Guatemalans Turn to Mutual Aid to Overcome Poverty

By Danilo Valladares Reprint | | Print | |En español

GUATEMALA CITY, Oct 8 2012 (IPS) - “Our economic situation improved a great deal because we obtained more income for our families” as a result of setting up a social enterprise, Matilde García, who makes fashion jewellery in the municipality of Pastores, 60 km west of the capital of Guatemala, told IPS.

“Now we send our children to school in the urban area and we can pay for their transport and food,” said this proud mother of three, who gave up working as a domestic employee with a monthly wage of about 40 dollars to set up a small-scale factory of necklaces, bracelets and fashion accessories employing 25 women.

Social entrepreneurship and cooperatives are offering rural families the opportunity to generate income in Guatemala, where 54 percent of the country’s 15 million people live in poverty and 13 percent in extreme poverty, especially in areas where most of the population is indigenous, according to the state National Survey of Living Conditions of 2011.

García’s group is one of 15 firms made up of 350 people, mostly women, who operate in eight of Guatemala’s 22 departments or provinces, making fashion jewellery for the social enterprise Kiej De Los Bosques, which in the Maya Cakchiquel language means “deer of the woods.”

“This is changing entire communities,” said Ligia Chinchilla, head of the Saquil group to which the Kiej De Los Bosques enterprise and the non-governmental Comunidades de la Tierra (Communities of the Earth) belong.

Kiej De Los Bosques is a private company that markets the products manufactured by the women under the Wakami label, while Comunidades de la Tierra develops their capacities and “incubates” them into formal businesses within two years.

“This country’s problems, such as poverty, are very complex, and it is everyone’s job to solve them. That’s why we created this with the goal of increasing incomes in rural areas,” said Chinchilla, one of the three founders of the social enterprise.

Chinchilla placed social entrepreneurship “a step ahead of social business responsibility.”

“Social responsibility is: ‘I do business and I see myself internally as being responsible,’ while the focus in social entrepreneurship is ‘I do business and I also take responsibility for those on the outside,’ ” she told IPS.

Wakami products, made by Guatemalan artisans, are currently exported to 17 countries, including Belgium, Canada, Denmark, Germany, Italy, Spain, Sweden and the United Kingdom.

Participation by these rural groups in productive activities has opened up development opportunities in terms of health, basic services and other benefits that have helped them to improve their quality of life.

Rony Mejía of Counterpart International, a non-profit international development organisation, told IPS they are working in partnership with Saquil on the incubation of five groups of artisans made up of women and young people in the northwestern province of Totonicapán.

But the support for these groups goes further. “Once they began to generate income, opportunities had to be sought for wise investment and, since the prime need is to improve health and nutrition, partnerships were sought with social businesses making water purification filters, solar energy and better ovens,” he said.

“At the end of the day, social businesses tend to combine to some extent the interests of government, NGOs and the private sector, with the difference that they do not depend 100 percent on aid, but on a business model” with social benefits, he said.

Social entrepreneurship is not the only window on development available to the country’s most vulnerable communities; another one is cooperatives, another kind of productive organisation that is on the rise.

This is due to the fact that cooperativism “offers property, participation and human development, especially in the rural areas, as a business with a social vision,” Rodolfo Orozco, executive director of the Guatemalan Confederation of Cooperative Associations, told IPS.

Twenty years ago there were only 160,000 cooperativists who produced mainly basic crops like maize and beans, while now there are 1.3 million, producing a long list of agricultural products as well as participating in other sectors like housing, finances and health, Orozco said.

According to his estimates, cooperatives account for at least 22 percent of the country’s GDP, showing “its importance for the national economy.”

Cooperatives have grown so much that they are now the major shareholder in the Rural Development Bank, the third largest in the country by asset holdings. “We own 80 percent of the shares. This is rural development with a social vision,” Orozco said.

The 2012 International Labour Organisation report “Visión panorámica del sector cooperativo en Guatemala” (Overview of the cooperative sector in Guatemala) leaves no room for doubt about the importance of cooperativism for social development.
“Ethics and a concern for people have guided cooperatives throughout their more than 110 years of existence, contributing to building more just societies that have a higher respect for human values and human rights,” the report says.

These historical precepts upheld by mutual aid organisations are the focus of the International Summit of Cooperatives being held Monday Oct. 8 to Friday Oct. 12 in Quebec, Canada.

As part of this year’s International Year of Cooperatives, the meeting poses the premise that this kind of collective action is capable of promoting a transition towards a more socially responsible economy.