Cooperatives: a business model widely used in rich countries
Cooperatives, though useful, are not a noticeable tool in Guyana’s economic development. Guyana is not the only country where cooperatives, after being a central focus, ended up playing a marginal role in the society. Estonia, Latvia, Poland and Romania are examples of countries in which cooperatives were once a significant part of the economy and currently play a marginal role. The reputation that cooperatives had in these countries reportedly was not a good one, even though their value is well appreciated. While many are slowly returning to the cooperative business model, already rich developed and emerging countries have been taking advantage of it for centuries.
Born out of crisis
Anyone who followed the story of cooperatives over the years would come to realize that cooperatives are quite a phenomenon in the agricultural sector of the major economies of the world. As noted by Thomas Gray (2012) writing in the Rural Cooperatives magazine published by the US Department of Agriculture, “Cooperatives have had a long history of being able to respond to farmers’ needs to gain higher prices and more favorable terms of trade and power in the market place. Farmers marketing together are often able to realize better prices and terms of trade through cooperative organization.” At different times and in different parts of the world, cooperatives have been used to forestall unemployment. They have been used to avoid starvation and they have been used to survive depressions. Cooperatives have made many communities in Europe and North America better and, through strategic alliances, helped to change the economic and social fortunes of their people. The evidence to support the assertion that co-operatives are usually born out of a crisis or usually are the best response to a crisis could be found in a study conducted by the ILO entitled ‘Resilience of The Cooperative Business Model in Times of Crisis.’
The report contains many examples to support the general thesis as reflected by its title. It pointed out that, after the eventual collapse of the Soviet Union in 1991, Finland experienced a severe recession that led to unemployment reaching upwards of 20 per cent. The unemployed responded by forming about 1,200 workers’ cooperatives. Similarly, in Argentina in 2001, after a financial meltdown and thousands of bankruptcies, workers took over about 200 firms and started running them as cooperatives. Before and even after those events, other acts of turning to cooperatives for help …..To continue reading, login or subscribe now.