Travels with the President

IMG_0385Traveling for four days through three countries (Japan, Korea and China) with the second International Cooperative Alliance (Alliance) woman President Monique Leroux was one exhilarating experience. The perks of traveling with the President is that you experience not only the red carpet laid out but also the opportunity it provides to hear directly about her vision for the Alliance and from the heads of leading cooperatives about their issues, concerns and actions they would like to see taken. TripAdivsor Rating –https://www.tripadvisor.com/img/cdsi/img2/ratings/traveler/s5.0-20402-5.png

 

Japan – Land of Cooperatives

 

Day one began with an interview to reporters from the Ie-No-Hikari Association (the monthly for Japanese Cooperative Farmers started in 1925 and with a large circulation among women) and the Japan Agricultural News. The first question was around women and their role in cooperatives. Monique reiterated both the Alliance and her own commitment to the UN Planet 50-50 by 2030. While participation of both men and women was important; it was more important to adhere to the principle of no restriction, provide open access and impart full education. In response to a follow-up question about the difference having more women on the Desjardin board made, she said, “More women by definition means more young people. It brings in a whole new network and new connections. Men and women manage risk differently; more women means careful management of the organization. Diversity brings a better conversation to the table.”

 

The second stop was lectures by Monique and me on the direction of the Alliance and the Asia-Pacific region respectively to a group of researchers attending the spring seminar on cooperative research. Mr. Masahiro Higa, Executive Director, JA-Zenchu in his opening remarks lamented that cooperatives were not getting the recognition they deserved, despite their scope, volume and contribution to the economy. Co-operatives as a subject was taught in primary schools a number of years back, no longer; the government which played an active role in promotion of cooperatives, was now more of a combatant. Dr. Masaaki Ishida, Professor at Ryukoku University providing highlights of the seminar said the two issues discussed – the Trans Pacific Partnership Agreement which worked for interests of global corporations not local cooperatives and farmers; and looking closely into the fragmented legal framework for cooperatives in Japan as there was no common cooperative law and each sector was governed by a separate law.

 

Monique in her address spoke about the Blueprint for a Cooperative Decade and the strategic priorities coming out of it. These were to:1) Increase proximity and connectivity with members through the strength of local cooperatives and the Alliance’s global reach; improve member participation and communication; 2) Sustainable Development and education – international representation of cooperatives on global issues and on the UN SDGs with particular emphasis on social responsibility and sustainable development; promoting education on cooperatives and nurturing young leaders; and 3) Growth, trade and innovation – promote cooperative brand, innovation and collective entrepreneurship and partnerships and growth. She laid emphasis on the participation of cooperatives from Japan and Asia at the global platforms such as B20. The issues discussed in these platforms revolved around financial inclusion, jobs, food security, and sustainability. Cooperatives had a lot of value to add on these issues and needed to be heard. The other issues she touched upon were the need for innovation and better handling of data as they related to cooperatives. In my presentation I touched upon the need for engagement with regional bodies such as ASEAN and SAARC. As an example, the ASEAN Economic Blueprint mentions cooperatives under just one section, agriculture. The diversity and scope of cooperatives in ASEAN have not been acknowledged in a region where 10% (60 million out of 600 million) of the population are members of cooperatives.

Dinner with JCCML with Takashi Kanno and Ishibashi at Fukushima farm

A bullet train ride the second day morning, took us to Fukushima City in Fukushima prefecture. The Great East Earthquake on March 11 recorded magnitude 9.0 and caused extensive damage in the prefectures of Fukushima, Miyagi and Iwate. The earthquake and tsunami that followed triggered the worst nuclear accident since Chernobyl at the Fukushima Daiichi nuclear power station. An account of the Japanese cooperative movement’s response to rebuild lives can be found at: Working together helps rebuild lives and farms. According to Mr.Takashi Kanno, Union President, Fukushima Mirai Agricultural Cooperative Association, “our intent from the beginning was to look ahead and secure livelihoods. In 2010, much before the earthquake struck, we purchased land and started the Shinkfukushima farm to train and develop a new generation of farmers. This land has now come in handy.” An example we saw was the Feliz Latte dairy farm being set up to rehabilitate farmers who had lost their livelihood in the critical area. General Manager Ishibasi of the Shinkfukushima while sharing fresh cucumbers from the greenhouse said, “The farmer training program focuses on rice and vegetable cultivation. We bring together young people, train them and try to get them interested in farming as an occupation. The training program has acceptance from the local government and they are now sending people to get trained in farming.” We also got to see the radiation monitoring center set up by the Fukushima JA to ensure that food supplied at their retail stores is safe and secure. The monitoring ensures that radioactive levels of locally produced agricultural products are within levels, provides traceability and ensure produces reaching the consumer are safe for consumption.

 

In the afternoon we took part in a meeting with Japan Joint Committee for Cooperatives. This group consisting of all 15 ICA members from Japan was formed in 2012, the International Year of Cooperatives, to give a platform for cooperatives to come together and address issues of common concern. An idea now being mooted is the formation of an umbrella organization, the National Center for Cooperative Promotion. The meeting was attended among others by, Mr. Choe Okuna, President, Central Union of Agricultural Co-operatives; Mr. Katsumi Asada, President, Japanese Consumer Co-operatives Union; Mr. Yuzo Nagato, President, Japanese Workers’ Co-operative Union; Mr. Shinichi Maita, CEO, National Federation of University Co-operatives Association; Mr. Hiromi Katsumata, Managing Director, Japan Co-operative General Research Institute; Mr. Masanobu Yoshinaga, Senior Managing Director, National Federation of Agricultural Cooperative Association.

 

The program in Japan wrapped up with a courtesy call on Mr. Hiroshi Moriyama, Minister of Agriculture, Forestry and Fisheries, Government of Japan. Mr. Moriyama said he was very aware of the ICA principles and values and spoke of the need to respect autonomy of cooperatives. This was welcome, especially in light of the reforms being undertaken by the JA group. He was keen to hear about ICA’s campaign at global platforms for the recognition of co-operatives as a source of sustainable growth, quality employment and basis for food security. The last point resonated as the G7 countries meeting in Japan was focused on promoting agricultural innovation and investment as farmers face the twin challenges of an aging workforce and extreme weather at a time when global food demand is increasing.

 

Korean cooperatives – mark of local, safe, quality products

 

Day 3 started with a call on Mr. Byenog-Won Kim, the newly appointed Chairman of NACF. Mr. Kim in opening remarks expressed his commitment to cooperative values and principles and  cooperatives as alternative voice for the vulnerable. He spoke about the need to improve income and boost productivity at the farm level and the distinctive role played by agriculture cooperatives, and in particular NACF. He was concerned the government was misunderstanding cooperatives and the autonomous character of cooperatives was being eroded. While the government had an oversight role to play, too much intervention and unnecessary meddling in the affairs of cooperative was coming in the way of good business functioning. He called on ICA to provide a global voice to stress with governments the importance of cooperative autonomy and self-help.

 

Monique in her speech to a large gathering of NACF staff reiterated the need for cooperatives to carry the message to governments that cooperatives were an important contributor to building community and people. The number one rank of NACF among agricultural cooperatives (number six in the World Cooperative Monitor 300), the 3 million farmer members, the 100,000 employees and $330 billion in assets were testament to the important role played by it in ensuring security for farmers and safe and quality products for the consumers. Monique spoke of the Alliance’s role to unite, promote and develop co-operatives. Given there were many in the audience from NongHyup Financial, she spoke about her experience in Desjardin and its path to becoming the 5th largest financial cooperative in the world. Following the financial crisis of 2008, Desjardin went through a thorough internal review and set new sights to transform itself to being a financial group that inspires trust through the commitment of its people, its financial strength and its contribution to sustainable prosperity. In doing so, it has stuck to its original mission to contribute to improving the economic and social well-being of people and communities and adhered to the Desjardins Group’s six permanent values of money at the service of human development, personal commitment, democratic action, integrity and rigor in the cooperative enterprise, solidarity with the community, and intercooperation.

 

The lunch at Korea House was attended by Ms. Inja Park, President, iCOOP; Mr. Byeong-won Kim, Chairman, NACF; Mr. Im-kweon Kim, President, NFFC; and Dr. Cheol-sang Moon, Chairman, NACUFOK. The Korea House is a place to experience various features of Korea traditional cultures including traditional foods, traditional performances and traditional wedding ceremonies. In response to a question about issues facing cooperatives in Korea, the three main ones bought up were autonomy of cooperatives, intercooperation and capital. Given the origins of co-operatives in Korea with government support, the oversight by government to this day went into minute details. An example given was the say government had in promotion of executives at NACF. The issue of intercooperation focused on relationship with members as owners. The issue of capital was similar to that faced by cooperatives in other countries that were desirous to grow and compete on a global scale. The challenges in attracting long-term funding on account of cooperative structure.

With ICA Korea membersAt NACF retail store

The visit to the Nonghyup Hanaro Mart Goyang Branch was an eye opener. Opened in 2001, it is one of the biggest distribution centers of agricultural and marine products offering variety of Nonghyup brand products from all over the country in addition to agricultural products of the area. The mart sells reliable agricultural products that are of good quality, fresh, and suitably priced. Walking around the store, signs could be seen where local products were emphasized and local producers acknowledged. In addition to physical stores, NACF has been expanding its online presence through the NHaMarket. The aim of the online mall is to connect farmers and co-operatives to customers. The market place had both B2C and B2B components. On the B2C side were the e-Hanaroclub where delivery from the nearest Hanaroclub was made the same day and the Food-bundle delivery where customized food was delivered. On the B2B side, in addition to agricultural input were the MRO shop (maintenance, repair and operation and delivery of office supply for NACF, member co-ops and subsidiaries) and the Restaurant Market (bulk sales for restaurant owners).

 

China – not surprised by inspired

 

On day four, the first visit was to the office of China E Coop, a national e-commerce platform supported by the All China Federation of Supply and Marketing Co-operatives (China Co-op) that was launched in November 2015. President Li Chunsheng in his introduction said, “the E-Coop was part of China’s Silk Road Economic Belt and 21st Century Maritime Silk Road initiative to promote rural e-commerce and provide cross-border electronic commerce.” As one enters the building, the bright orange logo G welcomes the visitor. The G, apart from being a letter (‘go to buy’) also signifies orange (symbol of freshness and health) and smiling face (to provide customers a pleasant experience).  Also displayed in the lobby were an array of well packaged products that could be purchased online. The platform is meant to merge China Co-op’s traditional business and network systems and the internet to serve the rural, agriculture and farmer. The plan is to eventually link all of China Co-op’s 147,297 primary cooperatives, 340,000 rural service centers and 2,406 county level co-operatives to the network.

With Li Chunsheng at China E CoopWith member of ICCIC

The meeting with members of the International Committee for the promotion of Chinese Industrial Cooperatives (ICCIC-Gung Ho) took place at the Peace Palace of the Chinese People’s Association for Friendship with Foreign Countries. This also happened to be the place where Rewi Alley, a New Zealander, lived and set up the Chinese Industrial Cooperative in 1937. The ICCIC these days develops cooperative organizations of all types and works to promote legislation and policies which enable cooperatives to thrive. Michael Crook, Liu Denggao and Yun Lin gave us a brief on the efforts underway to move away from the specialized law for farmers cooperatives developed in 2007 to a more generalized law for cooperatives. The need for the law to uphold cooperative principles, understanding of government administrators of distinction between cooperatives and corporations, emphasis on member education to ensure that a few did not dominate, member and non-member transactions, were all touched upon. Huang Feipeng, a young member of the farmers’ cooperative talked about the agriculture incubators in rural areas being set up for returning migrant workers. The incubator is a community supported activity to train the workers in agriculture, help in purchase and donation of equipment, develop the value chain and generate employment.

 

Our next stop was to the office of the All China Federation of Handicraft Industry Cooperatives (ACFHIC). Established in 1957, ACFHIC is a national collective economic organization formed by various sorts of collectives in urban and rural areas, industrial unions, handicraft industrial cooperatives and societies. Vice-President Wang Shicheng said that the sector had registered 7% growth last year and ACFHIC was focused on creating jobs, promoting entrepreneurship and supporting value-added services. To do this they were focused on 20 business sectors and interested in getting into providing financial services; an area where they wanted support. It came as a surprise for us to know that the Haier Group, a market leader in household appliances, was a collective.

 

The last official engagement was dinner with Ms. Wang Xia, President of China Co-op. She spoke of the role and responsibilities of cooperatives in China and their contribution to the economy, social development and livelihood. The recent reforms proposed by the government sought to infuse new vitality towards meeting the needs to the rural community. China Co-op which covers 80% of the rural areas had an important role to play through its supply and marketing network to modernize agriculture and improve the rural economy. Last year at China Co-op’s 60th anniversary celebration, President Xi Jinping congratulated their work and urged them to up their contribution. Ms. Wang reiterated ACFSMC’s commitment to ICA values and principles and continued support to the cooperative movement.

 

The highs and lows

 

There were many inspirational stories coming out from this visit which showcased cooperative response to member needs, innovation for better solutions and scale to magnify growth. The Feliz Latte milk farm in Fukushima and the incubation centers for returning migrant workers in Chengdu were examples of response to member needs. Farming is at the heart of the cooperative movement and it was exciting to hear efforts to keep the beat going. The commitment from Mr. Okuna of JA Zenchu and Mr. Kim of NACF to bring attention back to farmers, the efforts of Mr. Ishibasi to train young people in farming, and young people like Huang Feipeng (ex airline quality engineer for one) to set up agriculture incubators were all very exciting to hear. Building trust with the consumer and supporting local needs was very visible at the consumer stores in Japan and Korea. It was motivating to see the efforts taken by the cooperative in Fukushima to set up their own radiation monitoring center to ensure safe products reached the consumer and the wholehearted promotion of local farmers and locally produced goods in the Hanaro marts in Korea. It was breathtaking to hear the sheer scale and scope of the NHaMarket and the China E Coop platform to link the producer and consumer seamlessly.

 

The common concerns across the three countries were in terms of getting more attention of farmers and importance to farming; growing government interference and reducing space for cooperative autonomy; developing stronger intercooperation ties; and strengthening financial access for cooperatives.

 

So, what are my impressions traveling with the President? She is sharp, for sure. She likes to be prepared for any meeting (does not matter if it is a minister or a farmer). She doesn’t like surprises, especially when it comes to her schedule. She doesn’t hold back on questions till she gets to the heart of the matter. She is technologically and social media savvy and would like all cooperatives to come on board. Her passion is to inspire the young and get them on board the cooperative bandwagon.  Her focus is on the cooperative business community to foster business development for all cooperatives, explore new markets and identify growth opportunities. This will go a long way in boosting the cooperative economy. One sure learns a lot traveling with her. I did!

 

The trip would not have been possible but for the efforts of Kenki Maeda and Ayako Nakata in Japan; Lee Beom-seok and Gwangseog Hong in Korea; and Zhang Wanghsu and Xiaohang Zhang in China. Thank you all!

 

 

 

 

 

 

 

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HIP Cooperative Members in Japan

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The Meiji Shrine in Tokyo, dedicated to Emperor Meiji and Empress Shoken, located in a 200-acre park with 100,000 trees is a serene, austere, and calming place in the midst of bustling Tokyo city. At the main hall, one can toss some yen into the offering box (follow the ritual to bow head twice, clap twice, and bow once more), buy charms and amulets, and write out one’s wish on an ema. Ema’s are small wooden plaques that bear various pictures of animals or Shinto imagery and often have a wish written. Earlier in the day, I had seen a similar wish wall at the Health Aging Center of the Saitama Cooperative Hospital. This one was written on paper by the septuagenarian, octogenarian and nonagenarian residents. “I wish to live a 100 years.” “I want to eat my favorite food.” “I want to be close with my family.”  

 

I was in Saitama to get a sense of how a co-operative was addressing the issue of health care in Japan, a hyper-aging society. According to official statistics, in 2013, Japan’s population declined by a record 244,000 people.  Japan’s population began falling in 2004 and is now ageing faster than any other country on the planet. A report compiled by the government in 2012 predicts that by 2060 the number of Japanese will have fallen from 127 million to about 87 million, of whom almost 40% will be 65 or older. A baby girl born today in Japan can expect to live to 86 and a baby boy to 79. In Japan, it is not unusual for 70-year-olds to be driving taxis, working as watchmen on building sites and manning counters in supermarkets.

 

Historically, caring for the elderly rested with the family. However, with aging population, changing family structure and added economic pressures it was noticed that neglect and abuse towards older people was increasing and caring was restricting employment options for a growing number of women. Older people were admitting themselves to hospital more frequently and for long periods – not for any medical reason, but simply because they could not be looked after anywhere else. In 2000, the Japanese government introduced long-term care insurance case (LTIC), offering social care to those aged 65+ on the basis of needs alone. When people turn 40, they start contributing to LTIC, which is part insurance based and part tax-funded. On turning 65, individuals become entitled to wide-ranging social care support, from home-based help with cooking and dressing to residential respite, intermediate and permanent care.  An individual’s needs are assessed and they are assigned a care level which determines their entitlement.

 

At 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. “Our Kenko Hiroba 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. We believe prevention is better than cure.” Social exclusion is another ill which ails the elderly. “In order for our members to feel socially included we hold “Anshin Room activities” that include tea parties either in members’ houses or in public or cooperative facilities. At these parties, members take part in homemade cooking sessions, handicraft workshops, singing performances and games, 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.). “This comes in handy in two ways; one it helps the individual to monitor and two provides the physician data over time.” In coordination with local government and other social organizations, Saitama combines health promotion with local community development.

 

Saitama Medical Co-operative is located in Saitama Prefecture, just north of Tokyo. With a population of 2.88 million people, this region is characterized as the most rapidly aging nationwide. It also has the lowest density of physicians. At the end of March 2014, Saitama had 242,098 members and 2,209 employees. The total share capital was $61 million and turnover around $189 million. Saitama Co-operative Hospital was set up in Kawaguchi City in 1978.  Because of the high quality of its medical services, it enjoys a high ranking: second among 20 emergency hospitals in Kawaguchi City, and the best in the private sector. While walking around, I noticed a table where three people were seated and talking to people who stopped by. I was told these were volunteers who were getting new individuals to sign on as members. One of the volunteers was Mr. Ikazawa, who was a member of the hospital cooperative for 30 years and a volunteer at the table for 16 years. When I asked him why he was doing this, he said, “this is my passion, this is what I want to do! I feel included in my age and would like to be doing something useful. The cooperative hospital has given me my health and I would like to give back in some way.”

 

With the implementation of LTIC in 2000, competition was introduced between for-profit and non-profit

service providers. As a consequence, the role of the state kept diminishing from that of service provider to one of financier and regulator. A fee for service system is in place where instead of restricting access, a fee schedule is used to keep prices under control. As Natasha Curry, senior fellow in health policy at the Nuffield Trust puts it. “The oil in the machine is the care manager who holds the budget and puts together a package of care.” While the private for-profit sector has a lion’s share their focus is more on number, keeping a leash on costs and in maximizing profit. In these heavily regulated markets, cooperatives are understood to provide better access to health care, and more importantly, for the increasing number of Japanese excluded from services due to unemployment and low income.

 

Health cooperatives in rural areas are affiliated with the National Welfare Federation of Agricultural Co-operatives. They are secondary-level organizations owned and controlled by primary cooperatives, where individual members are the beneficiaries of health and social services provided by hospitals and clinics. Those functioning in urban areas are registered under the Consumer Co-operative Law and are owned and controlled by consumer-members. HeW Co-op Japan is a national federation of health and welfare cooperatives. The Federation comprises 111 member cooperatives and the Japanese Consumers’ Co-operative Union. Members demanded for the co-ops to undertake care services because they wished to take care of the elderly, including their own parents and relatives who needed such services. The workers’ coops were set up by middle-aged workers who wanted to secure jobs facing the discontinued government’s unemployment relief project and then took part in the provision of elderly care service. In addition, the government encouraged co-operatives to enter the welfare business because they had organized a high percentage of the female population, in both urban and rural areas, who had been expected to provide services as care workers.

 

In the afternoon, I had the opportunity to visit the Matsudo Local Welfare Business Place “Ajisai” (hydrangea) run by the Japanese Worker Cooperative Union (JWCU). In the absence of a legal framework for worker cooperatives, JWCU is registered under the NPO Law. The center had outsourced long-term care from the Chiba Prefecture. In addition, the center ran a job training program for people with disabilities and also helped them to live independently through a combination of medical, daily life, self-support training, and employment transfer support. Ms. Fumie Kobayashi, who manages the center had worked in various care centers but was disappointed with the treatment meted out to the residents. She told me, “Our center is unique in that people with disability who we train are employed as caregivers to the elderly. This empowers the individual and gives them the confidence to stand on their own.” Walking around the center, it was moving to see the mutual support being provided by the caregiver (person with disability) and the care receiver (elderly) to each other! We then moved to the Urayasu Local Business Place where JWCU was managing three after-schools centers outsourced from Urayasu City. This place in comparison to the earlier centers I visited was a complete contrast. It was noisy with children running around and normally formal and staid Japanese adults (70+) chasing them!

 

What does the future hold for long term health care and co-operatives in particular? Professor Akira Kurimoto and Ms. Yurie Kumakura touch upon this in their recent paper, “Emergence and evolution of co-operatives for elderly care in Japan.” The 2014 LTCI Act introduced the idea of integrated community care (ICC), prioritizing the coordinated care provision in communities that is targeted to be fully implemented in 2025. ICC is defined as a system that provides housing, medical care, long-term care, prevention services and livelihood support in an integrated manner in communities (it assumes an approximate range of a junior high school district). It aims to enable people to continue to live in their hometowns until the end of their lives with a sense of security once they are in severe need of long-term care. Under the gloomy forecast of a rapidly aging society and the ever-increasing competition among service providers, these co-ops are struggling to secure their position in this quasi-market. They are moving to create a model of ICC by networking diverse service providers based on original ideas of building the communities where people can live with security and dignity. They need to create a unique ICC model by combining associational and entrepreneurial aspects of co-operatives.

 

From my brief visit to health cooperatives and the conversations I have had, I have seen the difference co-operatives can make. Co-operatives as member-based organizations put health and well-being ahead of profits.  They play a crucial role in care for the individual, prevention of illness, and social wellbeing of members and/or their dependents. Co-operatives play a key role with vulnerable populations, including the disabled, seniors, and the mentally ill and adopt an all-inclusive membership base. Even countries that boast of a youth bulge are not immune to the aging reality. A recent editorial in the Indian Express looks at rising elderly population in India (60-plus population jumped from 76.6 million to 103.8 million, between 2001 and 2011. This number is already close to the current population of Japan!) and describes it as a nascent industry that could turn into a veritable money-spinner just as private school education already is! Is this what we want our elderly population to be?

 

As we were leaving the Matsuda center, I was handed a gift made by the residents by the chirpy, active lady who had earlier served us tea. She was 76, healthy, felt inclusive, and passionately involved her work; in short HIP.  Wouldn’t we all like to be that in our old age? Being part of a co-operative may just be the answer.

 

References:

 

Akira Kurimoto & Yurie Kumakura (2016) Emergence and evolution of co-operatives for elderly care in Japan, International Review of Sociology, 26:1, 48-68, DOI:

10.1080/03906701.2016.1148341

 

Economist (2014) The incredible shrinking country.  http://www.economist.com/blogs/banyan/2014/03/japans-demography

 

Going on 60: Policymakers and politicians can no longer afford to ignore India’s rising elderly population

http://indianexpress.com/article/opinion/editorials/senior-citizen-population-india-policies-2766240/

 

Statistical Handbook of Japan 2015 by Statistics Bureau, Japan

http://www.stat.go.jp/english/data/handbook/c0117.htm

 

Japan’s solution to providing care for an ageing population

http://www.theguardian.com/social-care-network/2014/mar/27/japan-solution-providing-care-ageing-population

 

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New Zealand Co-operatives: Showing the Way Ahead

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Coming from New Delhi, Auckland was breath of fresh air. The clean air, clear blue sky, the serene streets were a welcome change. The International Cooperative Alliance (Alliance) team led by Monique Leroux, President; Charles Gould, Director General; Zhang Wangshu, representing President Li, ICA-AP Regional Board and I were in Auckland to interact with business leaders from Co-operative Business New Zealand (CBNZ), the representative body of co-operatives and mutually-owned enterprises. The whirlwind one-day interaction, set up by Ian Macintosh, CEO of CBNZ gave us a flavor of how cooperative businesses in New Zealand were dealing with some of the core issues affecting cooperatives world wide in the areas of governance and representation, capital infusion, research and attracting young to the movement.

 

New Zealand ranks as one of the most cooperative economies in the world[1]. New Zealand’s cooperative enterprises generate three percent of GDP, employ 43,000 people, and have a combined turnover of $41 billion. They are responsible for around 95 percent of the dairy market, 90 percent of the export meat market, 50 percent of livestock; over 90 percent of the fertilizer market; 40 percent of the whole sale pharmaceuticals and 62 percent of the grocery market. No discussion about cooperatives in New Zealand is complete without Fonterra. A walk across the road from our hotel took us to Fonterra’s headquarters where Nicola Shadbolt, Blue Read, and Philip Turner gave us a guided tour of the Shareholders Wall and the timeline that traced Fonterra’s history from 400 cooperatives in 1930 to 9 in 1998 to a mega company in 2000. It is worth quoting lines from Fonterra’s Annual Report, “Fonterra is a global, co-operatively-owned company with its roots firmly planted in New Zealand’s rich land, working to unlock every drop of goodness from the 22 billion litres of milk we collect each year and sharing it with the world. Our ambition is to build a globally relevant Co-op which makes a difference in the lives of 2 billion people by 2025.”

 

The meeting with the heads of CBNZ’s leading co-operatives, banks and mutuals[2] zeroed down to the issue of governance in co-operatives. The central questions were around member interest and representation on one side with running of the business on the other. The dual challenge in member-owned cooperatives are those of ensuring expertise on the Board (does a representative represent his/ her constituents interest or the organizations interest?) and costs to the business in relation to participative model of governance. Experts in co-operative governance have theorized that good leadership and management, conformity to co-operative principles, supportive local culture, and lack of government interference are all results and not causes or co-operative’s success[3]. Success of a co-operative depends upon on how effectively it is designed to serve the purposes central to its user members.

 

Co-operative in New Zealand like the counterparts elsewhere have been trying to address the issue of governance design in a complex organization.  These revolve around appropriate purpose central to members (board choose); the right operating system (roots it to its character as a co-operative); patronage cohesive governance (board hear the voice of members, or expect them to exercise their right of exit); and secure, retain and continually nurture member allegiance[4]. Fonterra has a co-operative structure that adds layers of farmer bodies and processes to protect the interests of its farmer shareholders. It cut its board size from 13 members to nine and added four outside board members to make itself more efficient and quicker to respond to market conditions. The Fonterra Shareholders’ Council is an elected national body of farmer shareholders whose role is to represent the views of all Fonterra shareholders as suppliers, owners and investors. The Council consults frequently with farmers, and meets regularly with the Board to ensure Shareholders’ voices are heard and considered. Succession planning is a major issue when it comes to in the dairy cooperatives and cooperatives in general. The Governance Development Program was established by the Fonterra Shareholders’ Council and Board of Directors in 2006 to help address dairy industry and rural sector succession needs. The primary objective of the Program is to create a pool of future farmer leaders by equipping participants with the skills and capabilities required to govern rural organizations and potentially Fonterra.

 

The issue of capital is particularly important for co-operatives in New Zealand that desire to grow and compete on a global scale. Co-operatives face challenges in attracting long-term funding on account of their cooperative structure. These relate to the withdrawable nature of co-operative membership shares and co-operatives do not maximize returns in proportion to capital contributed, but give benefits to members in proportion to transactions done with the co-operative. The ICA Blueprint for a Co-operative Decade calls for financial propositions which provides a return, but without compromising on member control. Fonterra has again addressed the issue of capitalization with the development of Trading Among Farmers. The Fonterra Shareholders Fund forms part of the broader Trading Among Farmers structure and enables investors to buy units in the Fund that benefit from the Economic Rights of a Fonterra Co-operative Group Share (Economic Rights). The Economic Rights are the rights to receive dividends and other economic benefits derived from a share. These rights do not include the right to hold legal title to the share (i.e. to become registered as the holder of the share), or to exercise voting rights in the Fonterra Co-operative Group. The latest ICA publication, The Capital Conundrum for Co-operatives is timely. There is a whole chapter, Perspective from the Ground: Fonterra Co-operative Case Study by Professor Nicola Shadbolt and Alex Duncan that introduces the innovative capital instruments created by Fonterra Dairy Co-operative in 2012.

 

Chuck, Zhang and I took part in a panel discussion at the University of Auckland to introduce the Alliance and work carried out. The discussion was well attended by faculty, students, those with interest in cooperatives and curious about cooperatives. The panel was moderated by Dr. Lisa Gallagher from the management department whose interest lies in exploring the role of learning and knowledge processes for innovation for cooperative and collaborative business models and ownership structures. We were able to cover a broad canvas, Chuck speaking about ICA at a global level, me about ICA at the Asia Pacific region and Zhang about the All China Federation of Supply and Marketing Cooperatives. The question and answer session was interesting with questions posed about relevance of open membership as outlined in Principle 1 – One voluntary and Open Membership to the role played by cooperatives in strengthening the triple-bottom-line of economic, social and environmental responsibility.

 

An exciting research collaboration underway is between the University of Auckland, Massey University (the only NZ university to provide a postgraduate course in co-operative) and CBNZ.   According to the lead researcher Dr. Elena Garnevska, the study will provide an accurate picture of New Zealand’s co-operative economy landscape. The project will comprehensively list the top 30-40 co-operatives in New Zealand, and analyze their contribution to the New Zealand economy based on objective data. It will also provide the basis for a longitudinal study of the industry, which will be able to map long-term trends and cycles.

 

Roopa and I decided to stay back a few days to explore the North Island. I wanted to see if I could visit some co-operative along our drive from Wellington to Auckland and asked Ian Macintosh and Ramsey Margolis, the founder of Huia Cooperatives. Both went out-of-their way and arranged a few meetings. Thank you! Ramsey and I had been in touch by email but had never met in person. It was wonderful meeting him and hearing about the exciting initiatives that were underway with cooperatives in New Zealand.

 

Loomio was suggested by my colleague Santosh who said the ICA-AP Youth Committee was using it to make group decisions. What excited me was that Loomio was in the technology space, started by a group young people and managed as a cooperative. I could not pass the opportunity to meet this group when we were in Wellington. Richard Bartlett, one of the co-founders of Loomio could pass off as a geek from Silicon Valley – t-shirt and shorts, a beard, and sipping coffee in a hip coffee shop; which by the way was selling coffee from cooperatives. I started off by asking Rich about the origins of Loomio. “Well our roots were in the 2011 Worldwide Occupy movement. We had our own Occupy Wellington where we would debate issues, have voices heard, and reach a consensus. Loomio was born out of the felt need to have a tool that gave everyone in the group a voice and where decisions were reached by consensus.” Was forming a cooperative a direct outcome? Nah! “We didn’t have any such thought when we started. Benjamin Knight and a group of us approached Enspiral, for support and we got our start there. The idea of a cooperative came much later when we were looking at how our shared purpose to give a voice and achieve positive social impact together could be translated into form where decisions are not centralized with a few. We felt the co-operative model gave each of us a voice, say and ownership.” How’s it working so far? “It’s been exhilarating! Loomio as a tool is gaining traction and we are also adding, those who start off as employees, as owners! The look on the face of the person who has just been told that he/she is an owner is priceless! As with any growing entity, we are trying to raise money. Our investors don’t care too much that we are structured as a cooperative, that’s good; but we care and want to see this work!” For Roopa, who is based in Silicon Valley, this was all new and very exciting! There may be a potential convert here who could carry the message to the Valley!

 

 

 

Accuro which is Latin for ‘taking care’ is a 45 year old health insurance provider. As a cooperative they are focused on keeping premiums low while maintaining comprehensive health insurance plans that truly benefit their members. Geoff Annals, Chief Executive Officer, who we met at his office talked about Accuro’s focus on members and how they were constantly looking to connect with members and seeking ways to give back.  He narrated the case of an elderly woman who was continuing to pay premium for both herself and her husband. Her husband had died a few months back and she had not made any claims. Geoff was concerned and called her to make sure she knew details of the policy and about the claim. She said she knew the policy well and also about the claim; but was well-off did not need the money, was happy as a member of the cooperative and wanted to continue paying!  

 

Farmers Mutual Group or FMG as they are better known, is the older co-operative in New Zealand (1905). In 2007, the Farmers Mutual Group Act was passed by Parliament to help FMG preserve its mutual structure, where policy holders are actually members rather than just customers, and to modernize its powers and authorities. According to Lisa Murray, General Counsel, this was done to ensure FMG was better able to account to its members. I asked Lisa about how FMG was upholding its co-operative nature. According to Lisa, “from a business perspective, at FMG we do what’s right, we are proud of what we do, we are in it together, and we make it happen. From a community perspective, we know farming is tough and can be isolating. Our Farmstrong initiative helps shift the focus from illness and depression to one of living well and staying well. Farmstrong is designed to help farmers connect with others, stay active and enjoy life.”

 

Tony O’Boyle, Director at Farmlands showed us around the store in Masterton. Farmlands Co-operative Society Limited was born more than 50 years ago from the desire of farmers to work together to get themselves a better deal. Today more than 1,000 staff service 56,000 shareholders through a network of 83 stores that results in a turnover in excess of $2 billion annually.  Tony started as a dairy farmer and these days is mainly into sheep and beef farming. He believes that the the success of the dairy co-operative can be replicated with wool. As a dairy farmer, he was chairman of the Fonterra Shareholders Council. He spoke glowingly about his experience serving on the board of Fonterra and the process (aptitude tests, personal interviews) followed to determine suitability to serve on the board. “Effort is made to ensure that the most competent pool is placed in front of members to choose from!” Laudable, indeed!

 

The visit to New Zealand and seeing cooperatives in action was exhilarating! There is much to learn from the thriving co-operatives, their constant focus on members, the innovations being put in place to address governance and capital, and the research to analyze contribution of co-operatives. One visit is not enough!

 

 

[1] Measuring the Size and Scope of the Cooperative Economy; http://www.davegraceassociates.com/News___Events.html

[2] http://nz.coop/membership/

[3] Shah, Tushar: Catalyzing Cooperation: Design of Self-governing Organizations

[4] The Governance of Large Co-operative Businesses; http://www.uk.coop/newsroom/governance-large-co-operative-businesses

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What Women Want

Participants with the gender treeI didn’t need to shock myself with an electric hairdryer like the character Nick Marshall (played by Mel Gibson) in the movie, What Women Want, to know what women in co-operatives want. I got to hear about it at the Tagaytay+20 Third Women Conference on Status of Women in Cooperatives in the Philippines. The conference was held to mark 20 years since the first conference in 1997 and 10 years after the second in 2006. The three-day conference was filled with engaging presentations, stimulating panel discussions, absorbing tea-break conversations, and inspiring field visits. Of special note were two panels, one with youth participants and the other with men (take away – gender[1] sensitization is not just women explaining women/men to men).

 

Let’s start with what women don’t want. Not words, not sympathy, not hand outs, not quotas, not being stereotyped, not being sidelined. So what do they want? Level playing field, accountability, being counted, provided opportunity, being encouraged, and being recognized (as individuals and not just mother, wife, sister, daughter). Sounds fair enough to me.

 

Women in cooperatives want a level playing field. The statistics is glaring. According to the ILO-ICA Study – Achieving Gender Equality: The Cooperative Way: women account for over 50 per cent of membership and over 50 per cent of the clientele; but occupy way less than 50% of the co-operative board and management positions. Women only cooperatives have produced visionary leaders and successful businesses. Why then are women not so prominent in mixed (men and women) cooperatives? It’s not that they are not capable. Women like Ifat Rayisi from Iran who heads the National Bee-keeping Union spread over 22 provincial unions and caters to 73,500 beekeepers across the nation abound. Her impassioned plea, from a country coming out of sanctions, we are capable and up to the challenge. All we ask is don’t rule us out on account of our gender.

 

The common view from co-operatives is that, we don’t discriminate, we give women all the opportunity. This was not good enough for the women at the conference. They said, prove it! Let’s have more accountability from board and senior management. We have a ready model to emulate from the Philippines where cooperatives have to submit a gender report to their board and to their regulatory authority showing how they have fared. How about all co-operatives committing to it?

 

Make us count! The refrain at the conference was, “If we are not counted, then we are not seen and not heard.” The experience in data collection for the ICA-AP second data study (the draft findings were presented at the conference) made this very glaring – In terms of the status of data collection and cases, while recommendations of Tagaytay are being carried out for gender disaggregated data by a few cooperatives, the lacunae is wide open when the majority of countries are considered. The Study also found that, when co-operatives keep track of how women fared, they were found to be more gender sensitive in approach and programming. Dr. Nandini Azad author of the Second data study observed, “Women representation at higher reaches is still not significant; however, the trends and emerging issues indicate new threshold of change.” Mercedes Castillo from the Philippines Cooperative Development Authority said, “In 1997 women participation in board was 10%; today it is 40%. However, we need to examine quality in decision making.” Kanako Miyazawa, speaking on behalf of Masako Shimbo, chair of the ICA-AP Women Committee pointed out that the government of Prime Minister Shinzo Abe requires companies to submit a report of how they have promoted women (some numbers being tracked – ratio of women, comparison of working years, ratio of women in management….). If the Japanese government can, why not cooperatives?

 

Overcome stereotype. The women at the conference wanted to get over hearing how compassionate they were as mothers; how noble as wives; and how obedient as sisters and daughters. All fine; but how about recognizing us for what we bring and do? How about able co-operative leader, capable business woman, sound manager….? Don’t worry, they said, “We will continue our role as mother, wife, daughter, sister…even though they are unpaid and unrecognized!”

 

Educate us – there is no budget when it comes to women attending trainings. Board members and directors (largely men) have no problem accessing funds when it comes to attending meetings and seminars abroad. A participant remarked, “In fact, you see the same faces at all trainings; it does not matter whether the training if for consumer or trade or any other. Imagine what a jack-of-all my master is!” Cheeky comments apart, this is a serious issue. Lack of budget seems to be the reason for keeping women away from trainings and seminar. Coming back to the stereotype, if women are care givers; imagine how much they would give to cooperatives if they were properly trained? Ms. Elena Limocon, General Manager of Lamac MPC and Vice Chair of the ICA-AP Women Committee said her cooperative makes it a point to regularly send women to international conferences and encourages them as resource persons to share their cooperative best practices with others. Way to go!

 

Encourage us to contest – ICA took 114 years to elect it’s first woman President, Pauline Green and just a day to elect it’s second woman President, Monique Leroux. This was greeted with a resounding applause during my presentation. But, this needs to get down to all levels of cooperatives. Men are often quoted as saying, “women don’t come forward and contest for elections. But, women at the conference felt otherwise. There are impediments placed even before nomination. Encourage us, let us know you will fully support us; see what difference this makes.

 

Facilities at work. One of the men at the men panel discussion remarked, “We provide our women with nursery and day care.” A participant during the tea-break told me: It’s good they provide such facility! I am going to ask my board the same. But, why not say, we provide our employees with nursery and day care facility? Men would then bring their children to the facility and allow their wives to work? How about it?

 

Start-us up – Luzviminda Villanueva from the Philippine Commission on Women remarked, “Women in co-operatives – they save, they avail of credit to support individual livelihood or small enterprises. However, are they succeeding? Are they growing their business?   Think of the potential – growing women in micro enterprises, creating more jobs in communities, bringing more children to schools, better homes, healthy families. Think yes, but act more. Pacita Juan founder of Echostore (http://www.echostore.ph/) provided a direction in her keynote – “cooperatives are instrumental in doing the institution and capacity building. Cooperation is key: The O in ECHO is for organization. We complement each other in helping empower entrepreneurs and cooperatives.”

 

It was thrilling to see Cielo Garrido, CEO San Dionisio Credit and Teepee Gile from RedRoot Artists Cooperatives (http://www.redroot.coop/) take stage. Cielo spoke about the challenges of being a woman and young CEO in a long-standing cooperative. Teepee inspired the audience with her journey from one of the poorest regions of Philippines to starting her own cooperative business. Some of the milestones she read out, from one full time employee to 15 full time employees; from one computer to diversified equipment; from below minimum wage to competitive wages; from hundred thousand annual gross sales to multimillion annual gross sales. Both had these words of advice to the young (and old) – accept limitations, build passion from the ground up, understand own co-operative and co-operative movement, use the co-operative principles as a guide, always try new things, spread new ideas, cultivate and innovate; always make something that will make you and those around you proud.

 

“Character” is one way to describe Audie Samson or as his name card states, call me Dudz! I feel a more appropriate label would be “gender evangelist.’ Dudz talked about the need for men to talk to men as almost all gender sensitization trainings were a group of women explaining women/men to men. Almost all gender issues are explained from a woman’s perspective, even if we say that both women and men are victims. The widespread acceptance of traditional gender roles has meant that, women

have been devalued for what they do, and men have been devalued for who they are. This needs to change.

 

My article is replete with examples from the Philippines; not because the conference was held there. In a country where cooperative is a religion; gender equality is held at a higher pedestal. Every cooperative member wanting to make gender a priority should make a pilgrimage to the Philippines. In the process you will learn to make a few dance moves too (this can be a chapter in itself)!

 

I did not realize I would end my article on What Women Want with a quote made by a man on What we should want! Mr. Moosavi from Iran to a resounding applause quoted his translated version of lines from Khalil Gibran:

 

Women try to be equal with men.

What a futile and vain effort is equality with men!

Equality with men who have dragged the world into chaos and war?

It should not be the case.

Should think in another way that: perhaps, men try to be equal with women

Equal with women who sleep all night with the dream of peace in war-torn history!

 

 

The comments expressed are in an individual capacity; but commitment to gender are both in an individual and organizational capacity

[1]The Cooperative Principle Guidance note:  In this 21st century the binary concept of sex and gender as singularly male or female is no longer sufficient to reflect the gender realities of all people. Gender is not just about men and women. It is about how people identify themselves and includes people who are transgender or have chosen gender re-assignment. The 1st Principle of non discrimination on grounds of gender extends to all persons.

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CO-OPERATIVES AND THE ASEAN ECONOMIC BLUEPRINT: Call for greater Co-op engagement and visibility

CO-OPERATIVES AND THE ASEAN ECONOMIC BLUEPRINT: Call for greater Co-op engagement and visibility

By Drs. Robby Tulus and Balu Iyer[1]

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A quick glance on ASEAN  

The Association of Southeast Asian Nations (ASEAN) is a regional grouping that was started in 1967 at the height of the Vietnam War, and with only five member countries: Indonesia, Malaysia, the Philippines, Singapore and Thailand. Its original formation was aimed at protecting the five countries against the threat of the political and economic instability during the cold war era. With the end of the cold war, ASEAN moved on to enhance economic development and bring all countries in a strong co-operative framework. Brunei Darussalam joined in 1984, followed by Vietnam in 1995, Lao PDR and Myanmar in 1997, and finally Cambodia in 1999, bringing the total to 10 member countries.

The ASEAN set for itself an ambitious economic agenda called the ASEAN Community by December 31, 2015. The ASEAN Community has three pillars as stipulated in the Bali Concord II: (1) Political and security community, (2) Social-cultural community, and (3) Economic community. Each Pillar has a blueprint for the realization of the ASEAN Community. The ASEAN Political-Security Community (APSC) is designed to address threats to regional security and political stability and to promote democracy and human rights in the region. The expressed goal of the ASEAN Social Cultural Community (ASCC) blueprint is to build “people-centered”, socially responsible, and environmentally friendly ASEAN. It lays down specific actions to be undertaken in education, social protection, environmental sustainability, engaging with civil society, and building an ASEAN identity.

The ASEAN Economic Community (AEC) reflects the ASEAN’s strong commitment to deepen as well as broaden economic integration.  The AEC blueprint outlines the four pillars of the AEC that will be achieved through liberalization of trade in goods, services, and investments: (a) a single market and production base, (b) a highly competitive region, (c) a region of equitable development, and (d) a region fully integrated into the global economy.

Co-operatives misrepresented in the ASEAN Blueprint.

The ASEAN Economic Community Blueprint is an important document, and has to be taken seriously not only be by the ASEAN states but also by businesses and by not-for-profit organizations worldwide. To be inclusive and engaging, the AEC Blueprint needs to be understood by ASEAN citizens and community as well as business institutions alike.  However, for this to happen, there needs to be serious efforts to be inclusive and engaging. In fact, most of the ASEAN citizens are not aware of what the ASEAN is trying to do in the integration process. The ASEAN Secretariat, located in Jakarta, ought to be the agency responsible to promote the AEC Blueprint to the public.

What is striking is the fact that the co-operative sector is so lightly represented in the AEC Blueprint document. The document seems to have misrepresented the co-operative sector by mentioning only Agricultural Co-operatives. Point 40 in the document states: “Promote ASEAN agricultural cooperatives as a means to empower and enhance market of agricultural products, to build a network mechanism linking agricultural cooperatives, and to fulfill the purpose of agricultural cooperatives for the benefit of farmers in the region”.

There are 60 million co-operatives members in the ASEAN region out of a total of 640 million. This is quite significant. After all, co-operatives in Malaysia (Bank Kerjasama Rakyat), Singapore (NTUC Fairprice and NTUC Income), Indonesia (Semen Gresik), Vietnam (Saigon Co-operative) are among the 300 largest co-operatives globally. Co-operatives are composed of different sectors such as consumers, workers, financial (savings & loans, insurance, and banks), women, fisheries, health, schools, universities, etc., all of which are very active in the ASEAN Region above and beyond the Agricultural ones. It is thus incumbent upon the ASEAN authorities, represented by the ASEAN Secretariat in Jakarta, to work with National Co-operative apexes (or federations) in the Region, including the ASEAN Co-operative Organization (ACO). Admittedly, ACO is still a young organization as compared to the ICA, although ACO has recently been very active in promoting inter-cooperative networks and business linkages in the region. For an ASEAN vision that proclaims to sustain economic growth for poverty eradication, address the development divide and accelerate regional integration in an open, outward-looking, inclusive and equitable manner, limiting cooperatives to one-sector alone is ostensibly a distorted view.

Why Co-operatives would benefit ASEAN’s development

 

One must admit that in many of the ASEAN countries, the growth of cooperatives mirrors the actual needs of the country. It is reflective of the nation’s economic growth where there has been an increase in the number of cooperatives alongside the increase in the national GDP per capita. The early co-operatives were an important socio-economic mechanism where the combined capital and capabilities from individuals of similar interest from diverse backgrounds helped individuals to uplift their living standards.

The birth of Singapore’s early co-operatives (co-op) was sparked in the 1920s in response to helping people when there was a lack of financial institutions for the common man. With no banks or finance companies to turn to for financial help, people had little choice but to turn to profiteering moneylenders. 90 years on, credit co-ops continue to champion its social mission, members helping members save for their future needs and providing unsecured loans with affordable interest rates. Today, co-ops provide a wide range of services from thrift and loan, childcare, eldercare, security to healthcare and employment services, benefitting not only members but also the larger community. As Singapore faces an ageing population, the Co-op Movement saw the formation of new co-ops to help improve quality of life for seniors.

In Malaysia, as in other ASEAN countries, co-operatives have gained increased recognition as a third economic sector. It is a unique blend of the two other sectors, namely the public sector that emphasizes on the social welfare of the community, as well as the private sector, which focuses on profit maximization. The 2011-2020 National Cooperative Policy (NCP) launched by Prime Minister Datuk Seri Najib Tun Razak in Malaysia attests the government’s recognition for the cooperative movement’s role in economic development. It recognizes the cooperative sector as one of three contributors to the country’s economy with a target income of RM50 billion by 2020. The NCP charts the direction for cooperative development without compromising the values and philosophies of cooperative, i.e. transparency, trustworthiness and honesty.

In the same manner co-operatives in Thailand, the Philippines and Indonesia are consolidating well to correct the negative public perception that it too closely associated with state run businesses, and to enhance their quality socio-economic performance by fixing shortcomings such as the scarcity of quantitative data, limited upstream policy advocacy, lack of standardization, the drive towards the Green Economy.

Credit Unions in most ASEAN countries are also actively engaged in financial literacy and financial inclusion programs, stressing on the importance of savings and at the same time ameliorating rural and urban credit needs. Education is considered a vital part of the credit union tradition, promoting the habit of thrift and educating members how to use credit wisely. National credit union federations of ASEAN countries are working together under the auspices of the Asian Confederation of Credit Unions (ACCU). ACCU’S mission is to make credit unions more relevant community-based financial institutions. Its regular membership is composed of 4 ASEAN countries, i.e. Indonesia, Philippines, Thailand and Vietnam, whereas affiliate members include Cambodia, Malaysia, Myanmar, and Singapore. Only Laos and Brunei in the ASEAN region are not yet members of ACCU.

In a recent Regional Consultation held in Jakarta for high-ranking government officials in charge of co-operatives, as well as co-operative leaders from ASEAN (++) countries, the need to provide better social protection was discussed at length. It is important for co-operatives as an institution in the formal economy to help transform what are often marginal survival activities (“informal economy”) into legally protected work. In that way marginalized people in the informal economy could be fully integrated into mainstream economic life by providing them with decent work. The region’s 14 million migrant workers face difficult working conditions with little social protection. Job insecurity could thus be worsened by economic integration despite the promised increase of job opportunities for low/ semi-skilled workers. The Regional Consultation also addressed the issue of food sovereignty in ASEAN countries, where the availability of safe and nutritious food for a healthy lifestyle is no longer sufficient because we need to know more about where, how, by and for whom food was actually produced. Access to food and services by the poor must take precedence because food availability must be based on domestic production, and staple food supply and prices must remain stable. The Green Economy was discussed at length inasmuch as engaging co-operatives in renewables and waste recycling could be a promising business proposition, hence reducing environmental risks and ecological scarcities. The concept of “Circular Economy” introduced by China-Coop was well received by delegates from ASEAN countries. The Consultation was ensued by an exposure to the National Exhibition of Small and Medium enterprises of Indonesia, showing ASEAN (++) participants the exquisite work of Indonesian artists and artisans, displaying magnificent artwork and handicrafts from all over the country.

European Union, the International Labor Organization and the United Nations: ASEAN to follow?

 

The ASEAN is often touted as the Southeast version of the European Union (EU). While the EU and the ASEAN both have diverse member-states and core-states, the diversity of ASEAN economies and their varying levels of openness present a unique challenge in achieving regional economic integration under the AEC. There is need for ASEAN to recognize the multiplicity of actors and take the EU example in the way private sector is defined. According to the Communication of the European Union: private sector activity can take many forms and will impact on economic development in various ways. The private sector is highly diverse, ranging from enterprising individuals to large multinational corporations and financial institutions; from enterprises creating shareholder value to people-centered social businesses, cooperatives and workers and employers’ organizations. They may operate at a local, national, regional or international level, in rural or urban areas, in the formal or informal sector and in very different country contexts. Each of these private sector actors requires different conditions and incentives to contribute to development, entailing differentiated approaches to their support and engagement for development.

The International Labour Organization in June 2015 adopted a new international labour standard that is expected to help hundreds of millions of workers and economic units move out of informality and into the formal economy. Cooperatives are mentioned in this Recommendation as part itself of the transition, both in terms of enterprises & in terms of employment. Cooperatives are also mentioned in the legal and policy frameworks sections, by stressing that an integrated policy framework for the transition to the formal economy should include the promotion of entrepreneurship and of different types of business models, including cooperatives and other social and solidarity economy units.

The United Nations 2030 Agenda that includes 17 Sustainable Development Goals approved by all governments including ASEAN in September 2015 recognizes the diversity of business models, including co-operatives: “We acknowledge the role of the diverse private sector, ranging from micro-enterprises to cooperatives to multinationals, and that of civil society organizations and philanthropic organizations in the implementation of the new Agenda.”

A combination of measures is needed, and co-operatives as a people-centered enterprise could play an important role in this regard. On the one hand, co-operative as could help increase incentives for the formalization of those still living in the margins of society, by providing appropriate legal support, securing property rights (especially land), that can be used as collateral for loans. On the other hand, measures need to be taken to improve productivity and working conditions in the informal sector through a safer working environment and easier access to markets, finance, infrastructure and social services. Co-operatives could lead the way in providing decent jobs, sustainable livelihoods and inclusive solutions to social problems by way of:

  • Associating with other individual producers in making their production and commercialization/marketing of their good or services more predictable and economically sustainable;
  • Establishing SMEs with a single production system and achieving economies of scale enabling it to turn into a formal economy enterprise;
  • Creating and/or joining a credit and saving system that will give them productive credit, enabling them to consolidate their economic activities, laying the basis towards the formal economy.

 

Concluding remarks

 

Co-operatives need to be more distinctively acknowledged in the ASEAN Economic Community Blueprint in as much as co-operatives have a potential important role in the transformation of socio-economic life of people in urban and rural communities of ASEAN countries. ASEAN governments need to take co-operatives into account by carrying out consultations with the sector when developing economic policies and regulations, creating legal frameworks and undertake administrative practices on social and economic issues. The co-operative sector deserves equal treatment with other economic sectors, in as much as co-operatives have their distinctive structure that are member-driven, hence a unique sector that is well integrated in communities and built from the ground up.

References:

  1. ASEAN Economic Community: http://www.asean.org/communities/asean-economic-community
  2. ASEAN Community 2015: Integration for Whom? IBOB International, Policy Brief, April 2015
  3. Asian Confederation of Credit Unions; http://www.aaccu.coop/index.php
  4. Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: http http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX%3A52014DC0263&qid=1400681732387&from=EN
  5. ICA Blueprint for a Cooperative Decade: http://ica.coop/en/publications/blueprint-co-operative-decade
  6. Roelants, Bruno. Cooperatives are Key to the Transition from the Informal to the Formal Economy. CICOPA. Sectoral Organization of the International Cooperative Alliance for Industry and Services.
  7. Saigon co-operative makes top 10 Asia Pacific retailers list, Anca Voinea, September 2015: http://www.thenews.coop/97792/news/co-operatives/saigon-co-operative-makes-top-10-asia-pacific-retailers list
  8. The ASEAN Economic Community: A work in Progress: http://www.adb.org/publications/asean-economic-community-work-progress
  9. World Co-operative Monitor: Exploring the Co-operative Economy 2012

[1] The views expressed by the authors are in their personal capacity and do not represent the views of ICA or its members. Drs. Robby Tulus served as Regional Director of ICA-AP from 1996 to 2001; Balu Iyer is the current Regional Director of ICA-AP

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Cooperatives in Timor Leste – Together service to community; together solution to poor

Together service to community; together solution to poor. This is the first thing Elizario Ferreira points out in their credit union poster as I enter their office.  Elizario, started the Cooperativa Clibur Uniao De Credito right after Timor Leste gained independence in 2000. He said, “in 1996 there were 6 credit unions; they stopped functioning in 1999 around the time of the referendum. Timor did not have a bank, people were not getting the capital they needed and were depending on subsidy. 25 members in the area got together and started with savings on $5 per month (the US$ is the accepted currency). Today we have 1,080 members and provide loans for business, housing, construction, automotive etc. Some of the houses you see here were out of the loans the union provided.”

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Elizario is a multi-faceted, multi-involved personality. His calling card on the front has his affiliation as President of the Confederacao Nacional Das Cooperaivas De Timor Leste and in the back to Fretilin, the political arm of Falintil, the guerrilla army that opposed Indonesia from its mountain bases throughout the 24-year occupation. He has served a Member of Parliament and authored two books, Dezenvolve Ekonomia Komunitaria Liu Husi Cooperative Credito and Solusaun Baki’ak. He is an avid organic coffee farmer while seriously pursuing a doctoral degree. When I ask him what he is most passionate about. Cooperatives! He replies without a pause and adds, “We are a country still recovering. People need to believe in themselves. Cooperatives offer the hope and the opportunity.”

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Timor Leste, the world’s newest democracy, is the sign that greets the visitor. The Presidente Nicolau Lobato International Airport is reminiscent of days when one could walk in and out of airports without the hassle of security. In fact, the President’s Palace situated on the one long, main road in Dili has no signs of security only children playing in the green lawns lined with trees. The one thing which catches the eye are the throngs on young boys and girls either walking on the roads at all hours or sitting gazing at passersby. Timor Leste’s history of political instability now has a bearing on its economic and social development. In the 16th century it was colonized by Portugal and when it declared independence in 1975, it was put down in a brutal manner by Indonesia. What followed was twenty years of struggle and finally resolved through a referendum in 1999 where an overwhelming majority voted for independence. Timor Leste was officially recognized as a nation in 2002. This was not the end of its struggles. Continued political instability and civil unrest led to more riots in 2006 and following parliamentary elections in 2007. In February 2008, a rebel group staged an unsuccessful attack against the president President Ramos-Horta and Prime Minister Xanana Gusmão (who is the current President). Since then, the government has enjoyed one of its longest periods of post-independence stability, including successful 2012 elections for both the parliament and president.

The conflict spanning three decades has resulted in the destruction of institutions off all kinds, loss of assets and displacement of the population. Cooperatives were not immune and many had to cease operations. Cooperatives in Timor Leste can be divided into financial and non-financial (agriculture, fishery, production..). There are now 87 credit unions, 17 agriculture cooperatives, 17 multi-purpose cooperatives and 5 fisheries cooperatives. The growth in cooperatives is largely a result of a grant programs that provides start-up funding and grants for training and support and equipment. While there is need for support, the emphasis needs to be on building human resources and capacity to sustain institutions. For example, on the financial side, credit unions work along side NGO’s with savings and loans products but the majority are credit driven. They contribute to dependency and are not sustainable in the long term when organizations pull out (which is now happening). Credit unions that incorporate the cooperative model (democratically controlled and member owned) and use savings mobilization have better chances of being sustainable. However, there is need to build human resources, instill strong governance, strengthen administrative skills and enhance technical skills. Members need to feel recognized and assisted to maximize the benefits of their individual unions.  The role of the Confederacao has to be strengthened for it to provide the supervision, technical assistance and training required by the cooperative’s boards and staff.

In Timor-Leste, cooperatives are now considered important enough that the constitution in Article 138 guarantees the development of cooperatives. The Timor Leste Strategic Development Plan 2011-2030 calls for developing a policy framework to establish cooperatives with vulnerable people to create employment, income and training opportunities. Forming cooperatives is another way to encourage private sector growth in rural areas. The view that cooperatives are part of the private sector is in line with the UN Sustainable Development Goals (SDGs) outcome (http://s.coop/1wv48) which acknowledges diversity of the private sector, ranging from micro-enterprises to cooperatives to multinationals and calls on all businesses to apply their creativity and innovation to solving sustainable development challenges.  

Eng. Estanislau A. da Silva, Minister for Agriculture, who is also Coordination Minister for Agriculture and Industry, met us early morning in his office. He said, “Our agriculture is subsistence oriented and 70% of our population depends on it. There is no starving, but we live on the edge.” He said, “We believe we can use cooperatives as one of the base to develop the socio-economic foundation of the country. In the economic sphere, the government is pursuing strategies to increase development and decrease reliance on donor funding. In this regard, there is need to develop agri-business. There is need to look at how the rural credit base can be improved. Cooperatives can play a role here also.”

Mr. Constancio Pinto, Minister, Ministry of Commerce, Industry and Environment had just returned from a trip to New York where Timor Leste was a signatory to the UN SDGs. He reiterated his government’s commitment to develop cooperatives to develop the rural economy. He added, “I am looking for cooperatives in Timor Leste to develop relationships at an international level to gain from expertise elsewhere.”  Mr. Filipus Nino Pereira, Vice Minister, Ministry of Commerce, Industry and Environment earlier spoke to us about the need to involve youth in agriculture; more in processing and value addition. He said, “In Timor Leste we import everything. We should increase production and connect directly with the consumer. There is misconception that the middleman is not needed. Cooperatives can play this role as it does in other countries. He narrated his experience from a visit to coffee cooperatives in Hawaii.”

Mr.Abel da Costa Freitas Ximenes, Vice-Minister of Education, an ardent supporter of co-operatives was optimistic about the future of cooperatives and reiterated the government’s commitment. The Ministry was in the process of developing a national curriculum that would not only teach about cooperative values and principles but also reinforce aspects of enterprises, jobs, self-reliance and self-development. He was keen to start with two or three models that would lay the foundation for cooperatives. He said the ministry staff was in the process of starting a savings and credit cooperative for them to learn about cooperatives.

We made a pilgrimage to the site where Father Albrecht Karim Arbie, SJ was buried. Known as the founder of Credit Union in Indonesia he had moved to East Timor to promote credit unions. On September 11, 1999, Father Arbie, 70, fell victim to the bullets of militiamen at the Jesuit-run refugee center. It was late night on Sept. 11, when Father Albrecht heard a man entering the compound where refugees were sheltered. He came out with a flashlight, but a man asked him to switch it off. He was then shot three times and died on the spot. Next to Father Arbie’s grave is that of Father Tarcisius Dewanto, 34, who was also killed as he tried to prevent armed militiamen from attacking the people in the church. For Robby Tulus (previously served as the ICA Asia Pacific Regional Director) it was a very emotional visit. He had last seen Father Arbie before he left for Timor Leste and had not had the opportunity to visit and pay his last respects.

In addition to meeting cooperative members and leaders, I also had the opportunity to attend the training session for cadre from the credit unions and government department. Close to 40 women and men took part in the four-day training. The training was conducted by the quartet of Frans Supriyanto, Haryono Daud, Theodore Trisna and Surato with support from Robby Tulus. It was good to see the enthusiasm and involvement of the cadre in the participatory training sessions. One of the need is to develop women and men who can instill and promote the cooperative values and principles. The centrality of members their needs and involvement is paramount and this was repeatedly emphasized to the cadre who are first point of contact to members.

Timor Leste as a new country is on the right track by giving emphasis to cooperatives. In order for cooperatives to take solid roots it is good to reiterate the six determining factors mentioned in the Report prepared by the National Directorate for Cooperative:  First: The members need to have commitment and ownership of in a cooperative organization; Second: Human resources and capacity have to be enhanced; Third: Self reliance needs to be nurtured Fourth: Cooperative policy and law have to be defined in an efficient and effective manner; Fifth: Institutional capacity needs to be strengthened

in all areas by designing various training to address them; and Sixth: the issue of financial literacy

and access to finance have to be resolved.

References:

Dncoop/ direccao nacional das cooperativas; Vol 2, March 2008

National Directorate of Cooperatives Version 3.1 Project Plan 2008-2011

Presentation by Elizario Ferreira at the ASEAN++ Regional Consultation in Jakarta

Speech by His Excellency the Prime Minister of the Democratic Republic on the occasion of the CPLP business confederation and the statutory board Timor-Leste, Dr. Rui Maria de Araú Timor-Leste

Timor Leste: Building Institutional Capacity. Credit Union Foundation Australia

Timor Leste: Strategic Development Plan, 2011-2030

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Against All Odds – Women run cooperative businesses in Palestine

There was muted excitement in the group as we set out to visit women cooperatives in the West Bank of Palestine. The previous day at the Workshop on Enhancing Role of Women in Co-operative business organized by the International Cooperative Alliance Asia and Pacific, WeEffect and the Economic and Social Development Center of Palestine, we were given statistics on women that were not wholly optimistic. While women comprised 49.2% of total population in Palestine their number in the labor force was just 19.4%. The unemployment among women was women 38.9% and that among women with 13 years of education or more was 48.7%. Further the socio-economic impact study of cooperatives in the West Bank also did not give much to go with, “Still much more is to be done, since women share in cooperatives general assemblies is merely15%, much less in the administrative committees, and only 16% of cooperatives are women cooperatives. Despite the fact that almost 60% of the productive and reproductive activities are carried out by women, especially in rural areas.”

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The actual visit to women run cooperatives proved the numbers otherwise. Morhaffa from Bezaria Cooperative, Hetam Suleiman from Beita Cooperative and Fatima Awatlah from the Al Noemeh Cooperative showed the difference cooperatives were making in providing not only income and employment opportunities but also addressing social needs and providing leadership. The Supermarket run by Bezaria Cooperative earned a profit of $133,030 last year, provided regular employment to 22 women and benefited 427 families. The origin of the cooperative was in its central location to three cities, Nablus, Jenin and Tulkram. While they started as an unorganized group in 2005, through support from the government and ESDC, they organized their business, merged shops and grew their business. The cooperative now has 110 members, paid-up capital of $62,900 and equity of $192,000. It has been paying regular dividend to members and patronage benefits to the users.

According to Morhaffa, “the cooperative provides women their own space outside of their homes. This is much needed given the situation in which we are. We hope to our own building in the near future to expand not only our business but also the psychosocial services, care for people with disabilities and rent the space for community activities.” Women from the neighboring towns visit Bezaria to learn and start their own cooperatives. A reflection of cooperation among cooperatives!

The entrepreneurial spirit of the women of Beita cooperative was evident as we entered their office. The members were busy packing olive oil soaps and proudly putting stickers with their brand name Palastinia.

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The cooperative when it started in 2007 was focused on agriculture and food processing, ventured into poultry and a consumer shop before finally settling on soap making. According to Hetam Suleiman, “making soap was a less risky proposition. It is a traditional product, the soap making process is familiar and it gives more work opportunity for women.” The other women in the group added, “the soap making in the initial days was in a traditional way – big size soap, without added ingredients and no packaging. We realized that in order to grow we needed to be more skilled, experiment with ingredients, focus on quality and make the packaging attractive. Brand Palastina was thus born.” The cooperative in addition to direct selling also makes soaps for private sellers. They realize that selling directly in foreign markets will give them more profits and have started this in earnest – investing in new equipment, adding to the workforce, investing in attractive packaging and reaching out to newer markets.

2015-09-16 10.12.07The first thing one notices as one enters the Al Noemeh Cooperative for Rural Development are the rows of computers lined against the wall. The cooperative provides training to women to become computer literate. This cooperative which started in 2000 also had a learning curving, investing in many activities before settling in on the cooperative shop. A unique service the cooperative provides its members is the opportunity to pay and load their electricity cards. The cooperative negotiate with the department to set up a card reader in their shop. Community members can come to the cooperative shop and reload their card rather than go to the city. 416 families benefit from this service and the cooperative estimates it has saved $31,405 in terms of money and 3,744 hours in terms of time! According to the Fatima, the chair, “we are the only cooperative that provides this service to its members and community. While the member waits for their card to reload they also purchase goods from the store. Our business has increased!”
According to UN Women, “women experience particular disadvantage in the occupied territories, where already-protective traditional attitudes are intensified by other daily restrictions. Male education is commonly prioritized, much of the limited paid work goes to men, and women are largely expected to live in the private sphere, focused on unpaid domestic tasks. Although the female literacy rate has improved in recent years, Palestine still lags on the global scale, with the numbers of illiterate women four times higher than those of men.” In their report, Building Ties: Towards Integrated Strategic & Policies for Empowering Palestinian Women, they recommend strengthening cooperatives and women run collective ventures. Collective economic ventures, cooperatives and credit cooperatives are important ways to enable women to overcome the trap of the informal sector and small business competition. These cooperatives can provide male and female participants with the capabilities to improve their skills through combining experiences and providing training and markets for marketing activities. In addition, young producers and manufacturers can exert pressure on decision-makers through joint efforts. These recommendations also resonate with those in the ICA-ILO report, Advancing gender equality:  The co-operative way. The recommendations include developing and implementing gender equality strategies, tools and resources more broadly to facilitate the equal participation of women throughout the co-oper­ative movement; providing women in emerging and marginalized co-operatives with financial and technical support through co-operation among co-operatives; working with government and other partners to overcome cultural and structural barriers for women; gathering and sharing more information about best practices and lessons learned; and tracking equality indicators such as women’s participation in governance, man­agement, membership, asset ownership and income parity on an on-going basis to ensure accountability.

 

The workshop focused on Enhancing Role of Women in Co-operative business was to bring the spotlight on women run cooperatives in Palestine. It brought together the Ministry, International Development agencies and cooperatives from Palestine and outside together to discuss the issues and share experiences.

The first line, muted excitement was not totally correct! For the group consisting of cooperators from India, Kenya, Philippines and the U.S., this was the first visit to Palestine. The rich history of the region (places only seen printed in history books), the conflicted politics and its lingering impasse, and the anguished lament of the people was all very moving. The excitement was palpable and interaction with the women cooperatives did not disappoint!

References:

Building Ties: Towards Integrated Strategic & Policies for Empowering Palestinian Women. http://palestine.unwomen.org/en/digital-library/publications/2014/6/building-ties#sthash.H7FhiQN7.dpuf

Advancing gender equality: The co-operative way

http://www.ilo.org/empent/units/cooperatives/WCMS_379095/lang–en/index.htm

The Socio-economic impact of co-operatives in the West Bank

http://www.esdc-pal.org/index.php/publications-menu/publications-b

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