Cooperatives are generally recognized as potentially effective means of generating employment and income. They are important actors in certain sectors of industrialized economies, such as agricultural marketing, consumer retailing and banking. At a time when state enterprises are being privatized and restructured and the role of the State in economic life is diminishing, cooperative enterprises, especially in agriculture and agro-industry, are well placed to provide sustainable employment for large numbers of people.
In the past, cooperatives in many developing countries and in most countries in transition, received official subsidies and benefited from other privileges such as monopolies. Today, cooperatives are independent enterprises that are adapting to an increasingly competitive market in search of survival and economic viability. At the same time, they must work at changing the perception of others that they are largely governmental institutions, and prove that they are independent, competitive, democratic and socially responsible enterprises. However, continued governmental intervention in the operations of cooperatives in many developing countries, where they could play an important role in combatting poverty, and in countries in transition, where they could produce goods and services that are no longer considered the responsibility of the State, are hindering the ability of cooperatives to realize this potential. Lack of human resources trained in cooperative principles and practice is also contributing to the slow pace of change.
The ILO Cooperative Branch is assisting governments and cooperatives realize their potential. The objective of the Cooperative Branch is the establishment and development of viable and self-reliant cooperatives and similar participatory economic self-help organizations of small producers, consumers, workers and the self-employed, and the development of supporting structures to assist them to manage their associations and economic undertakings efficiently, effectively and democratically. This objective will continue to be achieved through the provision of technical advisory services and support for technical cooperation activities, supplemented by the collection and dissemination of information. The activities of the programme will focus on the following six major themes: cooperative reform, cooperative training networking, poverty alleviation, cooperative support to indigenous and tribal peoples, cooperative trade and cooperative social services based on the principle of mutuality.
For cooperatives to become more self-reliant and make a more effective contribution to the process of democratization, cooperative legislation has to foster the participation of cooperative members, lay the basis for democratic self-management and control and strengthen the independence of cooperative movements. The major principles guiding democratic cooperative action at the national and international levels are set out in the Cooperatives (Developing Countries) Recommendation, 1966 (No. 127). Support will be provided to member States, particularly those in the process of structural adjustment or in transition from a state-controlled to a market-oriented economy, to assist in the formulation of coherent cooperative development policies and to update cooperative legislation. This constitutes a particular challenge in countries in transition, where prejudices against formerly state-controlled cooperative enterprises have to be overcome in order to develop genuine, democratic cooperatives. These activities will take into account the conclusions and recommendations of the International Meeting of Experts on Cooperative Law, held in May 1995, and will be supplemented by the programme's extensive database of cooperative laws and bylaws, which is constantly maintained and updated.
Assistance will continue to be provided for the establishment and expansion of networks of cooperative training institutions with a view to strengthening human resources development in cooperatives and their support organizations and sensitizing policy-makers. The resulting exchange of experience and knowledge assists these institutions to train cooperative trainers, managers and members more efficiently, not only in basic cooperative principles, but also in business management.
In many developing countries, agricultural producers do not reap the full benefits of their work since, as individual small-scale producers, they do not have access to consumer markets in industrialized countries. With a view to expanding the export opportunities of producers who are organized in marketing cooperatives, activities will continue to be undertaken for the promotion of commercial exchanges, business partnerships and the exchange of know-how between cooperative producer organizations, particularly in Africa, and cooperative consumer organizations, mainly in Europe.
In line with the recommendations of the World Summit for Social Development, activities will be intensified for the development of undertakings organized on a mutual basis to provide social services in such areas as social security, education, health and housing. Support will be provided for technical cooperation activities designed to increase the efficiency and coverage of existing mutual self-help organizations through training and networking arrangements.
The ILO Cooperative Branch with the ICA and the United Nations calls upon national governments to pursue higher levels of productive and freely chosen employment with the ultimate aim of full employment.
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Posted: 23 June 1997