Co-operatives and the Fair Society

Co-operatives and the Fair Society

This year’s theme for the International Day of Co-operatives is centred around the aspect of equality, and the role of co-operatives in making our societies fair and sustainable.

With the advent of globalisation, there were dreams of a more equitable distribution of wealth, knowledge, people and technology. With the benefit of hindsight however, it is evident that we have been incapable of making the best of coming together: A recent Credit Suisse report estimated that the top one percent of the globe’s population possesses nearly half of the world’s wealth, whereas the bottom half of the world’s population holds less than one percent of its riches (ICA2015).

Inequality is on the increase. Gender, ethnic, regional or locational inequality has its side-effects on society. It slows down a country’s growth, excludes people from the country’s main institutions, it fosters corruption and conflict, erodes the fairness of institutions and makes people foreigners in their own countries.

By their very nature, co-operatives promote equality, primarily because its members are owners of the enterprise. Membership in co-operatives is open and voluntary. Moreover, the emphasis is not on financial prowess, but on individual input and ability; one person, one vote.

There are 2.6 million co-operatives worldwide, with over one billion members. This amounts to triple the amount of direct shareholders in investor-owned companies. Co-operatives employ around 250 million people. The largest 300 co-operatives have combined revenues of 2 trillion Euro. That’s the equivalent of the GDP of the 7th largest economy in the world.

Examples are everywhere and not necessarily far from home. In Italy, the largest supermarket chain is Coop. 7.5 million members share the fortunes of the co-operative, that has annual revenues of almost 14 billion Euro. 22.5 million Italians are co-operative members. In Denmark, consumer co-operatives in 2007 held 36.4% of consumer retail market. The Mondragon Corporation in Spain is owned by 74,000 workers, generating 12.5 billion Euro annually. In France, 21,000 co-operatives provide over 1 million jobs representing 3.5% of the active working population. In Norway out of a population of 4.8 million people, 2 million are co-operative members.

Increases in GDP and economic expansion normally make headlines; even in Malta. However, the way that wealth is being distributed is seldomly discussed. This is the basis of equality. We need to have a closer look at ourselves and question whether the benefits of business activities are reaching those that are creating it in the first place. Rather than having wealth trickling down the social and economic ladder, co-operatives can be instrumental for people to become direct beneficiaries of that wealth.

Malta’s co-operative movement is currently at crossroads. The Malta Co-operative Federation sees ample potential for this democratic business model to take root, diversify into more economic sectors, provide employment, and encourage people to benefit directly from the wealth they generate. The Malta Co-operative Federation has proactively participated in discussion on the sector’s reform, and looks forward to participate in the discussion on social co-operative legislation. However, we now need to move from words to facts; we urgently require changes to the Central Co-operative Fund rules, as well as to co-operative legislation. We need a reform that lays down rules that enable, rather than control; that motivate for action and innovation, rather than create a comfort zone for conservative mindsets. We desperately need a system that promotes unity through diversity; we have to discuss ways on how our educational system can really foster a culture of cooperation. We need an environment that encourages the creation of co-operators that are entrepreneurial, creative and are aware of the tangible benefits of working together.

Co-operatives present us with a fantastic opportunity to shape our society the fair way. Through education, courageous political decisions and the right environment, we can make it happen. There are issues that are crying out to be addressed. Success, however, will depend on the will to build a fresh approach built on sound co-operative principles. Socrates once stated that “the secret of change is to focus all of your energy , not on fighting the old, but on building the new”. It’s useless tackling today’s issues by wearing yesterday’s thinking hats. Let’s look to the future.

John Mallia
President

About the Author

John Mallia is the President of the Malta Co-operative Federation
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