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The cooperative key to sustainable development

On the occasion of the International Symposium “Cooperatives and the Sustainable Development Goals: Focus on Africa” in Berlin, ILO Cooperative Unit (COOP) Chief Simel Esim explains why cooperatives are vital to reaching the goals of the United Nations’ post-2015 development agenda.

Comment | 02 September 2014
Simel Esim, ILO Cooperative Unit
While the debate around the Sustainable Development Goals (SDGs) beyond 2015 is intensifying, the ILO has been actively promoting the cooperative model as an important instrument to promote sustainable development. We firmly believe at the ILO that the values and principles governing cooperative enterprises respond to the pressing issues of economic development, environmental protection and social equity in a globalized world.

Last year COOP launched a survey within the international cooperative movement to find out how the cooperative business model is contributing towards sustainable development, how the actors in the cooperative movement perceive the debate around the post-2015 development agenda, and which role cooperatives should play in this respect. The findings from the survey show how cooperatives made a difference in achieving sustainable development goals with concrete actions and engagement at the local level.

The full report is yet to be published. However, a policy brief shows that cooperatives are often present where private or state service providers are unable or unwilling to go.

Cooperatives thus play a key role in health and social care, access to financial services as well as water and energy provision in rural areas in many countries.

They also support more inclusive and equal trade relations and value chains through their engagement in alternative forms of trade, such as fair trade, and contribute to a low-carbon economy through innovative approaches.

How coops support SDGs

First, cooperatives can play a key role in poverty reduction. While savings and credit cooperatives facilitate their members’ access to financial capital, agricultural cooperatives help farmers access the inputs required to grow crops and keep livestock and help them process, transport and market their products.

In Ethiopia, 800,000 people in the agricultural sector are estimated to generate most of their income through cooperatives.
In Egypt, 4 million farmers derive income from selling farm produce through agricultural marketing cooperatives.

Second, cooperatives are major job providers. They employ at least 100 million people worldwide. It has been estimated that the livelihoods of nearly half the world’s population are secured by cooperative enterprises. The world’s 300 largest cooperative enterprises have collective revenues of US$ 1.6 trillion, which is comparable to the GDP of Spain.

Direct and indirect influence

Cooperatives’ impact employment on different levels: they employ people directly, and they promote employment indirectly through creating market opportunities and improving market conditions. They even influence those who are not members of cooperatives but whose professional activities are closely related to transactions with cooperatives.

Last but not least, recent evidence shows that jobs in employee-owned enterprises are less likely to be negatively affected by cyclical downturns and that these enterprises had greater levels of employment stability over the recent economic downturn.

Third, cooperatives are contributing towards gender equality by expanding women’s opportunities to participate in local economies. For instance, 49 per cent of members of the Spanish Confederation of Workers Cooperatives are women, while 39 per cent have directorial positions, compared to 6 per cent in non-worker-owned enterprises.

Meanwhile, women’s presence on financial cooperative boards can be as high as 65 per cent in a developing country like Tanzania.

Conference details

On 2 September 2014, an International Symposium “Cooperatives and the Sustainable Development Goals: Focus on Africa” is being held in Berlin.

This event, jointly organized by the Friedrich-Ebert-Stiftung (FES), the ILO, and the German Cooperative and Raiffeisen Confederation (DGRV), will inform the German and global development community how cooperative enterprises can contribute to economic, social and environmental sustainability.

It will also be an occasion for the cooperative movement to weigh in on the post-2015 development agenda.
These are only a few examples, as the report also documents the key contribution from cooperatives in other areas, including sustainable energy production, food security or health services.

Also, cooperative enterprises provide opportunities for specific groups such as informal workers by facilitating the transition to the formal economy. They can help others such as migrant and domestic workers to move away from poverty and find decent work opportunities.

For example, in Ecuador, the Bella Rica Cooperative formalized artisanal and small-scale gold mine workers, many of them migrant workers, offering them a proper work contract and helping them obtain rights on the minerals mined.

Finally, the report emphasizes the need to include the ILO’s Decent Work Agenda in the debate on the post-2015 development agenda. Creating millions of decent jobs around the world, cooperatives play a key role in the ILO’s contribution to the agenda.