UK: Co-ops reduce global poverty, MPs say

An influential group of MPs has urged the UK government to extend more support to co operatives in tackling global poverty.

The House of Commons International Development Committee in a new report on the private sector and development says ?co-operatives, when performing efficiently, represent a private sector model that provide many benefits and opportunities to poor people. We hope that the resurgence of interest in co operatives is not a passing fashion: co-operatives represent a cost-effective and sustainable way to support private sector development.?

MPs also praised the Department for International Development (DFID) Strategic Grant Agreement (SGA) with the co-operative movement as ?mutually beneficial, helping both partners to raise the profile of co operatives as key contributors to Private Sector Development.? The committee called for the SGA to be extended when the current Agreement expires in March 2007.

The International Development Committee is part of the Select Committee system that monitors the work of different government departments in the UK. The committee reports on the work of DFID and has members from the three main political parties in the UK.
A section of the report deals with Fair and Ethical Trade and co-operatives. More support for the Ethical Trading Initiative (ETI) which promotes decent labour standards in global supply chains was a key recommendation.

The particular role of co-operatives in public sector delivery and in making trade work for poor people was highlighted by MPs in their report. The committee states that ?Co operatives can provide an effective vehicle for the large-scale provision of public utilities, and governments planning public sector reform and privatisation projects should include co-operative enterprises amongst the private sector options.?

DFID?s 2005 grant of £50 million to rural electricity co-operatives in Bangladesh was singled out as a positive indication of the Department?s renewed commitment to the co operative sector, and MPs added that ?we anticipate similar expressions of support from DFID in the short-term future.?

Stirling Smith presented oral evidence on behalf of a consortium of co-operative organisations and was quizzed by MPs for nearly an hour. ?For the last few years we have been seeking to put co operatives back on the international development agenda. In the 1980s and 1990s, co-operatives disappeared from development and support from donors dropped off dramatically. We are turning things around and we are delighted that the committee has added its support to our case.?
?The MPs asked a series of searching questions including the role of Fair Trade, the importance of savings and credit unions in Africa, and how co-operatives could run public utilities like water or electricity, as an alternative to full scale privatisation,? Stirling Smith added. ?The work we have done over the last few years meant that I could answer with plenty of practical examples from Africa and Asia.?

www.parliament.uk/parliamentary_committees/international_development/indpsd.cfm