CO-OPERATIVES AS A VEHICLE FOR DEVELOPMENT


Guyana is still officially named “The Co-operative Republic of Guyana.” The name was devised at the time when Guyana discovered its own path to socialism – through co-operatives. Thus Guyana’s theory of co-operative socialism was reflected in its name.
The spectacular collapse of “co-operative socialism” and the co-operative movement led to the complete abandonment of co-operatives as a method of economic organization. Thousands of people had lost millions of dollars which had been invested in agricultural, housing and other types of co-operatives. Bad management and corruption in a situation of declining economic growth had taken their toll.

 
During last week the Government announced its initiative for single mothers – a fund of $500 million to be made available through the banking system for micro enterprises. The Government will lose a golden opportunity if it fails to introduce the potential of co-operatives as a effective instrument of maximizing organizational capacity in micro enterprise and small business development. Co-operatives can also be effective in large scale development but, rather than imposing it as an ideological weapon as in the past, it must be allowed to grow naturally. It will never be the vehicle for introducing socialism but it can be utilized for its natural advantages in small scale businesses.
 
Since the time of Robert Owen (1771 – 1858), the Welsh social reformer and pioneer of the co-operative movement, co-operatives have grown in the range, size and sophistication of businesses that they embrace. Studies of co-operatives and co-operative economics are now major academic subjects in keeping with the growing importance of co-operatives as a form of economic organization, particularly in developed countries. 
Its major advantage is that it democratizes economic management and promotes notions of economic democracy and equality where all members share in profits rather than a few dominant shareholders. Some types of co-operatives, such as consumer co-operatives, take advantage of economies of scale thereby benefiting its members with cheaper goods. 
 
Experience in Guyana shows that the development of co-operatives, which would be a wholly welcome advance in economic organization, would only be enhanced only where its advantages can be demonstrated as opposed to other methods such as partnerships, limited liability companies or business registration. The options must be given to entrepreneurs and the advantages and disadvantages of each method must be explained. This should be seen as part of the promotion of business activity in Guyana and must be undertaken by the appropriate government agency. The development of a strong, healthy, growing co-operative sector would be an important step forward in the promotion of economic democracy and social justice in Guyana. Guyana’s previous failure in moving the co-operative sector forward ought not to be an obstacle in promoting co-operative development at this time.
 
The PPP in its policy documents says that it believes in a mixed economy, that is to say, a private sector and a public sector. The PPP/C Government had said that it believes that the private sector is the engine of growth. The way this has played out, whether by accident or design, reveals no contradiction. There is a public sector, restricted mainly to the Guyana Sugar Corporation and Guyana Oil Company, which controls a significant but not a majority section of the economy. The private sector is large and growing larger still. The PPP has always supported the development of co-operatives even though during the years of PNC rule it had opposed the ideological pre-eminence given to co-operative socialism, deeming it ‘utopian.’ However, since the collapse of the PNC’s experiment, it has done little to promote the idea of co-operatives as an instrument of economic democratization. Now is the time.
 
Co-operatives are regulated by law. The Co-operative Societies Act provides for the registration of societies, their duties and privileges, the rights and liabilities of members, the property and funds of registered societies, audit inquiry and inspection of societies, dissolution of societies, resolving disputes and other matters. 
 
Single mothers and small entrepreneurs who would be encouraged to establish co-operatives to improve efficiency and equality, would be unable to observe the technicalities provided for by the law. This problem can be solved by restoring the expertise which once existed. There were  many co-operative officers who were trained when co-operatives were being heavily promoted in the 1970s and 1980s. That expertise ought to be renewed and if it is, the co-operative movement can once again be effectively serviced.
With all the challenges facing the Government, this proposition may well be dismissed as of little importance at this time. But there is no better time than now. If the promotion of co-operatives is linked with the development small businesses through micro credit and otherwise, the promotion of co-operatives can have a big impact among this group and lead to further development.
 
A significant impact of co-operatives on the economy, in the sense of controlling something in the vicinity of ten percent, will take a considerable period of time. But if it can be encouraged to eventually grow and influence a large enough section, it will significantly advance the notions of equality and social justice which are part of the PPP’s and Government’s agenda. (www.conversationtree.gy)    

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