CO-OPERATIVE

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CO-OPERATIVE POVERTY REDUCTION
Presentation by ROBBY TULUS Former Regional
Director International Co-operative Alliance
7th Asia- Pacific Co-operative Ministers
Conference New Delhi, February 2-6, 2004
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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)

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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.

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CO-OP POVERTY REDUCTION Past Present

• 1970s
• SELF HELP WAS ABSENT Co-operative Development
  was essentially based on a top-down approach.
• Governments original role as enablers
  (regulators educators) changed to become users
  and managers of co-op enterprises.

7th Asia- Pacific Co-operative Ministers
Conference New Delhi, February 2-6, 2004
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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.

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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.

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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- Pacific Co-operative Ministers
Conference New Delhi, February 2-6, 2004
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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- Pacific Co-operative Ministers
Conference New Delhi, February 2-6, 2004
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CORE PRINCIPLES OF PRSP

• Country driven
• Results-Oriented
• Comprehensive
• Partnership-Oriented
• Based on a long-term perspective

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INVOLVEMENT OF CO-OPS IN PRS

• PRS deals with common issues relevant to
  developed developing countries
• Common issues sustainability, inclusiveness,
  good governance, peoples well-being (a better
  life)

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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- Pacific Co-operative Ministers
Conference New Delhi, February 2-6, 2004
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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).

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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- Pacific Co-operative Ministers
Conference New Delhi, February 2-6, 2004
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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

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CHALLENGES OPPORTUNITIES FOR CO-OPERATIVES IN
ASIA

• Challenges
• 900 million of worlds poor live in Asia
  (surviving with less than 1/day)
• Nearly one in three Asians is poor
• South Asia constitutes 50 of the worlds poor,
  of whom 450 million live in India
• PRC has 225 million poor, 55 million more than
  South East Asia

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CHALLENGES OPPORTUNITIES FOR CO-OPERATIVES IN
ASIA

• OPPORTUNITIES FOR CO-OPS
• PROMOTE GOOD CO- OP GOVERNANCE
• SHARE BEST CO-OP BUSINESS PRACTICES

7th Asia- Pacific Co-operative Ministers
Conference New Delhi, February 2-6, 2004
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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- Pacific Co-operative Ministers
Conference New Delhi, February 2-6, 2004
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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

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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.

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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.

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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

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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- Pacific Co-operative Ministers
Conference New Delhi, February 2-6, 2004
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Business The Market Economic System
Government The State Political System
CO-OPS The Conscience gt Balancing
Socio-Economic Systems
Community Organization Civil Society Social
System
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Business The Market Economic System
Government The State Political System
CO-OPS The Conscience gt Balancing
Socio-Economic Systems
Community Organization Civil Society Social
System
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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.

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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- Pacific Co-operative Ministers
Conference New Delhi, February 2-6, 2004
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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.

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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.

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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 but also 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- Pacific Co-operative Ministers
Conference New Delhi, February 2-6, 2004
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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 ICAs
  current as well as potential member-countries.

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• THANK YOU

7th Asia- Pacific Co-operative Ministers
Conference New Delhi, February 2-6, 2004
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• 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- Pacific Co-operative Ministers
Conference New Delhi, February 2-6, 2004
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7th Asia- Pacific Co-operative Ministers
Conference New Delhi, February 2-6, 2004
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7th Asia- Pacific Co-operative Ministers
Conference New Delhi, February 2-6, 2004
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7th Asia- Pacific Co-operative Ministers
Conference New Delhi, February 2-6, 2004