General Assembly of the International Cooperative Alliance - Cartagena de Indias, Colombia, 22-23 September 2005
Opening Statement by José Antonio Ocampo Under-Secretary-General of the United Nations for Economic and Social Affairs
Cooperatives: Partners in a Fair Globalization

There are several reasons why I am very pleased to be here today. First, the cooperative movement is an important partner in the implementation of the United Nations Development Agenda. I am thus honored to transmit to you the warm regards of the Secretary General of the United Nations and to join you on this important occasion. I would like to thank the International Cooperative Alliance and the host organizations in Colombia—Confecoop and Saludcoop—for inviting me to participate in this General Assembly. Second, we are meeting in my country. As you welcome me to your Assembly, let me also welcome you to Colombia and to Cartagena de Indias. I hope you will all be able to experience this enchanting city, pride of Colombia and patrimony of humanity.

The United Nations recognizes the cooperative movement as an important player in the achievement of a fair globalization. The World Summit for Social Development, held in Copenhagen in 1995, underscored the importance of cooperatives in a people-centred approach to development. More recently, the Report of the Secretary General of the United Nations on “Cooperatives in Social Development” has highlighted the broader role that cooperatives play in the area of socio-economic development and, particularly, their role in poverty eradication.

The cooperative movement is an important part of the “social economy” that operates between the state and the market. Historical experience indicates that competitive markets alone cannot be relied on fully to meet the needs of all people, particularly the poor. On the contrary, all too often competitive markets generate growing inequalities and social exclusion. Furthermore, this tension between markets and social inclusion has tended to grow in this era of rapid globalization. The national institutions created in the past to manage this tension have weakened or proved inadequate to the new challenges posed by global markets.

The response to this tension has been the call for better global governance and a stronger international social agenda. A Commission organized by the International Labor Organization’s Commission made a call last year to incorporate into that agenda the “Social Dimensions of Globalization”. The United Nations Development Agenda, generated by the major UN Conferences and Summits of the past fifteen years, responds to that call. And last week it received again the full backing of world leaders in New York, at the largest Summit of Heads of State and Government in history. There have also been calls for civil society and the private sector to help resolve the tension between markets and social inclusion. We see in response the increasing emphasis on the principles of corporate social responsibility. It is in this context that I want to discuss the cooperative movement, born a century and a half ago out of the perceived need to build bridges between markets and social inclusion. In this era, this need has only grown deeper, and so the cooperative movement is now being called urgently to address it, and with renewed vigor. This is the essential insight captured in this Assembly’s theme: “Cooperative Values, A competitive asset in a globalized economy”.

All of you share the values and practices that underlie the cooperative movement. As people-centered businesses and organizations, cooperatives offer a solidarity-based model of economic organization, which aims to help their members achieve their socio-economic needs and goals. As autonomous, member-owned enterprises, cooperatives generate and protect income and employment by pooling limited resources and reducing risks, while simultaneously promoting social cohesion in communities. This stress on service to their members, combined with their concern for the welfare of the broader community to which they belong, makes cooperatives both a complement and an alternative to privately-owned business enterprises. Let me dwell, in particular, on the contribution that cooperatives make to socio-economic development—through poverty reduction, helping manage the risks that their members face, promoting access to social services, and creating channels for social participation.

Cooperatives contribute to reducing poverty by helping create and improve income and employment opportunities. This has become crucial in a world economy too often characterized by “jobless growth”, where the limited creation of formal employment has led to a broad-based trend towards the growth of the informal sector. Cooperatives in fact provide employment opportunities to around 100 million people and benefit about 800 million members. I would like to emphasize the role of cooperatives in the rural sector, where most of the poor in the world work.

Cooperatives have always played an important role in supporting and promoting small and medium-size enterprises, in agriculture, but also in transport and handicrafts, to mention just a few sectors. By organizing themselves into cooperatives, small and medium-size producers have been able to obtain access to needed inputs and marketing services that they could not have obtained on their own. Marketing services are especially important for small and medium-size producers to establish themselves in both domestic and international markets. Here in Colombia, Colanta, with some 14,000 members, most of them small-scale cattle raisers, has become the largest dairy producer in the country. Our major agricultural sector, coffee, has always benefited from a network of cooperatives. The National Federation of Coffee Growers of Colombia, around which most of these cooperatives are organized, has succeeded in firmly establishing Juan Valdez, his mule, and the Colombian mountains, in the global marketplace.

Cooperatives also contribute to poverty reduction through the provision of financial services. This issue has been a key concern this year because the United Nations and its partners at all levels are actively observing the International Year of Microcredit. The Year has been very successful in conveying the message of the need to promote inclusive financial services. And the cooperative movement has been an important partner in this initiative. Indeed, the theme of this year’s International Day of Cooperatives —“Microfinance is Our Business! Cooperating out of Poverty”— was itself an important message, furthering the goals of the International Year.

Credit unions currently provide affordable access to financial services to about 136 million members in 91 countries worldwide. An increasing number of credit unions provide affordable remittance services, particularly to migrant workers. In addition to credit services, cooperatives encourage voluntary savings among poor people.

Experience over the years has shown that poor people, perhaps more so than the non-poor or the rich, also need a variety of risk mitigation products. The recent tsunami disaster in Asia provided a serious reminder of the importance of risk mitigation for the poor. The ability of the poor to smooth out fluctuations in their income or to respond to economic shocks is crucial in reducing their vulnerability to poverty. Furthermore, unmanaged risk destroys the prospect of economic growth. Here, La Equidad, an insurance cooperative, serves more than 3.3 million people as members and customers. So cooperatives help reduce poverty not only by generating incomes and employment, but also by protecting the limited but precious assets of the poor through the provision of affordable insurance products for the needy.

The financial services provided to the poor must be integrated into the formal financial system, with financial sector cooperatives as full participants. This will help to improve the viability of service providers, and thus broaden and extend access to financial services for poor people in a sustainable manner. The crisis of major credit cooperatives in Colombia in the late 1990s underscored why the financial services provided by cooperatives must fulfill the highest standards of credit risk management.

The growth of health care cooperatives is another manifestation of the capacity of the cooperative movement to provide useful services to society. A successful medical service cooperative, COOMEVA, has been a reference for me since my childhood in my native city, Cali. In recent years, rising costs of health care and lower government spending on social services have created in many contexts opportunities for cooperatives to address social inequities. When social sector reforms open up opportunities for non-state actors, cooperatives can become major players. One of the co-sponsors of this event, Saludcoop, is an example of this, as well as community enterprises and the Cajas de Compensación Familiar, a solidarity institution based on a partnership between business and labor that has been extremely successful in Colombia.

Cooperatives provide opportunities for social inclusion in still another sense. The participatory and democratically-based approach of cooperatives is particularly helpful in improving representation for marginalized groups. To take a prominent example, through the inclusion of women and youth, cooperatives promote inclusiveness in societies. I am heartened to see youth well-represented at this General Assembly, through the Youth Conference side event. I hope this will be an occasion to strengthen the link between the Youth Employment Network and the cooperative movement in devising innovative strategies to provide much needed employment opportunities for the world’s youth.

As you know, in partnership with all stakeholders—particularly with the Committee for the Promotion and Advancement of Cooperatives (COPAC)—the United Nations works to promote the growth of cooperatives as an effective mechanism for achieving participatory socio-economic development. Our major objective is to promote a supportive environment for the development of cooperatives that would allow this solidarity-driven economic institution to broaden outreach to the poor and vulnerable groups, and to promote and facilitate their contribution to poverty reduction strategies. The success of this effort will require strong associations of cooperatives at the national, regional, and global levels, as well as strong state institutions for the promotion of cooperatives. Efforts towards such institution building must be at the center of the effort to advance a strong cooperative movement.

Dear Delegates:

This Assembly will show that the cooperative spirit is very much relevant and vigorous, and that the cooperative movement can become a central force in the construction of a fair globalization. As they did a century and half ago, cooperatives today provide one of the most promising mechanisms for resolving the growing tension between free markets and social inclusion, –by putting economic democracy and self-help to work, and by empowering citizens and communities. In the name of the United Nations and its Secretary General, I extend to you best wishes for the success of this Assembly. And I express to you our deep conviction that cooperatives are a vital partner in our efforts to achieve the United Nations Development Agenda, particularly the first Millennium Development Goal: to halve poverty and hunger by 2015. Together, we can all help to make poverty history.