The role of cooperatives in achieving sustainable development
KAMPALA– This year’s International Day of Cooperatives theme is “Cooperatives: partners for accelerated sustainable development”. According to the World Co-operative Monitor, the largest 300 cooperatives and mutuals reported a total turnover of US$ 2,034.98 billion in 2019.
Cooperatives contribute to sustainable economic growth and stable, quality employment, providing jobs or work opportunities to about 400 million people across the globe, namely around 10 percent of the world’s employed population. According to Monitor Coop, co-operative members reach more than 12 percent of humanity.
About one billion people are involved in cooperatives in some way, either as members/ customers, as employees/participants, or both. Cooperatives employ at least 100 million people worldwide. It has been estimated that cooperative enterprises secure the livelihoods of nearly half the world’s population. The world’s 300 largest co-operative enterprises have collective revenues of US$1.6 trillion, comparable to the GDP of the world’s ninth-largest economy- Spain.
As value-based and principle-driven organisations, cooperative enterprises are by nature a sustainable and participatory form of business. They emphasis job security and improved working conditions, pay competitive wages, promote additional income through profit-sharing and distribution of dividends, and support community facilities and services such as health clinics and schools. Cooperatives foster democratic knowledge and practices and social inclusion. They have also shown resilience in the face of the economic and financial crises.
Hence, cooperatives are well-placed to contribute to sustainable development’s triple bottom line of economic, social and environmental objectives plus the governance agenda, not least because they are enterprises that endeavour to meet the economic progress of members while satisfying their sociocultural interests and protect the environment.
They offer an alternative model for social enterprise, with contributions to sustainable development well beyond job creation. Since co-operatives’ share in GDP and total enterprises is relatively small in most countries, their promotion and expansion could be important for achieving the Sustainable Development Goals [SDGs].
Cooperatives are highly relevant and important in the realization of the proposed sustainable development goals as highlighted below:
Poverty Eradication
There is a widely held consensus among many actors, including the United Nations [UN], the International Labour Organisation [ILO], and the International Cooperative Alliance [ICA], that the co-operative enterprise is the type of organisation that is most suited to addressing all dimensions of reducing poverty and exclusion.
The way cooperatives help reduce poverty is important – they identify economic opportunities for their members; empower the disadvantaged to defend their interests; provide security to the poor by allowing them to convert individual risks into collective risks; and mediate member access to assets that they utilize to earn a living.
Agricultural cooperatives are well recognized for their poverty reduction efforts; for instance, in Tanzania, improved co-operative marketing of farm products like milk and coffee has meant that co-operative members can afford fees for their children’s education.
Saccos also contribute to poverty reduction, as in Kenya, where development loans have been used to buy land, build houses, invest in businesses and farming, and buy household furniture.
Gender equality
Cooperatives contribute to gender equality by expanding women’s opportunities to participate in local economies and societies in many parts of the world.
In Uganda, women’s participation in agricultural co-operatives is increasing faster than men’s. Women’s presence on financial cooperative boards in East Africa ranges from 24 per cent [Kenya] to 65 per cent [Tanzania], according to a study by Majurin E.
Quality education and lifelong learning
Cooperatives support access to quality education and life-long learning opportunities by providing the means for financing education; supporting teachers and schools; establishing their own schools to provide quality education to both youth and adults; and serving as centres for lifelong learning. Cooperatives can also be a direct source of educational finance; in Kenya, for example, the main type of back office loan offered by most Saccos is for paying school fees, and this trend has been documented similarly in other African countries such as Ghana, Nigeria, Cape Verde, and Uganda.
Health
Cooperatives ensure healthy lives by creating the infrastructure for delivering healthcare services, financing healthcare, and providing home-based healthcare services to people living with HIV/AIDS, among others. Many Saccos locally participate in health promotion activities through their Corporate Social Responsibility programmes.
Food security and good nutrition
Cooperatives contribute to food security by helping small farmers, fisher folk, livestock keepers, forest holders and other producers solve numerous challenges confronting them in their endeavours to produce food. Farming and agriculture are where the cooperative business model is most widely utilised. Cooperatives together have an estimated 32 per cent of the global market share in the agricultural sector, according to a study by Bibby A. titled “Co-operatives are an inherently more sustainable form of business.”
Employment creation, livelihoods and equitable growth
Cooperatives play a significant role in employment creation and income generation.
Access to water and sanitation
Cooperatives are increasingly becoming major actors in facilitating access to clean water and sanitation services to make up for the failures of both the public and private sectors.
Co-operatives have provided alternative ways for urban communities to get clean water and safe sewerage services.
A Summary of Cooperatives Sustainable Development Goals
- End poverty
- Empower girls and women and achieve gender
- equality
- Provide quality education and lifelong learning
- Ensure healthy lives
- Ensure food security and good nutrition
- Achieve universal access to water and sanitation
- Secure sustainable energy
- Create jobs, sustainable livelihoods and
- equitable growth
- Manage natural resource assets sustainably
- Ensure good governance and effective
- institutions
- Ensure stable and peaceful societies
- Create a global enabling environment
Source: A Policy Brief by ICA and ILO.
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