PROMOTING COOPERATIVE DEVELOPMENT
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Rodrigo Gouveia

14 January 2021

Cooperative Outlook for 2021

2020 was an unprecedented year. The Covid-19 global pandemic has affected and continues to affect everyone in the world at the same time, a scenario worthy of a dystopian work of fiction. We entered 2021 with the same scenario, but now with a little more knowledge about this unusual situation. Despite this, many uncertainties remain and 2021 will bring enormous challenges for cooperatives.

The news of the existence of effective vaccines against the new coronavirus brought a tone of optimism to the New Year. However, in countries where such vaccines have already been approved for emergency use, their administration has been slow and has caused some unexpected logistical problems. In addition, the distribution of existing doses of the vaccine is being prioritized for high-risk groups, as it should be, and millions of people will have to wait a long time before receiving the vaccine. It should also be noted that in many countries the vaccine is not yet available. For all these reasons, there is still much uncertainty about when the vast majority of the population will be vaccinated, and it is already certain that this will vary from country to country. It is to be expected, therefore, that the global pandemic will continue until the end of the year, even if the situation is gradually improving in some places, foreseeing the continuation of restrictions, with the consequent negative impact on economic activity. To increase the uncertainty, new variants of the virus are emerging and bringing concern to scientists about its consequences. Cooperatives must therefore be optimistic, but careful, and plan the year considering that the pandemic will not end.

In 2020 the world economy contracted about 3%, with only China, among the largest economies, having a positive growth. It was, therefore, a true global recession in which ¾ of the countries showed negative growth. The growth forecast for 2021 is, however, much more positive, in the order of 5-6% with emerging economies leading the way to recovery. But you need to be careful when looking at these numbers. On the one hand, because these are projections and, as such, they may be wrong. These projections were made based on the idea that economic activity would quickly return to normal in 2021 due to the existence of vaccines, but, as previously said, this may take much longer than initially thought. On the other hand, these figures reflect economic growth compared to the previous year. In other words, real growth compared to the situation that existed before the pandemic will be much lower. If it is true that cooperatives have a certain natural resilience to economic crises, largely due to their performance in essential markets such as food, it is also true that not all of them have this resilience and, like other companies and organizations, they need a positive economic and social environment in order to develop. As such, cooperatives should be concerned about the negative consequences of the crisis, particularly in the first half of the year, before the expected economic recovery and should avoid higher risk operations and investments until there is greater certainty about the economic outlook. Even so, cooperatives that carry out essential activities and, as such, have not suspended or excessively limited their activity due to the pandemic (e.g. agricultural cooperatives and consumer cooperatives), can continue to benefit from this exceptional situation to positively impact the economy according to their values and principles.

This global crisis created a certain opening in the minds of politicians to find different solutions for the economic and social response. This is the ideal time to demonstrate that cooperatives are effectively different from other companies and to reach out to policymakers to ensure their support for the development and strengthening of the sector after the crisis. There is an openness in public opinion to understand and accept concepts and proposals that are alternative to the current system, as reflected in a recent report by the New York Times on Mondragon’s cooperatives in Spain. But one cannot be naive, when the crisis is over and economic growth returns, both politicians and public opinion will want to quickly forget what happened and return to business as usual. For this reason, cooperatives and their representative structures have a small window of opportunity open in 2021 to guarantee political commitments that last beyond the crisis. Political pressure for initiatives that require immediate action are essential.

It is very appropriate, as I have already written in another publication, that the world congress of cooperatives, postponed until the end of 2021, has as its main theme the cooperative identity. In the face of the global health crisis, cooperatives have increased responsibilities towards different actors that flow from their nature as people-centered organizations and that respect ethical values and principles. The cooperative has an immediate responsibility towards its members, its common owners, to maintain the activity by providing essential goods and services to meet their needs. But in addition to this immediate responsibility, the cooperative has a responsibility to other actors and the community in general. From the outset, the cooperative has an ethical responsibility towards its workers to do everything possible to maintain their jobs, respecting their rights and privileges; the cooperative also has an important role in helping the community in which it operates in a sustainable way, which stems from the seventh cooperative principle, especially in a crisis situation such as the one we are experiencing; in addition, the cooperative has a broader responsibility towards the community at large, local, national and international, in working towards its sustainable development. Thus, it is important not to lose sight of the cooperative identity, even in times of difficulties - especially in times of difficulties - so that the cooperative discourse is not empty and can be proven by concrete and effective actions. The world congress of cooperatives must be a demonstration that the cooperative identity is not just to be talked about but is experienced in the daily life of each cooperative. This is also important in relation to the previous point, to demand concrete measures from policymakers to promote, develop and strengthen the cooperative movement, because if cooperatives fail to demonstrate that their actions are in fact useful for society, then they will not have the credibility necessary to require such measures.

The cooperative movement is well aware that economic growth should not be the only, nor the most important, yardstick for measuring social well-being. In terms of sustainable development, which encompasses the economic, social and environmental dimensions, the 2020 pandemic has also brought enormous challenges. From the outset, there is a serious deepening of inequalities at all levels and, above all, in terms of access to essential health care. In this theme, health cooperatives and, more broadly, cooperatives in the healthcare sector, play a very important role in demonstrating that a business model that respects equal opportunities and helps to achieve universal health coverage is possible. The recent decision by the Indian government to promote this cooperative model in the country reveals the openness on the part of public authorities to seriously consider this solution. Many other notable challenges arise, which will call into question the achievement of the Sustainable Development Goals approved by the UN member states, but I would like to mention here, in particular, the climate crisis.

According to a recent BBC report, 2020 was the hottest year ever, since temperatures are recorded. The number of natural disasters, uncontrollable forest fires, intense and regular hurricanes, polar meltdown, among others, has affected millions of people worldwide and is a terrible omen of things to come. This all happened despite the slowdown in economic activity caused by the pandemic, which shows that it will take a great collective effort to significantly reverse the environmental damage that humanity has been accumulating. Cooperatives have a duty and a responsibility to be at the forefront in this battle for the survival of the planet, not only with regard to their economic activities, reducing their environmental impact to carbon neutrality, but also in alerting and mobilizing members, communities and the general public.

For all these reasons, 2021 will be a year full of challenges for cooperatives. It is only based on their values and principles that cooperatives can face these challenges and remain at the forefront, presenting themselves as a solution for the future, of sustainable development.

NOTE: The views and opinions expressed in these articles are those of the author only and do not necessarily reflect the views of PromoCoop and its partners.

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