspective • Look for social cohesion and trust bonds • Avoid donor mentality • Require mutual self-help • Strengthen market linkages • Create broad-based enterprises

8. Coops & Stable Societies • Key issue: Devolving of power in stable and just ways • Peaceful channeling of basic needs • Democratic management • Pluralism and open membership • Economic system based on heightened levels of trust

9. Coops & Stable Societies (2) • Coop membership has stake in stability • Provide level playing field for all parties • Conduct democratic operations in which members demand transparency • Organize around strongly felt economic needs • Create critical mass of groups of individuals and develop democratic leadership

10. Bosnia • Created coops for minorities who were displaced by ethnic cleanings in Srebrenica and other towns • IPDs only willing to come back if rural jobs exist • Traditional region of quality cheese production • Local farmers came to Land O’Lakes and asked to form coops (not imposed) • Coops overcame ethnic tensions with mixed boards and employees

11. Montenegro • Collapse of zadrugas (collectives) with dairy cows distributed to 55,000 farmers • Anti-Western attitudes due to NATO strikes in Kosovo • 35 cooperatives formed within one year through monetizing Italian and US feed grains • Now have 48 cooperatives with inter-ethnic, inter-religious and differing political views

12. Lebanon • Repaired damaged infrastructure in southern, conflict ridden area through democratic committees • Developed successful coops • Socio-economic development reduced tensions and conflicts • Minorities able to freely express their opinions and take part in decision making

13. El Salvador • Rural electrification seen as peace dividend with peace accords • Electrified rebel towns (Santa Marta, Perquin) • Electric coop formed by ex-combatants • Coop opened membership to local populations and became bridging institution

14. East Timor • Coffee coops were controlled by Indonesians • With independence, reformed member-owned coops became #1 employer, income generator & exporter • Restored destroyed facilities and increased production and processing with quality controls for high value exports • Coops resettled refugees from West Timor and monetized rural economy • Coops provide primary health care

15. Mozambique • Network of 75 coop associations and 714 group businesses formed as part of recovery • Coops reduced costs to producers for inputs; generated high value crops • Reduced conflicts between farmers and cotton processing companies

16. Rwanda • 90 per cent of population rural • Donors retarded recovery of coffee sector (3 yrs. of relief) • Ag coops improve market access and exports • Coops part of culture with 29% belonging to informal insurance and savings groups • Credit unions bridge ethnic divides

17. Nepal • Credit unions able to resist Maoists and therefore are not targets like government land banks • Coping mechanisms include: dialogue with guerrillas at local level, strong community support, deposit savings in banks rapidly, & taking savings home by directors • Community immediately reconstructed credit unions after any attacks

18. Afghanistan & Sudan • Model credit unions now being formed in northern region of Afghanistan • Reform coop law in southern Sudan • Training in coop principles and practices • Cattle marketing and dairy coops likely to begin start-up • SPLM prefers coop model of development

19. Conclusions • Coops build on informal cooperation and are capable of rapid growth after conflicts • Coops create jobs for IDPs, refugees and ex-combatants • Coops help minorities deal with majority and distant markets, but need to become multi-ethnic to grow into successful networks • Coops bridge inter-communal groups • Coops rooted in cultures able to resist outside oppressors or guerillas

20. Further Analysis • Historical and antidotal information confirms important role of coops in conflict • Need research to confirm hypothesis • Undertake sociological documentation on specific impacts of coops in conflict • Build evidence on conditions where cooperatives can be first line of defense against conflict and essential for rapid recovery • To read paper, go towww.coopdevelopmentcenter.coop