Co-operatives have over one billion members worldwide by International Year of Cooperatives & agencies 4:48am 28th Oct, 2011   Oct 2011    Hailed as economically viable and socially responsible, cooperatives have over one billion members worldwide and can be found in sectors ranging from agriculture to finance to health.    Yet for an economic model deemed so vastly beneficial, cooperatives have received surprisingly little attention from both the media and governments, experts agree. By dubbing 2012 the International Year of Cooperatives (IYC), launched at the United Nations is attempting to reverse this trend and instead shine a global spotlight on cooperatives.    The U.N., along with its Department for Economic and Social Affairs (UNDESA) and the Committee for the Promotion and Advancement of Cooperatives (COPAC), has three main goals for the year.    It aims to increase awareness about cooperatives and their contributions; to promote the formation and growth of cooperatives; and to encourage member states to develop policies conducive to cooperatives'' growth.    With an ongoing global economic crisis and various "Occupy" movements demanding large-scale system overhaul, right now is a particularly topical time to celebrate cooperatives as equitable economic models that enhance socioeconomic development.    Cooperatives, no matter the sector, are widely viewed as successful enterprises for a number of interrelated reasons. One is that they are member driven, meaning that the very members cooperatives serve are the ones making the decisions about the institution.    Furthermore, because they are member driven, cooperatives are not profit-maximising enterprises. Rather, the pursuit of profit is balanced out by the needs and decisions of members, who can become fully involved in the governance of the cooperative.    Cooperatives "can make longer-term investments and better reflect the multiple bottom lines that users, owners, employees and neighbours will recognise as important," Michael Gertler, acting director of the Centre for the Study of Cooperatives at the University of Saskatchewan in Canada, told IPS.    As a result of these characteristics, cooperatives are regarded as having impressive longevity. The survival rate of start-up cooperatives is also higher than those of private sector competitors.    Cooperatives and sustainable development    The potential of cooperatives to help eradicate poverty as well as create and reinforce sustainable practices while contributing to development is precisely what the U.N. wants to highlight and encourage states to tap into.    A primary struggle of the U.N.''s development agenda has been to highlight the human aspect of development and wealth, rather than the financial elements. Cooperatives combine both, making them a highly desirable economic and business model.    Cooperatives "empower individuals to organise themselves into self- help enterprises", said Under-Secretary-General for Economic and Social Affairs Sha Zakang. They also "promote cooperation at a grassroots level", he said during a breakfast meeting with members of European cooperative banks.    Sha noted later on during a round table discussion that because developing a sustainable economy will require "radical shifts" in the way humans produce and consume energy, cooperatives play a valuable role in the transition to a green economy by creating economically and socially sound practices.    "How can cooperatives be best utilised to advance a people-centred approach to sustainable development?" he asked rhetorically. He underscored the importance of cooperatives to the U.N.''s development agenda and its Millennium Development Goals (MDGs) by 2015.    Gertler affirmed this point, noting that cooperatives "have the potential to be excellent vehicles for making the transition to sustainable production and consumption".    Daniela Bas, director of DESA''s Social Policy and Development Department, similarly noted that by being a "value-driven, people- centred model of enterprise", cooperatives can positively affect particularly vulnerable populations such as indigenous peoples and rural communities.    Yet despite the high value placed on cooperatives for both the model and the potential they offer, cooperatives have largely fallen under the global radar.    Immensely beneficial, yet overlooked    One area where cooperatives have outshined the more mainstream private businesses is in the financial sector. A 2009 report by the International Labour Organisation (ILO) sang the praises of cooperative banks, finding that while the economic crisis hurt the majority of enterprises, "cooperative enterprises around the world are showing resilience to the crisis". Not only does the cooperative model of enterprise "survive crisis", the report elaborated, but it is also "able to withstand crisis" while "maintaining the livelihoods of the communities in which they operate".    "The recent massive public bail-out of private, investor-owned banks has underlined the virtues of a customer-owned cooperative banking system that is more risk-averse and less driven by the need to make profits for investors and bonuses for managers."    Ultimately, the report argued, "it is the strength built up by cooperatives during the good times that helps tide them over a recession."    Any resilient organisation that can weather a recession would seem invaluable in the current economic climate. Yet cooperatives are not given the proper attention that would allow them to flourish, argued Jack Wilkinson, farmer and president of the World Farmers'' Organisation, at a round table this morning. He called for the cooperative sector to be given the support to become more mainstream, so that they do not remain on the fringe.    Piet Moerland, chair of Rabobank and president of the European Association of Cooperative Banks, and Pauline Green, president of the International Co-operative Alliance, echoed this sentiment at a press briefing.    Both emphasised how little known cooperatives are – neither the number of people involved in them nor the market value they contain.    "The cooperative business model is, in my view, underestimated in the media," Moerland said. He added that it is similarly underestimated by legislators and in regulatory frameworks.    "Co-ops do not compete in the same way as conventional corporations," said Gertler. "Governments need to understand their proven role in providing financial and economic stability, especially for more vulnerable populations and places," he concluded.    The UN recognises the part co-operatives play in the lives of more than 800 million people worldwide, writes Paul Flowers, chairman of the Co-operative Bank.    There are an estimated 800 million members of co-operatives worldwide and co-operative enterprises employ around 100 million people. According to UN figures, 50% of the world''s living standards are affected by co-operatives.    The top 300 co-operative businesses alone generate combined turnover of $1.1 trillion, enough to make it into the top 15 economies in the world.    Globally co-operation has significant presence in agriculture, financial services, housing and utilities. And there are all sorts of other sectors and activities varying from famous football clubs – most notably Barcelona – to even snake catchers in India, who clearly embrace the ethos and concept.    But what sets the model apart from others is that co-operatives – whether small farmers or large consumer-owned entities – share the common values of democracy, solidarity, equality and self help, creating businesses that serve and deliver for the greater good, as opposed to businesses predicated on maximising profit for a chosen few.    Against a backdrop of a financial crisis exacerbated by corporate greed and speculation, the model has proven to be one of the most enduring and resilient ways of running a business for the last 150 years.    Both in developed and developing countries, co-operatives act as a catalyst for a way of working that is more sustainable. From providing infrastructure for farmers in Kenya to helping the Co-operative Bank in the UK to weather the financial crisis better than many competitors, the benefits are evident.    It is an astonishing coincidence that the international year is being launched on the same day that the earth''s population hits 7 billion. The rising population brings many challenges especially for some of the poorest nations. Inequality between countries in access to food, water, housing and work will only increase.    Co-operatives play a vital role in helping nations tackle these issues by alleviating poverty, improving the quality of life, leading to improved sanitation and education. Visit the related web page
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