Co-operative movement: A vehicle for poverty alleviation

Since its inception in the mind 19th century at Rochdale in England, the ideals of the Co-operative Movement have taken root all over the world, and today co-operation exists in one form or another practically in every country. The first co-operative society was established on 15th August 1844 by 28 poor weavers of Rochdale with a small capital of 28 pound sterling, each contributing one pound to combat the onslaught of the power loom on the weavers of the hand loom fabric from the beginning of the industrial revolution in Europe. The society was named "The Rochdale Equitable, pioneers Society." Incidentally, according to a bulletin of the Rochdale Society, 1840s have gone down in history as the "Hungry Forties" when hundreds of people in England were certainly hungry. Strangely, that was the hey days of the vast British Empire when the British rulers and capitalists were exploiting the whole world.

Nevertheless, in a few years time the Rochdale Society phenomenally increased both its members and fund enabling it to provide social and economic security to its members. The success of the society stirred the lower strata of people in England, Germany, France, Belgium and other European countries and soon co-operative movement gained momentum internationally.

Here in the Indian sub-continent the industrial revolution in Europe in the 19th Century adversely affected the age-old hand-loom industry of our millions of craftsmen, who were rendered unemployed facing hunger, even famine in some parts of the continent by the end of the 19th century.

With the ruthless destruction of our world famous Muslin woven fabric industry by the British, even to the extent of chopping off the thumbs of the weavers, Dhaka, then one of the most prosperous cities in the world, with a population of over 200,000 was decimated to a poverty-stricken township of only 2,000 people. The booming cottage industry gave way to the mechanised British cotton industry in Manchester. As a result, the growing crisis pushed these poor to the countryside to find employment in agriculture. The then Governor General of India Lord Bentinck in the annual report of 1835 to the British Government remarked, "Today, the bones of the cotton weavers are bleaching the plains of India."

The marginal peasants also being oppressed by indigo planters and the money lenders were on the verge of revolting in some parts of British India, which alarmed the rulers. The land was too scanty for a vast population of some four hundred million, crammed in an overpopulated country. To contain the threat of an imminent peasant revolt the rulers took some initial steps by enacting necessary laws viz, Agricultural Credit Act of 1883, Land Development Credit Act of 1884, but they found it practically inadequate to solve the growing crisis. To tackle the situation the Madras government sent Frederic Nicholson, a senior civil servant, to Germany to study the management of co-operatives there. On his return, Nicholson submitted a report in 1895 suggesting formation of German Raiffesan type of village development co-operative societies, where peasants would be members of the societies with equal voting right. On the basis of the Nicholson Report, "Co-operative Credit Societies Act" was passed in 1904 and the very first co-operative societies were formed in some parts of the sub-continent as early as 1905. Incidentally, the Sylhet Co-operative Town Bank was set up on 14th February 1905, which was one of the very first co-operative societies in this part of the sub-continent. It has now 314 members with assets over Tk 5 crore.

The co-operative movement began to grow in the 19th century at a time when there was very little state or public enterprises and co-operatives were started solely as an alternative to private business or capitalism. The pioneers of the movement spoke of and planned for the day when the co-operative system of business would gradually win over so many followers, it would be in a dominant position and would then exert its influence in all fields and finally build a Co-operative Commonwealth.

Although the concept of a Co-operative Commonwealth has not been materialised as yet, the formation of the International Co-operative Alliance (ICA) in London in 1895 was a major step forward towards that goal. It emerged as the universal representative of co-operative organizations of all types, with a view to propagating co-operative principles in all countries of the world. The ICA enjoys the right of participation in meetings and work of the United Nations such as ILO, FAO and UNESCO and holds consultative status of category I in the UN Economic and Social Council.

According to a recent ICA bulletin the member organisations comprise nearly a million societies with a total membership of some 400 million. The largest proportion of membership is in consumer societies (38%), followed by thrift and credit societies (34%), agriculture (19%) and then housing, artisanal and fisheries societies. It may be mentioned that Rochdale Society today have over 45,000 members and an annual sales of over 7 million pound sterling.

In Bangladesh the number of various types of co-operative societies is reported to be 1,52,998 with a membership of 76,54,557 as of June, 1998. (according to a quarterly publication of the Co-operative Development, December 2003).

The importance of the co-operatives, as a vehicle of national development, has amply been recognised by our country by incorporating co-operatives in the Constitution of Bangladesh, under Section 13, which have it that: The people shall own or control the instruments and means of production and distribution, and the ownership shall assume the following forms: (a) State ownership, (b) Co-operative ownership, (c) Private ownership.

However, it is indeed very frustrating that while the co-operative sector was given priority over the private sector today, in fact, the private sector is getting priority over the co-operative sector, even the government sector, as more and more state owned enterprises are being privatised indiscriminately. Even the assorted and isolated Non-Government Organisations (NGO) are getting priority and preferential treatment by the government over the co-operative sector.

Further, it may be noteworthy to mention about the dismay of the British Chancellor of Exchequer Gordon Brown, popularly known as a compassionate politician towards the wellbeing of the poor in the world. Mr Brown said, "We are 150 years off our targets in tackling world poverty. He warned that global targets for reducing poverty by 2015 might not be met for the next 159 years, as he urged world leaders at a conference in London in December, 2004, to double aid to the poorest countries. He added, "If we let things slip, the millennium goals will become just another dream we once had, and we will indeed be sitting back on our sofas and watching on over TVs and, I am afraid, watching people die on our screens for the rest of our lives. We will be the generation that betrayed its own people."

Perhaps it may be relevant to say that the philosophy of the co-operative movement is that co-operatives constitute a distinct economic sector in its own right, essentially different from both capitalism and socialism, but with some features of one and certain features of the other. The adherents of this sector also believe that in the mixed economy they see co-operatives as co-existing with both private business and public enterprise and all three complementing one another could pretty well form the national economy, particularly towards the long cherished goal of poverty alleviation.

Is there any other international organisation, having the object and infrastructure to help the poor like the Co-operative Movement. Perhaps no. Then surely co-operatives are the most effective means for poverty alleviation and reducing alienation. But much depends on the attitude and political will of the government of the country concerned, as the government can help or impede sound co-operative development. Proper role of the government in the promotion and development of the co-operatives is obviously the most important. With the collapse of communism, capitalism has violently raised its ugly head to subjugate the poor and the weak of the world. The only alternative between the two extremes for the survival of the poor is the Co-operative Movement.

Nurul Islam is ex-chairman of the Sylhet Co-operative Town Bank Ltd.