Cooperatives – back in fashion

2012 is the International Year of Cooperatives backed by UN. It aims highlighting the contribution of cooperatives to socio-economic development, particularly their impact on poverty reduction, employment generation and social integration.

Sigh. A little bit more than 20 years ago 15 new countries were facing a challenge – what to do with the legacy of the Soviet economy – cooperatives. Due to keenness to dissociate from anything and everything related to the old Soviet regime as well as external pressure to fall in love with neoliberalism, in most of the countries cooperatives were liquidated. Though cooperatives of Soviet times slightly differed from what IYC is promoting now, the central element of ownership, employment and social inclusiveness especially in rural context was there. None of that was appealing to the political elite of that time.

Now 20 years after cooperatives are on table again. I am just trying to imagine what if the cooperatives were allowed to continue functioning and were supported? Would the rural areas of Latvia, for example, be as depressing as they are now due to lack of jobs, infrastructure, low salaries and highly competitive food production business affected by heavy influx of import goods etc? Cooperatives would improve self-sufficiency, dramatically decrease national carbon footprint (as the basic good would not need to travel from another countries to feed the rural people), ensure that more people have some stake in local economy and rural areas would be used more productively.

Actually, already in 2008 (Lietišķā diena, 22.12.2008), one of the key politicians/ economists (Mr Osis) during the early years of Latvia’s independence, claimed that farmers  in Latvia should build cooperatives. 18-20 years before this he himself played a role in liquidating these the very same cooperatives.What an irony, hm?

People make mistakes. and sooner or later also learn. now, it is probably time to learn the lesson and fix things.

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