Had it not required a referendum, Guyanese it seems would have long since
got rid of the word 'Co-operative' from the official name of their country.
It is another of the initiatives with which the late and first President of
Guyana is indelibly associated largely because the co-operative movement is
seen to have failed in Guyana. Few co-ops, as the entities are called, have
survived but the Fishermen's Co-operative Societies of Georgetown, Berbice
and Essequibo, the Police Consumer Co-operative Society and a number of
credit unions still survive with varying degrees of success. In fact so
tainted is the movement that we hardly recognise that our leading housing
entity, the New Building Society, operates under the principles of the
co-operative movement even though it does not fall within that statutory
The co-operative movement plays a major role in poverty alleviation not
only in poor countries of Asia and Africa mainly, but in the UK as well
where the co-operative movement was born in the eighteenth century with the
formation of the Rochdale Friendly Co-operative Society formed by a number
of workers rendered jobless as a consequence of the effect of the Industrial
Revolution on the woollen and cotton industries in England.
It has had more than one hundred years of success in India, and in South
Africa the movement is so important that it is the subject of a direct
ministerial portfolio. In India the co-operative is recognised as having
played a pivotal role in that country's dairy production, it is big in
housing and in the credit movement and even in the market-driven USA, a
number of financial institutions are co-operatives.
Yet, even as we discuss our strategies for poverty reduction we ignore
the potential of the co-operative movement to its alleviation. I have argued
that what we need is not a strategy for poverty alleviation but an agenda
for economic growth. Yet I concede that for the moment the rate of economic
growth is too slow to lift the living standard of the very poor in the
country, particularly in the rural areas. The experiences and examples where
genuine poverty reduction has taken place make a compelling case for the
co-operative movement as a critical vehicle.
The co-operative principle is quite simple and is based on a few
1) The poor and powerless are poor and powerless because they lack access
to resources. By association with others, however, they can pool and or
access those resources and therefore attain the material rewards available
to the more fortunate in the society.
2) Poor farmers will generally be poor producers and a poor fisherman's
catch will be no more than can feed his family. The opportunities for
capital accumulation or formation are severely restricted. Yet the capital
requirement of the poor is not vast sums of money but modest sums which are
available in their very communities.
3) By its very nature, the movement is co-operative and therefore enjoys
a different form of organisation. It is one person, one vote, no major
shareholder and is very much more democratic in its administration than the
typical private sector, profit-oriented organisation. It is an exercise in
empowerment, a prerequisite for poverty reduction.
4) The poor, no matter that they may constitute a major segment of a
society, live on the margins of that society which structurally and
otherwise discriminates against the poor in the allocation and distribution
5) The co-operative movement reflects the values of self-help,
self-administration, self-responsibility; open and voluntary membership,
democratic management and control; one member-one vote election of
office-bearers for a limited term of office; consensus forms of
decision-making; limited return on capital and political neutrality.
Our own co-operative legislation is very typical of the British style of
legislation with the characteristics of a 'development law,' i.e. a law
designed to promote development in a planned direction by education of
co-operators and encouragement of co-operatives. And we support this type of
legislation with tax benefits by exempting from taxation the income of
co-operatives. The poor need to stop complaining about who pays the taxes
and who gets the tax benefits and take advantage of the incentives that are
available to them.
The post-slavery society was largely a co-operative society with the
purchase of estates facilitated and financed by pooling the meagre resources
of the former slaves. With the formalisation of the co-operatives, the
Registrar of Co-operative Societies'(RCS) original function was more like a
mentor, advisor and promoter of development entrepreneur, but as
co-operatives failed and more regulation and supervision became necessary
the registrar was increasingly seen as a supervisor and policeman.
His function was to register new societies, to audit existing societies,
to carry out enquiries in case of irregularities discovered during the
course of audit, to dissolve and liquidate societies either on the demand of
co-operators or ex-officio and to settle disputes within and among
co-operatives, touching the business of a co-operative society (excluding
access to court). In addition, the RCS had the overall responsibility for
sound development of co-operatives. For this purpose he developed
non-statutory powers supplementing his statutory powers, implied and deemed
to be covered by the law. The most important non-statutory powers were to
carry out inspections outside audit (surprise inspections, routine
inspections), to attend meetings of co-operatives and to influence the
agenda, to make potentially dangerous decisions of co-operative
office-bearers subject to his prior approval and to remove unfit officers.
Despite the obvious benefits, as we have seen under President Burnham,
co-operatives promoted for purposes other than the pursuit of the interest
of all their members, eg to mobilise for political purposes, to target
resources or to control and distort production as in the case of some
producer and marketing organisations, are unlikely to last. The best
guarantee of success is if the co-operative enables its members to gain
access to knowledge, markets and credit, pool resources and to build up
countervailing power against traders and financial service providers, and
initiate processes of mutual learning, knowledge sharing with promoters and
innovation at peoples' own speed.
Apart from the low political morale of that era, the failure of
co-operatives during the Burnham administration was also more systemic and
due in no small measure to lack of experience and the overnight manner in
which we attempted to institute a formal co-operative arm to the economy.
The functions of the development entrepreneur and mentor did not fit into
the career structure of the public service operating in a closed department,
but required specialised training and skills which could only develop with
years of experience. Instead of having this at its disposal, the
co-operative department was hardly seen as a career of choice but a place
for low-paid officers who were required to work long hours, travel and stay
away from their base, all the while expected to remain enthusiastic
co-operative promoters. It just could not happen.
The bad experiences, a commitment to a market economy and the mistaken
belief which many policy-makers have that trickle-down economics work, make
a come-back for the co-operative movement very doubtful. But the value of
the co-operative movement is too important to ignore. The fact that it
failed under one political dispensation is hardly grounds for ignoring a
tried and tested vehicle of poverty reduction. It has to be approached
The structure and work of the Co-operatives Department need to be
reviewed and more resources made available to it to promote the concept of
the co-operative. It will need persons with entrepreneurial talent and a
career structure that keeps the trained officers. It must be headed by an
experienced administrator with specialist knowledge in promoting development
and must not be required to become directly involved in matters of indoor
management of co-operative societies even where the registrar has to take
control because of breaches by the management. The parallel in the private
sector is the appointment of a receiver and any such work should be farmed
out to independent administrators. Where the registrar becomes involved in
the organisation and management of societies under their supervision, they
lose their neutrality as advisers, auditors and arbitrators, and the advice
becomes an order.
In a paper marking the one hundred years of the Co-operative Society Act
in India, Professor Hans H Muncker of the University of Marburg noted that
co-operative officers doing field work have to be well trained, convinced of
the importance of their task, highly motivated and with room for their own
initiatives. He pointed out that without reasonable pay and career prospects
the best officers would leave and the remaining staff will be a negative
selection of persons accepting the bad service conditions because they have
Let us give the co-ops a try even if we change the name of the country.