The International Summit brought together close to 2,800 delegates from 91 countries to celebrate the power of cooperatives. Photo Courtesy of Desjardins

By Beatrice Paez
QUEBEC CITY, Canada, Oct 12 2012 (IPS)

The migratory seeds of cooperatives were sown and first thrived in Europe, but have since adapted to the climate of nations worldwide.

Faces from as far as Kenya and the Philippines and as close as the Canadian Arctic and Cuba flocked to Quebec for the opportunity to claim ownership of today’s fledging and diverse movement.

At the International Summit of Cooperatives, held in celebration of the U.N. International Year of Cooperatives, cooperators swapped stories, best practices and cards with the future in mind.

The hope is that this international year will turn into an international decade honouring cooperatives, Dame Pauline Green, the president of the International Cooperative Alliance (ICA), told IPS.

Summit participants gathered to publicise the efforts of the movement and to gain insight into the business challenges for cooperatives ahead.

“The summit was a great opportunity to exchange ideas and innovative practices,” said Monique Leroux, the CEO of Desjardins and the co-host, in a statement.

Going forward, a declaration was adopted by the co-hosts of the conference, Desjardins, ICA and St. Mary’s University to make a stronger case for cooperatives to the public and authorities of governance.

As for their goals in improving the cooperative enterprise, they pledged to harness new tools for communicating their goals to the public and to develop new ways of enhancing communication and consultation with members and management.

For Quebec, the summit was also a chance to pay tribute to Alphonse Desjardins, who initiated the first step to making credit unions an option for French Canadians who would otherwise have been forced to leave the province in pursuit of income opportunities.

The stories that emerged from the global gathering underscored the role that cooperatives have played in making it possible for people to remain rooted in their communities, keeping much needed talent from fleeing.

Mary Nirlungayuk, the corporate services vice president of the Arctic Cooperatives Limited, shared with IPS the story of how cooperatives in the north have created a channel of income for artist collectives and have popped up where others have not always tread – providing cable and construction services to partnering with airline and shipping companies to reduce the cost of transporting the annual inventory of goods.

The grassroots orientation of cooperatives made it viable model of enterprise for First Nations communities, striving to reconcile past traditions with present realities.

“They were created because it was very similar to the Aboriginal, First Nations concept that they would help each other,” Nirlungayuk told IPS. “And if it can work in these remote communities, why can’t it be more successful in other places.”

In Cuba, where the groundwork for a cooperative future is being laid, its delegation of 10 was there to learn from others as well as to demonstrate the weight of the movement within the country.

“We wanted to let the rest of the world see what is going on,” said Wendy Holm, who heads the delegation. “Socialist and capitalist co-ops are slightly different in form… One of the challenges is going to be to give them as much autonomy, while at the same time recognising that you’re (for instance) a farm co-op tasked to produce food for the wider population.”

The versatile construct of cooperatives has made it a blueprint for enterprises in the agriculture, insurance, housing, and retail sectors and among others. In the socialist economy of Cuba, Holm said cooperatives make the most sense in the shift to convert trouble-ridden enterprises away from state management.

The Cuban delegation was “interested in looking at as many cooperative endeavours as they can,” and had even met with a taxi co-op to learn how it could be adapted in Havana, Holm told IPS.

Though smaller than the Cuban delegation, the Philippines, with its modest contingent of four, also sought to make an imprint at the summit.

Youth delegate and speaker, Marie Antoinette Roxas, from the Philippines, was there to share her university, Iligan Institute of Technology’s cooperative initiatives. She told IPS that other youth head programmes that introduce financial literacy to children in elementary schools, as an effort to instill smart financial practices at a young age.

The student-run cooperative is also involved in designing income-generating activities; one project that has taken off has been its partnership with local tailors to make eco-friendly bags that are then sold with interest to its mother co-op, the university’s Multi-Purpose Cooperative.

While there were many opportunities to hear about different initiatives, Simel Esim, the chief of the ILO’s cooperative branch told IPS she wished there had been more opportunity to connect with the people behind them – and had hoped for more dialogue between delegates.

Amidst the challenges of staying relevant and competitive, the biggest one ahead, said Esim, is going to be connecting with and preaching to people beyond the converted.

At the summit closing, Leroux announced Desjardins’ hopes of setting up another international gathering. Perhaps that will be on the agenda at the next summit in 2014.

The Maguey Women's cooperative was the first in Mexico to use solar energy in food production. Credit: Emilio Godoy/IPS

By Beatrice Paez
QUEBEC CITY, Canada, Oct 10 2012 (IPS)

Cooperatives may face an immense challenge in garnering broader public recognition among consumers, but when it comes to chasing growth, they haven’t held back.

They are growing a rate comparable to their corporate competitors, and are outpacing them in the food and agricultural sector, a study released by McKinsey & Company reveals.

Cooperatives are developing at annual rate of 7.9 percent versus free market participants, who lead at 8.7 percent. While food and agricultural co-ops lead as an example, the study revealed that the insurance sector confronts obstacles in gaining access to capital and the right type of legislative environment that responds directly to the model.

The survey of 47 co-ops based in Asia, Europe, North America and the emerging markets upheld the cooperative movement’s self-perceptions about its ability to prioritise the interests of members over short-term financial gains. The results were matched with their analysis of 54 publicly listed companies.

Growth for small companies turned big can mean a break in their resolve to live up to their original standards. But cooperatives occupy a different territory of business, where the window for the measurement of growth is wider than the quarterly report structure that corporations are beholden to, said Juan Buchenau a senior financial sector specialist at the World Bank, at a panel during the Oct. 8-11 International Summit of Cooperatives here.

In the pursuit of a greater share of the market, cooperatives remain rooted in addressing their members’ needs, said Andrew Grant, the managing partner of McKinsey & Co. “If you’re better serving your members, you’re by definition meeting your market share.”

For 96 percent of the co-ops under review, growth was seen as essential to maintaining a diversified range of services. The findings illustrated differences in sources of growth, with co-ops propelled more by acquiring a greater market share, rather than by their entrance into rapidly rising markets with high growth potential.

“They are less nimble at placing their resources into the fastest growing part of their marketplace,” noted Grant at a press briefing. “They are less good at developing new products and services.”

Cooperatives are not unwilling to jump into the new markets, but rather are unable to swiftly release the capital to place their bidding, the McKinsey report stated. The principle of consensus that governs the cooperative model and puts the immediate interests of members first makes it difficult to cross the threshold.

The challenge and concern for cooperatives going forward is how to grow, without succumbing to the same type of responses exercised by other enterprises. For corporations, the pressure of a quarterly timetable means that “projects are thrown off the table” before they have been given a chance to fly, said Buchenau.

There needs to be more long-term patient capital within the free market, said Martin Sabia, the president and CEO of the Caisse in Quebec, at the panel on the economic order.

In identifying the weakness of cooperatives in penetrating emergent markets, the report stressed that cooperatives must play on their “natural strengths,” and build a following through the promotion of members’ needs.

But while this study demonstrates the economic power of cooperatives, Simel Esim, the chief of the International Labour Organisation’s Cooperative Branch, told IPS that it does not provide an accurate picture of how growth is understood within the movement.

“The McKinsey report is looking at traditional growth indicators, it’s not really addressing the co-op model in its uniqueness,” she told IPS. “For instance, co-ops have a longer life span, they employ workers, they have less worker turnover, move less from a local economy, they respond to local problems faster – these are the growth indicators that should be used.”

Instead of looking at the annual growth, she suggested assessing growth within a span of 10 to 20 years.

“We’re more interested in qualitative growth, rather than just numbers,” agreed Gianluca Salvatori, the CEO of Euricse, a research centre focused on cooperatives.

For Salvatori, growth in the qualitative sense means innovation, extending the cooperative experience in new sectors to respond to emerging needs, not merely responding to market indicators.

“The world they are trying to analyse and understand is far more complex,” Salvatori told IPS. “I don’t think growth in size is the main driver we have to implement as a strategy.”

By Beatrice Paez
QUEBEC CITY, Canada, Oct 9 2012 (IPS)

The international rally to take the global cooperative movement to the next level is in full swing at the International Summit of Cooperatives here, which kicked off on Monday.

Dame Pauline Green. Credit: Beatrice Paez

Under the banner “The Amazing Power of Cooperatives”, the summit seeks to demonstrate its contributions in proffering alternative, human-centred solutions for economic development across the world.

The summit marks the first occasion to bring nearly 2,800 cooperative participants from 91 countries into dialogue with one another.

To make their case, the summit’s organisers, Desjardins, Canada’s financial cooperative, and the International Cooperative Alliance (ICA) are letting the numbers do the talking, speaking to the fact that cooperatives sprout where there is a vacuum in services and opportunities in the community.

“With one million organisations, 100 million employees and one billion members we already have a global voice, now we need to make it resonate across the world,” said Monique Leroux, the CEO of Desjardins.

Addressing the crowd gathered at the opening ceremony, Dame Pauline Green, the president of ICA, fondly recalled one of her worldwide tours of cooperatives.

“There were desks squeezed into every corner of the room and the place was buzzing with members waiting to deposit or withdraw money,” says Green about her trip to a credit union on the outskirts of Manila. “Coffee and biscuits were being shared, and they showed me with such pride a seven-story building that they had built with credit union money.”

The building was purposed as a school for 650 local students, funds were also used to create a preschool, where mothers can drop off their children to supplement their family’s income, and a chapel, where members can seek a measure of comfort in times of distress.

This is a portrait of the movement at work, said Green.

But Green noted that while there are many success stories of cooperatives filling in areas neglected by other parts of the economy, cooperatives continue to be sidelined and discriminated in their efforts to reconfigure the direction of global economic policy.

She pointed to the fact that neither the World Bank nor the B20, which advises the G20 group of the world’s biggest economies, has a cooperative economist on their boards.

In his opening remarks, Riccardo Petrella, an Italian economist and political scientist, also discussed of the unwillingness of governments to strive for global economic policies that balance the needs of people with profit.

He went on to speak of the gross inequality that punctuates society and the misplaced values that put accumulation ahead of the equitable distribution of wealth.

Green has been bringing the case of cooperatives to various international and governmental bodies and stakeholders around the world, from Beijing to Washington.

“Our argument has been that cooperative businesses want to see a more diversified global economy,” said Green. “The world needs a global economy that puts people at the heart of decision-making and not just the red-blooded pursuit of economic development at any cost.”

With over eight years of experience on the ICA board, Green has made it her ambition to make the cooperative model the blueprint to guide global institutions in their policy decision-making.

IPS spoke with Green to discuss the challenges the cooperatives face in today’s economic climate.

Q: Cooperatives are active in all corners of the globe, but in what regions does the movement need to gain a firm grounding?

A: There’s a huge raft of energy that needs to go into countries involved in the Arab Spring. What we want to do is to engage through social media. We want to attract them at the grassroots level, on things like cooperative housing, things like professional cooperatives. Those people, when they came out on the streets in the Arab Spring, weren’t just looking for political freedom, they were looking for economic fairness.

By 2050, we won’t have enough productive land in the world to feed the estimated nine billion population. (Of) the remaining land that is available to increase production, 73 percent or 80 percent of it is in Africa. The issue becomes how do we energise African small holders, how do we make it in a way that the benefits are given back to peasant farmers.

Our fear is that nothing will happen and we’ll just see the multinationals buying up the small holders and they’ll get a tiny shot in the arm, which will last for a short while.

Q: What are the key priorities of the ICA?

A: The key thing for us is that the global economy does not recognise our sort of business. Our serious initiative for this year is try to impact the global economy. A billion people around the world are not starry-eyed idealists, they’re realists.

We believe we can open some of the doors for our businesses big and small, and demonstrate their worth to governments.

Q: Not all enterprises are immune to corruption. Do cooperatives have a unique approach to dealing with or mitigating corruption?

A: The strength of the cooperative movement is its accountability to its members. Its ordinary members are on the board of cooperatives, driving the direction and holding management accountable. More than often, these things are discovered through the process of an ordinary person who will ask the awkward questions. You have a totally diverse set of people with different skills.

Excerpt:

Emmanuel Kargbo, a 26-year-old farmer, pushes a motorised soil tiller recently given to his farming cooperative. Before he was trained to use it, it would take him more than twice as long to do it by hand. Credit: Damon Van der Linde/IPS

By Beatrice Paez
TORONTO, Canada, Oct 8 2012 (IPS)

Youth worldwide are facing limited job prospects in the traditional channels of employment, and in the midst of the job crunch, cooperatives are seeking ways to connect with this untapped pool of talent.

It begins with reserving a seat for young, future cooperative leaders this Oct. 8 to 12 at the International Summit of Cooperatives in Quebec City. About 150 youth from across the globe have been invited to represent their respective cooperative organisations.

It’s an opportunity for them to network with their peers and learn from their cooperative elders, said Stephanie Guico, the coordinator of the Future Leaders programe at the conference. While there will be special panels and events designed around them, the young leaders, from the ages 20-35, will be expected to bring their own contributions.

“I hope they’re going to bring a youth voice, innovative ideas, new perspectives. I hope they won’t censor themselves,” Guico told IPS. “There’s a lot to be gained from listening to youth who are more in touch with integration into the virtual area and ways of collaborating and communicating that are new.”

“I think there’s a generation now that has grown up with a certain type of cooperation through social media,” said Charles Gould, executive director of the International Cooperative Association, a non-governmental organisation that strives to shape global policy on behalf of cooperatives.

“It ought to make them more receptive to the cooperative model but they haven’t heard about it as a business model,” he told IPS.

No one knows more about creating connections through social media to answer a need than social entrepreneur Dev Aujla, who will be addressing the young leaders.

Aujla, founder of DreamNow, a charitable organisation in the business of turning ideas into social goods, collaborated with Rolling Stone Magazine’s “climate hero” Billy Parrish, a climate change activist, to write a book.

Parrish and Aujla’s paths crossed online, as Facebook friends who had never met but who shared similar principles, and dedicated their lives to mobilising youth to address their community’s issues. Their book “Making Good” serves as a game plan for youth interested in pursuing careers as social entrepreneurs.

The non-linear career path often comes with the territory if you become a social entrepreneur, and while it can be daunting, it is becoming an attractive option for those wanting a job that pays well enough and is rooted in serving the community, said Aujla.

And for those interested, the cooperative model can provide a base of support, because it doesn’t require a lot of a capital, and he said, with cooperatives “you can take any industry you can imagine and reinvent in a way that does good.”

The cooperative model speaks in the language that today’s generation has been reared on, through exposure to the dialogue on climate change and other environmental issues, “this whole generation knows they want to do something good and are just being turned on the idea,” adds Aujla.

But while youth have more access to information to educate themselves on the issues of today, the cooperative model isn’t all that familiar because it’s not always included in academic curriculum, said Guico, who completed a Bachelor’s Degree in International Development.

Social media can aid the cooperative movement in its efforts to connect with youth, but more education about how they can offer an alternative route for employment is needed.

“Realistically, it’s going to take a different presentation of the model and a better explanation of it,” said Gould.

It took doing her own research and meeting the right people for Guico to find her way into the cooperative movement. The same goes for others around her. “Most people stumbled upon the movement, which said something about how good the cooperative movement is doing at promoting itself and communicating its identity.”

Part of the issue Guico finds is that cooperatives operate in a more discreet manner than corporations. “We would have to impose ourselves before there’s a perception of our importance,” she said.

Another reason cooperatives are not on the minds of many youth is that schools do not delve deeply, if at all into what the model offers, Guico notes. “Most educational institutions are geared towards the capitalist model, anything that it is too complex, they tend to simplify or minimise it.”

Without the decision to explore cooperatives on her own, Guico might have continued to presume that cooperatives are only in the trade of making crafts and operating as small-scale agricultural enterprises, as she was led to believe.

In Canada, St. Mary’s University in Halifax offers a Master’s programme designed around the cooperative enterprise. The university is sponsoring Imagine 2012, a joint event of the summit, on cooperative economics that precedes it.

But the online programme, which gathers people from around the world, is targeted at cooperators entrenched in the movement. Most students have been working in the industry for 15 to 20 years and are seeking to learn new management tools and connect with other industry leaders.

“If people were only learning about it in the ways that are more typical to how (we’re) learning, I think our sector would be much further ahead,” said Karen Miner, the managing director of the Cooperative and Credit Union Management programme at St. Mary’s.

“We would be much better educated about the sector and even on ourselves. We have a large number of managers of co-ops that come from the traditional business background, myself included,” Miner told IPS.

Laure Waridel, an ecosociologist who will also be speaking to youth at the summit, also finds that not enough value is given to the social economy in university courses, particularly in management.

Waridel, who taught a course at McGill University in Montreal, sought to incorporate some lessons on social entrepreneurship in her lectures by inviting guest speakers working in the social economy to her lectures.

The cooperative model, which prides itself in embracing democratic and participatory values, where youth can help influence and shape the future of cooperatives, has a lot of room for growth and new members, Waridel said.

“The message to future leaders is that we need to prepare a transition for another economy,” she told IPS. “It’s very clear that the dominant model in which we are now is unsustainable.”

Cooperative members at the APROHFI wholesale centre in Honduras select the best potatoes to sell to supermarkets. Credit: Thelma Mejía/IPS

By Beatrice Paez
TORONTO, Canada, Oct 5 2012 (IPS)

The banner year for the global cooperative movement is winding down into its last months, but its leaders have echoed a resounding message: cooperatives, a values-based business model, can usher a transition to a more socially responsible economy.

This message will be at core of the International Summit of Cooperatives, a gathering of more than 2,000 participants active in the cooperative movement, to take place in Québec City from Oct. 8 to 12.

With 2012 designated by the U.N. as the International Year of Cooperatives, Monique Leroux, the CEO of Desjardins, the largest cooperative financial group in Canada, thought it was time to bring her dream of launching a summit into action.

“We want to use the summit as an opportunity to make sure the world in general, and governments have a better understanding of the cooperative movement,” said Leroux. “We need to do a better job in promoting who we are.”

Desjardins partnered with the International Alliance of Cooperatives, a non-governmental organisation that advocates on behalf cooperatives, to create a venue where new networks and solutions to propel the movement forward can be forged.

The shift to a new paradigm for the economy is now underway, and the time is ripe for cooperatives to demonstrate their value because there is an upswell of disenchantment with the economy as it stands, said Charles Gould, the executive director of IAC.

Cooperatives tend to arise in response to an unaddressed need in the community. The core values that underpin the cooperative model – self-help, democracy, equality, equity and solidarity – guide the way decisions are reached, Gould added.

The values bear the implication that the interests of the communities served will be factored into any business calculation. In the face of the financial crisis, the cooperative model proved its resilience, because by design the board is accountable to all its members, said Leroux. The one-member, one vote rule means that the interests of the largest shareholders do not trump the rest.

“It’s a more sustainable model, it doesn’t take unknown risks because it’s not trying to maximise profit,” said Gould.

“We believe that by 2020, by the end of this decade, it’s conceivable that the cooperative can be the fastest growing form of enterprise in the world,” he told IPS. “We’ve been asking cooperatives and our members what would have to change for that to happen.”

Gould identified several areas that will help build momentum for the movement, and bolster its profile as a viable alternative to the classic setup of a corporation.

For one, cooperatives need new forms of capital to grow that are aligned with their values and design. The summit marks an opportunity for Desjardins and its partners to share their innovations in creating new financial products, credit services designed to reflect the context of the community served, said France Michaud, the communications supervisor at Developpement International Desjardins (DID).

Aside from raising capital, cooperatives also have to do a better job at promoting and invoking their identity, making the model and the values it stands for known to the public, Gould noted. Brands like Ocean Spray and Sunkist are household names but are not always tagged as examples of cooperatives.

There are several misleading perceptions about cooperatives that downplay their importance in the economy, said Stephanie Guico, the programme coordinator of the Future Leaders Program at the summit. One is the view that they belong to the past, another that they are mainly poor people’s organisations.

Poverty alleviation is central to the mandate of many cooperatives, but people often don’t realise they are businesses concerned about their sustainability, Guico added.

For the cooperative model to thrive, the legislative and regulatory landscape has to adjust itself. “There are many countries where the general business regime is designed around the corporate construct, because it has been such a dominant model,” Gould told IPS. “We have to make sure we’re not subject to restrictions that were imposed to prevent problems other business forms are subject to.”

Gould noted that the governments of China and Iran are expressing interest in the cooperative model, and that these countries are on his list to watch for growth. “Some of these countries recognise the need to diversify from state-owned enterprises and see how the global economy has changed,” he said. “But don’t want to move to capitalist models…and are intrigued that the cooperative model could be a way of getting people to step up in a self-help way.”

In Quebec, the groundwork for an alternative economy is being sown through a collection of seemingly small efforts led by members of the global cooperative movement, said Laure Waridel, an eco-sociologist, who has been invited to speak at the summit.

She cited one local organic farm as an example, because it has opted to subsist with the help of its customers, who are willing to pay an advance for its share of the harvest.

Waridel, also recognised as a pioneer who helped bring the fair trade movement to Canada, has been studying the efforts of people in the countryside of Québec to create a sustainable livelihood.

“What I’m interested in is to find the connecting dots between many initiatives in Québec that are seen as marginal,” she told IPS. “You put them together, you see that there is a proposal for another economy.”