Shaping the global cooperative movement

By Sri-Edi Swasono

This is the second of two articles based on a paper presented at the First International Cooperative Alliance (ICA) Asia- Pacific Cooperative Forum in Singapore on June 27, 2000.

SINGAPORE: Globalization and the free market are rejuvenating themselves and growing anew, and have developed from being latent forces a century ago to become powerful and tangible forces at the present time.

These forces tend, however, to be of greatest benefit to the rich. The free market, with all its imperfections, has been able to steamroller everything standing in its way.

It has undoubtedly become a refuge for primordial capitalist instincts, and has been employed by global capitalists as a justification for preaching universal economic efficiency in the name of global economic prosperity.

The free market's rationale, ceteris paribus, will indeed produce optimum global economic efficiency. But why should the developing nations pay more and sacrifice so much in order to achieve such global efficiency?

The free market that has been put in place in some developing countries more often than not results in disempowerment, even impoverishment, among the poor.

In practice, as we can all see, the free market is "the market of the market dominators", that is to say those who control large amounts of capital and are thus able control the workings of the market mechanism, which Thurow referred to as "the auction mechanism". Thus, the owners of capital will emerge as the winners in the auction.

Meanwhile the poor will be reduced to being spectators to economic transactions and will have to accept their fate as price takers, or even become the economically deprived.

The only rules that apply are competition and competitiveness. The big and powerful will become the economic winners. This is what Friedman may have had in mind when he talked about the "winner-take-all market", citing economists who are concerned about economic globalization as being the spreader of global inequality. The free market has the capability of controlling the state bureaucracy.

Given such a process of globalization, the North will become richer and the South poorer. There have been no clear indications thus far that the free market can overcome poverty in the South. "The spread between the haves and the have-nots will continue to grow" (MacPherson, 2000). Patents, copyrights, intellectual property rights, all of which may be regarded as economic strengths, are controlled by and concentrated in the North.

The economy of the South is merely a dependent extension of the economy of the North. We have been witnessing the economic domination of the North over the South.

This is why many believe that a genuine free market does not exist. The market is always concomitantly polluted by distortions, including inequality in respect of both economic and noneconomic interests. These distortions also include global geopolitical conflicts.

A genuine free market will never emerge as long as politically motivated economic embargoes and economic sanctions are prevalent, a situation which is likely to continue to prevail. It is obviously misguided to believe that "the market can do no wrong".

The market must be managed or even controlled by good governance and civil society. Many have started to believe in such a managed market and refer to it as the "social-market". Thus, fair competition remains a utopian ideal.

In other words, we must stay alert as globalization and the free market, with the kind of market domination that they entail, most likely will cause disempowerment and impoverishment among the economically weak and disenfranchised.

It is our task to avoid disempowerment and impoverishment. Since its birth more than 100 years ago, the cooperative movement has aspired to empower the underprivileged.

Economic globalization and the ensuing high risk of marginalization that developing countries are faced with should become the catalyst for cooperative movements throughout the world to offer a comprehensive strategy and developmental approach which is based on cooperation and the spirit of the cooperative movement.

Competition is, admittedly, one of the global economic forces which helps to bring about progress. But it should be noted that the world has previously stopped progressing at times when free- flight liberalism has managed to spiral out of control. World War II is one example of this.

The world began to move again through international cooperation, which was achieved through the founding of the United Nations. In other words, "competition" and "cooperation" should become the world's "inseparable twin forces". We should merge these into "co-opetition," which signifies cooperation in regulating competition through cooperative schemes.

The primary instincts of our cooperatives are self-help and cooperation. We cooperate in mobilizing economic forces so as to create powerful synergies based on mutuality and brotherhood in respect of overall micro, macro, local, regional and global dimensions.

Indonesia is very fortunate in that, since its independence 55 years ago, it has been determined to provide a place for the cooperative movement in its Constitution, which provides that "the economy shall be organized as a mutual endeavor based upon the principle of brotherhood."

This is the basis upon which we define "economic democracy", an economic ideology guided by the maxim "from the people, by the people, for the people".

"Mutuality" and "brotherhood", as referred to in the Constitution, certainly do not only apply to the spirit of Indonesia's cooperative movement which is imbued with the noble social values of mutual self-help and solidarity. They also remind us that the cooperative movement is not only concerned with efforts to yield more economic added-value for the people but also sociocultural added-value.

This also implies that we have to adopt not only a "participatory development" approach, but, just as importantly, we must recognize that there can be no genuine participation without emancipation.

In this conference we should remind our cooperative movement that we are currently undergoing a process of rapid economic globalization, whose final form we are yet to see.

We should be able to participate in shaping that final form of globalization by holding out the example of a cooperative movement, which promises prosperity, mutual respect, humanism and dignity. This is a timely opportunity to make our strategic position abundantly clear.

In developed countries we see large and powerful cooperative movements and this should be a source of pride to us all. Collaboration among cooperatives should be augmented in order to protect our weaker brother cooperatives.

The larger Northern cooperatives should also be able to "go global", to develop and enter into developing countries, provide essential developmental assistance, establish joint ventures and strategic alliances and arrange for the transfer of know-how, business acumen and technology to their smaller and weaker brothers in the South.

Let us jointly formulate a unified and universal definition of cooperatives, which will allow for sufficient flexibility and adaptability in respect of local conditions, give a clearer, overall and practical description about the identity, values and basic principles of the cooperative movement and how "co-opetition" can be institutionalized and put into practice.

Only by such means can we hope to enter the global economic mainstream together, provide helpful input and steer the operative processes in the correct direction.

The last time I offered the "Triple-Co" principle to the movement as a practical way of fostering the goals of our movement. This principle refers to "co-ownership", "co- determination" and "co-responsibility" for our cooperative enterprises so that they may be facilitated in taking stakes in noncooperative enterprises. Thus we will be "everywhere".

Triple-Co offers mutuality and brotherhood. It does not involve hostile expansion or unfriendly takeovers. We should no longer stay marginalized. We need to design a global grand strategy.

Hopefully all of this will not be regarded as mere rhetoric, even though rhetoric is frequently necessary in order to energize and invigorate ideals.

Dr. Sri-Edi Swasono is a former chairman of the Indonesian Cooperative Council.