Cooperatives in Conflict Failed States Presentation to AIARD

Cooperatives in Conflict & Failed States Presentation to AIARD June 8, 2004 Ted Weihe www. coopdevelopmentcenter. coop

Synopsis Cooperatives are: independent, memberowned & democratically governed businesses n Members accept risks and benefits including equity and patronage n Built on “collective identity & shared destiny” which is underlying factor in dealing with conflict, monopolies & failed states n 150 year history with major growth of cooperative networks after WWI, WWII, Korean War & mobilization of small producers in face of family oligarchies, usurers, & unethical middlemen in developing world n

Synopsis (2) Coops successful when imbedded in cultures where violence is often present n Create jobs for ex-combatants and minorities/IDPs through organizing small producers for high value markets n Bridging institutions between ethnic & sectarian groups for common economic objectives n Able to withstand violence with resilience n

Examples n SE Europe: Bosnia, Montenegro, Macedonia n Lebanon n El Salvador, Colombia n East Timor, Nepal, Afghanistan n Mozambique, Rwanda & Sudan

Economic underpinnings of failed states n Lack of national unity, infrastructure, & enabling environment for private businesses n Lack of basic personal protections & securities n Poverty n Economy controlled by warlords and others than benefit from conflict

Relief Agencies n Prolonged delivery of relief n Lack of focus on self-sufficiency n Local people must own their reconstruction n Relief NGOs not business or profit oriented n Sustainable development only occurs when disabling aspects of relief stop

Cooperative Difference n Take economic perspective n Look for social cohesion and trust bonds n Avoid donor mentality n Require mutual self-help n Strengthen market linkages n Create broad-based enterprises

Coops & Stable Societies n Key issue: Devolving of power in stable and just ways n Peaceful channeling of basic needs n Democratic management n Pluralism and open membership n Economic system based on heightened levels of trust

Coops & Stable Societies (2) n n n Coop membership has stake in stability Provide level playing field for all parties Conduct democratic operations in which members demand transparency Organize around strongly felt economic needs Create critical mass of groups of individuals and develop democratic leadership

Bosnia n n n Created coops for minorities who were displaced by ethnic cleanings in Srebrenica and other towns IPDs only willing to come back if rural jobs exist Traditional region of quality cheese production Local farmers came to Land O’Lakes and asked to form coops (not imposed) Coops overcame ethnic tensions with mixed boards and employees

Montenegro Collapse of zadrugas (collectives) with dairy cows distributed to 55, 000 farmers n Anti-Western attitudes due to NATO strikes in Kosovo n 35 cooperatives formed within one year through monetizing Italian and US feed grains n Now have 48 cooperatives with inter-ethnic, inter-religious and differing political views n

Lebanon Repaired damaged infrastructure in southern, conflict ridden area through democratic committees n Developed successful coops n Socio-economic development reduced tensions and conflicts n Minorities able to freely express their opinions and take part in decision making n

El Salvador n Rural electrification seen as peace dividend with peace accords n Electrified rebel towns (Santa Marta, Perquin) n Electric coop formed by ex-combatants n Coop opened membership to local populations and became bridging institution

East Timor n n n Coffee coops were controlled by Indonesians With independence, reformed member-owned coops became #1 employer, income generator & exporter Restored destroyed facilities and increased production and processing with quality controls for high value exports Coops resettled refugees from West Timor and monetized rural economy Coops provide primary health care

Mozambique n Network of 75 coop associations and 714 group businesses formed as part of recovery n Coops reduced costs to producers for inputs; generated high value crops n Reduced conflicts between farmers and cotton processing companies

Rwanda n n n 90 per cent of population rural Donors retarded recovery of coffee sector (3 yrs. of relief) Ag coops improve market access and exports Coops part of culture with 29% belonging to informal insurance and savings groups Credit unions bridge ethnic divides

Nepal Credit unions able to resist Maoists and therefore are not targets like government land banks n Coping mechanisms include: dialogue with guerrillas at local level, strong community support, deposit savings in banks rapidly, & taking savings home by directors n Community immediately reconstructed credit unions after any attacks n

Afghanistan & Sudan n Model credit unions now being formed in northern region of Afghanistan n Reform coop law in southern Sudan n Training in coop principles and practices n Cattle marketing and dairy coops likely to begin start-up n SPLM prefers coop model of development

Conclusions n n n Coops build on informal cooperation and are capable of rapid growth after conflicts Coops create jobs for IDPs, refugees and excombatants Coops help minorities deal with majority and distant markets, but need to become multiethnic to grow into successful networks Coops bridge inter-communal groups Coops rooted in cultures able to resist outside oppressors or guerillas

Further Analysis Historical and antidotal information confirms important role of coops in conflict n Need research to confirm hypothesis n Undertake sociological documentation on specific impacts of coops in conflict n Build evidence on conditions where cooperatives can be first line of defense against conflict and essential for rapid recovery n Ø To read paper, go to www. coopdevelopmentcenter. coop