By Balu Iyer
Traveling for 12 days to six countries (Thailand, Singapore, Indonesia, China, Korea and Japan) with Ariel Guarco, President of the International Cooperative Alliance (ICA) was an exhilarating experience. I had done this earlier in 2016 and was looking forward to this trip. The perks of traveling with the President are that you experience not only the red carpet laid out but also the opportunity it provides to hear directly about his vision for the ICA and from the heads of leading cooperatives about their issues, concerns and actions they would like to see taken.
At the start of the trip, I had the opportunity to ask Ariel about his expectation and the message he wanted to convey to members. “During my campaign, I had committed to building a closer relationship with our members and this is one of the promises I am fulfilling. Being the leader of a global organization, it is good to know members so that their views can be communicated back to the Board. This is important, as we are working on the 2030 strategy for ICA. We have to represent and build relations with international organizations, at the same time, we need to identify the common issues across countries and see how we can address these.”
In preparation for the trip, the ICA-AP Regional Office prepared snapshots for each country to capture contribution of cooperatives to the economy, evolution of cooperatives, laws in place and engagement with ICA and ICA-AP.
ICA has two members in Thailand, the Cooperative League of Thailand (CLT) and the Association of Asian Confederation of Credit Unions (ACCU).
CLT, the apex organization of cooperatives in Thailand, celebrated its 50th anniversary last year. Cooperatives are present in seven sectors – agriculture, fisheries, land settlement, consumer, thrift and credit, service and credit union – with agriculture and credit cooperatives accounting for 83%. CLT has established the CLT-ASEAN Centre to showcase products from cooperatives and promote trade among cooperatives within the ASEAN countries (see article Cooperatives and the ASEAN Economic Blueprint: Call for greater Co-op engagement and visibility).
During our meeting, Mr. Poramate Intarachumnum, Chairman of CLT said, “We want to strengthen international cooperation activities, promote cooperation among cooperatives and increase business related transactions.” CLT has produced a video to promote the COOP marque among the 8,130 cooperatives in Thailand. The Cooperative Promotion Department, the government wing responsible for promoting cooperatives personnel, classifies cooperatives into four classes. In their latest classification, 23% of cooperatives were in Class 1, 55% in Class 2, 7% in Class 3 and 15% in Class 4. In a meeting with CPD officials, Mr. Panuwat Na Nakornpanon, Executive Advisor said, “We are firm believers in the self-sufficiency economy which aims at improving human well-being as a development goal. This resonates well with cooperatives.”
ACCU which was set up in 1971 as a regional organization for credit unions, performs representation and provides long and short-term technical assistance, training, and information. ACCU with the Worldwide Foundation of Credit Unions, the social impact affiliate of the World Council of Credit Unions (WOCCU) is working on a digital platform to promote financial inclusion across the continent via interoperable, open-loop, low-cost, real-time payment platforms. Expanding on this, Ms. Elenita Sanroque, Chief Executive ACCU said, “We are exploring the use of open-source platform developed with support from the Bill & Melinda Gates Foundation.” In the spirit of cooperation among cooperatives, the Federation of Savings and Credit Union of Thailand (FSCT) has given office space to ACCU in its modern, energy efficient building. A revelation during the visit to FSCT was the museum they have created to showcase the history of the national and international cooperative movement and recognize the leaders who have contributed to the development of cooperatives!
Singapore National Cooperative Federation (SNCF) the apex body of Singapore’s cooperative movement represents 99% of cooperatives through its 66 affiliated cooperatives. One of SNCF’s mission is to raise awareness about cooperatives among youth and develop sustainable cooperatives/coop clubs. They implement programs which provide scholarships for education, internship opportunities in cooperatives, competition to seek ideas, and other activities. The number of campus cooperatives has been falling over time as the teachers and students find it onerous to follow the regulations. SNCF’s lobbying efforts have ensured that coop clubs can be formed without registering as cooperatives. According to Dolly Goh, Chief Executive of SNCF, “Cooperative is beautiful! You need to be creative to see how you can help. We understand the ground situation, know what we want, and how to work with the regulators.”
Cooperatives were considered the first form of social enterprise in Singapore. However, over time, other legal forms have taken gained traction. The 2017 State of Social Enterprise in Singapore shows that 69 percent social enterprises were incorporated as for-profit Private Limited companies, 12 percent Sole Proprietorship, and nine percent Limited Liability Partnership. In order to make cooperatives more competitive, SNCF has lobbied with the regulators and reduced minimum membership from 10 to 5; and reduced age limit for Committee of Management from 21 to 18 years of age. The meeting with Mr. Philip Ong, Deputy Secretary, Ministry of Culture, Community and Youth (MCCY) and Ms. Kristy Ho, Registrar explored the options to promote worker cooperatives, social cooperatives, and other forms looking into needs of the gig economy.
Health and Technology are two areas where cooperatives in Singapore are focusing their efforts. In Singapore, one in four seniors are still working and the employment rate for those aged 65 and older jumped from 13.8% in 2006 to 26.8% in 2018. The demographic shift puts immense pressure on Singaporean society in terms of shrinking workforce, drop in economic growth and increase in healthcare and social services costs. According to Ms. Chan Su Yee, CEO of NTUC Health Cooperative,“We provide an integrated suite of health and eldercare services which include senior day care, nursing homes, active ageing and home care. Our goal is to enable individuals to age well within their communities and homes, ensure they keep good health, build social networks and continue to do the things they enjoy.” GP+Coop is a new consumer and services cooperatives whose members are practicing general practitioners. It aims to provide quality medical services to meet Singapore citizens and residents’ needs and also care for healthcare providers so that they can provide care for the public. NTUC LearningHub Cooperative is one of Singapore’s largest continuing education and training providers. It generates its own content and works with world-leading content providers, making them accessible to workers and strives to equip workers with Adaptive, Technology and Technical Skills to stand ready for Industry 4.0.
Singapore Bicentennial in 2019 marks the 200th anniversary of Sir Stamford Raffles’ arrival in Singapore. To commemorate the Bicentennial, SNCF has organized a series of events, themed “Coming Together as One Through Art” to showcase how Singaporeans have benefitted from the social and economic impact that cooperatives have created through the years. The target audience is youth aged 20 to 40 years old. The first (September 2018) and second (February/March 2019) pop-up art event focused on credit and service sectors respectively. The SNCF Bicentennial Event 3 which we visited focused on the NTUC Co-operatives.
The cooperative movement in Indonesia has a long and rich history. Dewan Koperasi Indonesia (DEKOPIN) the national apex organization of cooperatives in Indonesia was established in 1947. Mr. Nurdin Halid speaking of the Cooperative Vision 2045 strategy said, “It aims at developing cooperatives in phases by improving food production, developing alternative energy sector, and creating employment and entrepreneurship opportunities for youth.” In 2016, on paper, there were 212,135 cooperatives with 37 million members (15% of Indonesia’s population). The Ministry of Cooperatives and SMEs through an exercise to improve the quality of statistics on cooperatives by categorizing cooperatives as active and inactive (those who have not submitted annual reports for two consecutive years) determined there are 148,220 active and 63,915 inactive cooperatives. Indonesia is also in the process of reviewing its law on cooperatives. The Co-op Law in 2011 (law no 17/2012) was annulled by the Constitutional court in 2014 as it went against certain cooperative principles. Based on the instruction of the Constitutional Court, a Drafting Team was set up by the government to compose a new Co-operative Law which is now in the final stages of being submitted to the Joint Session of the Government and Parliamentary Commission VI, for due enactment by the Plenary Session of Parliament (the latest is that the decision has been put off till September 13).
The ongoing trade spat between countries, especially the ratcheting of tariffs by the United States, opened up the conversation to explore opportunities for cooperative-to-cooperative trade. There is growing demand for soybeans (close to 2.725 million tons each year) in Indonesia to churn out foods such as tofu and tempe. Indonesia buys most of its soya beans from the US as the uniform size and color are suitable for local needs. Argentina is one of the top exporters in the world and farmers here have been facing pressure from downward prices. The potential to export soya beans, was ‘music’ to Ariel’s ears! 40% of cereals and exports from Argentina are by cooperatives and he saw ample potential for collaboration between the two countries.
During the visit, we got to visit the National Federation of Batik Producers Cooperatives; KOSPIN JASA, the biggest savings and credit Co-op in Indonesia; and the Tofu and Tempe Producers Cooperative. The most interesting visit was to the Small and Medium Enterprises and Cooperatives (SMESCO) Tower in Jakarta. SMESCO is responsible for developing and promoting Indonesia’s SMEs and cooperatives. On display are products from all 34 provinces which include handmade products by Indonesian craftsmen, Batik, fabric, crafts, furniture, jewelry, shoes, weaving products, food and beverages. SMESCO carries out trainings and workshops to develop the businesses of entrepreneurs, provides market information, introduces international buyers to members and does business-matching sessions. Deputy Minister, Mr. Luhur Pradjarto; Member of Parliament and ICA-AP Stakeholder Council Member, Ms. Eva Sundari; and other high-level officials from the Ministry of Cooperatives and SMEs who were present during the visit, engaged Ariel in a discussion on the balance between government support to cooperatives and the need for cooperatives to engage in emerging social areas.
The office of the International Committee for the Promotion of Chinese Industrial Cooperatives (ICCIC-Gung Ho) is located at the Peace Palace of the Chinese People’s Association for Friendship with Foreign Countries. This is also the place where Rewi Alley, a New Zealander, lived and set up the Chinese Industrial Cooperative in 1937. Michael Crook, Li Jianping, Xu Fenghua, andWu Haili gave us a history of the ICCIC has helping people establish member owned and operated cooperative enterprises since 1939. A group of internationals and Chinese patriots organized laid-off workers and refugees displaced by the Japanese invasion to set up manufacturing cooperatives to support the defense against the Japanese. It was called Gung Ho, meaning working together. Today, ICCIC continues to equip citizens, leaders, educators and policy makers to form cooperative enterprises that provide members with the financial and social benefits they need. They also work to promote legislation and policies which enable cooperatives to thrive.
The All China Federation of Handicraft Industry Cooperatives (ACFHIC) established in 1957, 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 Tao Xiaonian said that the ACFHIC is one of two national cooperative organizations and their membership covers 95% SMEs which include handicraft and light industries. This sector had registered consistent growth and it important as it provides steady jobs. ACFHIC is focused on creating jobs, promoting entrepreneurship and supporting value-added services. Their export focus is more on the ASEAN, EU and countries in the OBOR path.
The All China Federation of Supply and Marketing Cooperatives (ACFSMC) the second national cooperative organization is focused on the rejuvenation of rural areas. Cai Zhenhong, Vice President of ACFSMC, “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 has an important role to play through its supply and marketing network to modernize agriculture and improve the rural economy with emphasis on land trusteeship, integrated platform, and e-commerce.” China E Coop, a national e-commerce platform supported by the ACFSMC was launched in November 2015. E-Coop is 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. A 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). The platform links 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. China E Coop was registered with capital of ?3.605 billion ($569 million).
The last visit in Beijing was to the Community Comprehensive Store Daguanying. The store was officially opened in September 2018 and covers an area of 3,600 sqm and services five major communities, 70,000 households within a radius of 1 to 3 km. The first floor is a rented area composed of branded stores and entertainment center while the basement stocks fresh products, eateries and convenience store. It is meant to be a one-stop living service for urban residents and combines physical market and online market (orders services within 1.5 hours). It is also part of ACFSMC’s supply chain efforts to connects farmers in the neighboring areas by ‘connecting urban to rural,’ and ‘serving citizen and community.’ The more interesting aspect of the stop at the data monitoring center housed in one of the rooms at the back. On a large screen we were shown the real-time tracking using facial recognition technology of customer movement. The data captured included not only the usual numbers visited with break down by gender but also information on time spent in the shop, areas where customers were converging, products purchased, and amount spent.
The landscape for cooperatives in Korea changed dramatically following the passage of the Framework Act on Cooperatives. The Korea Social Enterprise Promotion Agency (KoSEA) is the government agency responsible for social enterprises and cooperatives. Social enterprises come under the Ministry of Employment and Labor while Cooperatives come under the Ministry of Economy and Finance. Unlike in Singapore where there has been a rise in social enterprises, in Korea, cooperatives have grown from 53 in 2012 to 15,585 in 2019 (till May). There were 1,937 social enterprises in 2018. Cooperatives in Korea prior to the Framework Act were governed by Special laws and limited to agriculture, forestry, fisheries, tobacco, SMEs, credit unions, community credit, and consumer. KoSEA as part of its Second Master Plan aims to form a sustainable cooperative ecosystem by ensuring business stability of cooperatives. The National Cooperative Association of Korea (NCAK) was formed in 2019 as the representative body of cooperatives formed under the Framework Act. Environment to allow growth, boost inter-cooperation, monitor and advance member needs.
Consumer cooperatives in Korea evolved in three distinct phases. In the 1920s in response to the “Buy Korean Products Movement;” under the military regime from the 1950s to 1970s; and the rebirth of the consumer cooperative movement in the 1980s following the Gwangju Uprising (May 1980) and achievement of democracy (Grand Political Change). The last wave was driven by housewives in their late 20s and 30s, with higher education (but lower workforce participation due to childbirth and child rearing), a desire to change the consumption habit related to food safety and environmental protection, and for whom cooperative ideas resonated. The pioneer of new consumer cooperative movement was Hansalim in 1987 which put in place direct trade with producers, producer-member-worker participatory structure, and expansion of organic market. The economic crisis of 1997 saw more than 66.7% of consumer cooperatives go bankrupt and the resulting reorganization saw the emergence of consumer cooperatives built business consortiums and unions, the four leading ones are Hansalim, Women’s Minwoo, Dure, and iCOOP KOREA. We had the opportunity to meet these cooperatives, individually and as a group. The consumer cooperatives have contributed to creating ethically responsible markets, fair trade, direct trade with domestic farmers, achieving local self-sufficiency, eco-friendly products, school lunch distribution business.
An important step towards inter-cooperation was the signing of a Memorandum of Understanding between President Guarco as head of Cooperar and Mr. Byeong Won Kim, Chairperson of the National Agricultural Cooperative Federation (NACF). Mr. Kim’s main concern has been raising farmers income and he has set an income target of 50 million won by 2020. According to Korea Rural Economic Institute, the annual income of farming households stood at 39.7 million won, which is only 63 percent that of urban households. NACF is hoping to achieve the target by purchasing agricultural products at higher prices, enhancing productivity in farming, cost cutting and developing new income sources for farmers. We also visited the National Federation of Fisheries Cooperatives (NFFC) and had discussions with Mr. Joon-taek IM, President, and board members.
There is excitement among cooperatives for the 2020 ICA Congress planned in Seoul. The Congress will bring together the Office of the President, Office of the Mayor of Seoul City, ICA members and the assortment of cooperatives which have come up in recent years. We had the opportunity to visit the state-of-the-art Coex convention center which is host the Congress. Situated next to Bongeun Temple and connected directly to the Coex Starfield Mall, Coex connects both ancient history and modern pop culture (Gangam style).
The Japanese cooperative movement has formalized itself as the Japan Cooperative Alliance (JCA) in 2018. In 2012, ICA members in Japan came together to celebrate the International Year of Cooperatives and formed an informal Japan Joint Committee of Cooperatives. The JCA will consolidate capacities of cooperatives across Japan and facilitate collaborations between cooperatives with the aim of solving social issues.
We had the opportunity to have separate meetings Mr. Shuichi Takatori, State Minister, Ministry of Agriculture, Forestry and Fisheries (MAFF) and Mr. Shigeru Taniuchi, Director General, Ministry of Health, Labor and Welfare. and Mr. MAFF has been supporting training of ICA members (men and women) from agriculture cooperatives in Asia over the past twenty-five years. While the support (in budgetary terms) has been decreasing over the years (due to drop in international aid), MAFF’s commitment to support the training has continued and the interest is still there. In recent years the MAFF training has also focused on Africa.
It was an interesting visit to JA Tokyo-Musashi located at the center of Tokyo and covering the cities of Kodaira, Kokubunji, Koganei, Mushino, and Mitaka. The 28,970 members (farm members 3,190 and associate members 25,780) are divided into production, youth, and women groups. According to Kenji Takahashi, President of the JA, “the local government and landowners work together to preserve and protect the land. Each day farmers bring their produce to our shop, set up their products and interact with the customers. The helps reduce the distance between the farmer and consumer and builds a spirit of community.”
The concern towards social and environmental issues was very obvious in visits to the consumer cooperatives. ‘Promote safe and secure foods,’ ‘society in harmony with nature,’ ‘co-existence,’ were the common refrain. Ms. Chitose Arai, Chair of the Co-op Mirai Consumer Coopartive and Vice-Chair of the ICA-AP Regional Board, while taking us around their facility said, “Supporting the needs of aging members by providing easy access to food (through dinner delivery, mobile stores) and addressing health needs is seen as a priority.” Co-op Mirai has built an integrated community care (ICC), which provide housing, medical care, long-term care, prevention services and livelihood support in an integrated manner in communities. According to Mr. Makoto Takeuchi, President of the Tokyo Consumer’s Cooperative Union, “All of us are vulnerable at some point in our lives. Our aim is to enable people live with a sense of security once they are in severe need of long-term care.”
Hikikomori is the term for group of extreme recluses who have often chosen to end all social contact, often refusing to leave their homes for years on end. Numbering upwards of a million, they are predominantly male in the 15 to 64 age group (the growing number in the 40 to 64 age group is a growing concern). At the offices of the Japan Workers Cooperative Union (JWCU) we had the opportunity to meet a few who had been brought out of their isolation. According to Hoshino, “more than work, the cooperative makes us feel wanted. We are not looked at as living of the government but treated as individuals who can contribute to society!” Japan still lacks worker cooperative law and the JWCU is actively advocating to have one in place.
Common thread across countries
Preserving culture, promoting local artisans and farmers, supporting indigenous products, highlighting contribution of cooperatives were common strands across the six countries. Examples were the CLT-ASEAN Center displaying products from cooperatives in ASEAN; the FSCT museum celebrating the history of cooperatives in Thailand and world over; SNCF’s ‘Coming Together as One Through Art’ to showcase how Singaporeans have benefitted from the social and economic impact that cooperatives have created through the years; the SMESCO Building in Jakarta celebrating arts and crafts from 34 provinces of Indonesia; and NACF’s museum tracing the history of rice growing and agriculture development in Korea.
The views of regulators in most countries were old school and they were satisfied maintaining the status quo. Their interest was mainly in agriculture and credit cooperatives. In relation to agriculture, their concern was to increase incomes and improve livelihoods; and with credit to see that cooperatives were properly regulated. The exception was Korea where the passage of the Framework Act has spurred a number of social, worker, and artisan cooperatives and there is keen interest to see that the new cooperatives work in line with cooperative principles.
The emergence of social enterprises and its attraction to youth is an area to keep a close eye on. As seen in Singapore, the number of social enterprises registered in forms other than cooperatives is significantly growing; while in Korea it has been the other way. While cooperatives are part of the umbrella of social and solidarity enterprises, the rules and regulations (for example – number of members, reporting requirements, capital options, control of authority) imposed make it a less attractive option. While calling cooperatives as a form of social enterprise is okay, it will not necessarily help to increase attraction among youth or increase numbers.
Cooperatives have historically evolved to address societal needs. This continues to this day, with cooperatives active in the areas of aging, health care, social reclusiveness, social services, energy and technology. The expressed need was for cooperatives to be more active as they can play a crucial role in care for the individual, prevention of illness, and social wellbeing of members and/or their dependents. Cooperatives as member-based organizations put health and well-being ahead of profits and can play a key role with vulnerable populations, including the disabled, seniors, and the mentally ill.
So, what are my impressions traveling with President Guarco? He is warm and affable as a person. He likes to stress his roots as a cooperator and is the first point he impresses upon in his meetings. Maradona, Messi, and soccer helps cement relations further!! He has moved up in cooperatives, from leading his local electric cooperative, to heading COPERAR the apex of cooperatives in Argentina, to representing the Americas region in the ICA board, and now serving as President of the ICA. He believes in the power of cooperatives and emphasizes regularly to government and policy makers, “Cooperatives are not marginal players. We have the strength of our members, the breadth of our sectors, and the depth of our socio-economic contribution. We are human-centered organizations!” Ariel is very accommodating and does not have any airs. He is willing to put in long hours to meet grassroots cooperators and in listening to their stories and sharing his experiences. He is a strong advocate of inter-cooperation as he feels only by working together can cooperatives help each other. His advice to cooperators is, “Diversity is one of our richness which we should value, cherish, and protect. Continue activities as cooperators as it improves the lives of people. At the same it is important that we enjoy what we do; only then we will do more.” Once again, traveling with a President of ICA, I surely learned a lot!
The trip would not have been possible but for the efforts of Phanuwat Wanraway (Thailand); Patsie Tan and Seng Huat (Singapore); Ilham Nasai and Pendi Yusef (Indonesia); Zhang Wanghsu and Chen Fei (China); Hyungsik Kim and Seungmin Lee (Korea); Kenki Maeda, Ayako Nakata, Oasmu Nakano (Japan); Nadia Robledo and Gabriela Buffa (Argentina); and Sethu Madhavan, Anam Mitra, Simren Singh, Mohit Dave (India). Thank you all!
*Travels with President 1.0 was with Monique Leroux to Japan, Korea, and China in 2016. The views expressed here are in a personal capacity.