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| ON THE OTHER HAND |
| The Co-op Solution By Antonio C. Abaya Written Sept. 28, 2004 For the Manila Standard September 30 issue We are in danger of drowning in a sea of problems and crises if we are not at the same time offered a life-raft of solutions that can save us. Sen. Aquilino Pimenel�s talk before an assembly of co-operative educators last Sept. 17, published in advance in the Sept. 15 issue of the Manila Standard, is one such life-raft that bears serious consideration. Pimentel talked about his early association with co-operativism when he was still a student at the Ateneo de Cagayan in the 1950s. The credit union that he and his friends put up then, with an initial capital of P20, has blossomed into a multi-million peso, multi-purpose co-operative beyond campus, and is now engaged in operating gas stations, land transport lines and banking and housing activities province-wide. When I was invited to give a talk to the Rotary Club of Makati (the biggest Rotary Club in Makati, with 213 members) at the Manila Pen last Sept.7 and I was asked, after reciting the usual litany of problems and crises, what could be done to make things better, I also brought up the subject of co-operatives. I told the Rotarians what I have mentioned in this space several times in the past, that during the 1992 presidential elections, I supported the candidacy of Miriam Defensor-Santiago. She had asked me to draw up her program of government, which I did, and the flagship program which I envisioned for her, which she accepted, was a program to build low-cost housing for the poorest of the poor, using battalions of student volunteers who would devote three months of the year wielding hammer and trowel to create a necessary social good for those who needed it most. At that time, Miriam was extremely popular with the young people, and I was confident that she would have attracted more volunteers than we would actually need. It would have been a positive outlet for young people�s idealism, a more worthwhile activity than throwing rocks at the US Embassy. And we were not going to stop with student volunteers. We were going to ask retired engineers and executives of construction companies to volunteer their expertise; we were going to ask the Armed Forces for the use of their engineering equipment; we were going to ask the Churches to help identify the beneficiaries of the housing. The synergy from several key sectors working together for the common good would have created a whole much larger than the sum of its parts. And the beneficiaries of the housing would not be getting charity. To pay for the housing, they would have been organized into manufacturing co-operatives to fabricate products for which there is a real demand, starting with components that would be used in the construction of the housing units themselves. I drew up a list of 42 such items, most of them imported then but which could easily be fabricated locally. This is where Sen. Pimentel and I differ. He is focused on credit unions, I wanted to focus on manufacturing co-operatives as it is manufacturing activities that create the most jobs. This ties up with my later critique of President Arroyo�s bias against manufacturing in favor of agriculture, under free trade and globalization. To repeat: one hectare of agricultural land, planted to rice or corn, cannot sustain even one family for one year. That same hectare of land, if converted into a manufacturing zone, can sustain hundreds of families. To me, this is nothing but common sense. Thailand Prime Minister Thaksin Sinawatra�s recently concluded Summit on One Village One Product suggests that he is keen to encourage manufacturing activities even in rural areas, to mop up the unemployed and the under-employed. By turning our unemployed and under-employed urban squatters into producers (living in dignified housing), we would also make them consumers, meaning they become consumers of the products and services of the capitalist sector. This widens the market base of capitalist enterprises, allowing them to expand and thus generate more taxes for the government. Everyone benefits except the purveyors of communist revolution. Is there a model for manufacturing co-operatives? There are many in Europe, if we would only stop thinking only of the American economic model. In the early 1990s I wrote a series of articles on the Mondragon group of co-operatives in the Basque region of Spain. This was founded in the mid-1950s by a group of five individuals, including a priest, and their first product was a portable stove used by campers. This was such a success that they ventured into other products. In 1990, Mondragon�s total turnover reached $4 billion, and their activities had expanded into meat-processing, publishing, supermarket chain, banking, etc and their product lines extended to car components, computer peripherals and Spain�s most popular brand (Fagor) of refrigerators, freezers, washing machines, dishwashers, etc. By coincidence, one of Mondragon�s founders, Jesus de Laraniaga, visited Manila a few months after my articles on Mondragon came out. (He came here to scout for a Southeast Asian assembly line for Fagor appliances. He eventually chose Thailand.) The Spanish ambassador invited me to dinner in his residence to meet Sr. De Laraniaga, with whom I had hours of spirited conversation, not only that evening, but the following evening as well. And since my Spanish was not much better than his English, we were provided with an interpreter (my friend Chako Molina) to facilitate discussion. Co-operatives are a way of life in Europe, especially in the Scandinavian countries, where co-ops generate up to 7% of GDP. In the Nordic countries, one can virtually go from the womb to the tomb without patronizing capitalist enterprises, if that is one�s bias, as there are co-ops for pre-natal care and there are co-ops for funeral services. In between are thousands of co-ops in practically all business fields. Mondragon and the Scandinavian co-ops, like other European co-ops, are run for profit, the profit of their member-owners. They are not operated as �service to humanity�, which is what the late Communist ideologue Renato Constantino Sr. (a business partner of mine for seven years in a publishing venture) thought they should be. Such a na�ve view stems from the Communists� aversion to the idea of �profit�, a dirty word in the Marxist lexicon, which in their minds is synonymous with �exploitation�, as pronounced in Marx�s theory of surplus value. Co-operatives, as operated in Europe, are really the economic expression of socialist values. But because of the aversion to the idea of �profit�, co-operatives were not allowed in the late, unlamented Soviet Union until Mikhail Gorbachev�s perestroika reforms in 1988, or 71 years after the Bolshevik Revolution. And even then, under strict tax supervision because of fears that they might make �too much profit� for their members. To rescue millions of people from poverty, there must be jobs available for those who want and need to work. If the capitalist sector, domestic and foreign, is reluctant to invest in the Philippines because of various reasons (most of them valid, I would say), then the next best thing is to invigorate the co-operative sector by channeling it into activities that generate the most jobs, manufacturing products for which there is a real market. Would President Arroyo consider this tack, given her bias against manufacturing? I do not know. I recall that during the first 100 days of the Ramos Government, two of FVR�s highest advisers, separately, talked to me and asked for ideas that President Ramos could adopt for his administration. I gave them the concept that I had designed for Miriam: student volunteers building housing for the poorest of the poor, who are then organized into manufacturing co-operatives to fabricate products for which there is a real demand. But FVR�s people did not show much interest in it. Perhaps, and I�m saying only �perhaps,� because under my scheme there was no room for influence peddlers to make piles of money or for crony corporations to win fat government contracts. ***** OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO Reactions to �The Co-op Solution� Mr. Abaya, I was enthralled by your article and had an about face experience with regards to co-ops. I think this is an idea whose time has come because we are in a corner with nary a place to go to for succor. However, your last paragraph clinched it all. "What is in it for the boys?" That is the often heard refrain nowadays. I am a retired US Navy Sailor who returned to the Philippines as soon as my time was up. I would have gladly given my services to such an endeavour you have painted. To date, there is now no institution more distrusted by the people than government. What an ironic mess! It will take long for the government to earn the trust because of so much bad experiences they have had. I pray that you will not lose heart and continue to come up with solutions such as these. Respectfully yours, jojo vicencio, [email protected] October o1, 2004 wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww I am with you in the belief that we must concentrate in the manufacturing of goods and services rather than agriculture, especially since we don�t really have the vast tracts of land that other countries have, and whatever we have is visited by typhoons regularly and even floods. We should however pinpoint some agriculture based products that don�t need vast lands and concentrate in the full cycle of planting, cultivating, harvesting, processing, continued researching that will make these agri products the best in the world and wanted by the rest of the world. Furthermore, we should get rid of all our tobacco farms that have no nutritional value except to contribute to cancer and death. Indeed, there are so many stupid things that we as a people do...perhaps it is because we have so polluted our land that we can no longer think straight? nonoy yulo, [email protected] October 01, 2004 wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww Hello Mr. Abaya, I am a true believer in the manufacturing sector as the only possible source of higher value added output enough to provide meaningful improvements in the income level of our large and growing population. Our agricultural sector can not grow fast enough to improve our lot and our preference for " buy and sell " trading type businesses will not yield enough margins to feed our urban or rural folks. You mention in your article a " European style " cooperative system which has helped develop these former agri based economies into the power houses they are now and lifted many of their poor. Can you direct me to detailed materials on said system for my study ? Does the Spanish or Euro center have data on this type of economic unit ? Thank you for lighting a candle on this poverty / economic development issue. Vicente T. Mills, Jr., [email protected] October 01, 2004 MY REPLY. You can get in touch with the different European embassies for information regarding co-operatives in their countries: the Spanish embassy re the Mondragon Group of Co-operatives, the Scandinavian countries for co-ops in Denmark, Norway, Sweden and Finland. The biggest co-op federation is the Kooperativa Forbundet or KF in Sweden. Switzerland also has a big co-op enterprise called Migros. wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww Hi, Tony! Am so glad to read about your interest in coops. We at Ayala Foundation have been very active in this sector for over a decade now. We helped about 16 cooperatives in Makati through technical training on accounting systems with the help of SGV Foundation and helped set up the Metro South Cooperative Bank, the only coop bank in Metro Manila and one of the largest in the country, now with over 500 primary coop members. One of the largest banks in the Netherlands is a coop bank. There is also a large one in Germany. There are a few manufacturing coops in the Philippines. I know of one run by the disabled, who manufacture school chairs and desks for DECs and other private schools. Obet Pagdanganan is also an expert on this topic. He has written a book on the topic and as you know Bulacan probably has the highest number of successful coops in the provinces. We also set up an employee coop in the Ayala Group which is now one of the largest employee coops in the country, although we are far behind the largest one, which is the coop of PLDT employees.I think they are now at a P1B asset level. Thanks for championing the cooperatives cause! Vicky Garchitorena, [email protected] October 01, 2004 MY REPLY. Glad to know that Ayala has been active in the co-op movement for over a decade. What we need is an entire raft of manufacturing co-ops to give livelihood to our poorest of the poor. Credit unions and co-op banks, as well as agri-based co-ops help, but it is manufacturing that generates the most jobs. We are a nation of 84 million people, there are literally hundreds of thousands of products that we at present import but which can be manufactured by manufacturing co-ops. The co-op movement here has to be re-invented, but to be credible, it must be led by non-trapos and non-politicians. I hope you can convince GMA to consider this tack. Organizing the poorest of the poor into ma nufacturing co-ops makes more economic and humanitarian sense than giving them food coupons. wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww The smoky mountain would have been a perfect venue for your ideas of 'housing for the poor'. Antonio Evangelista, [email protected] October 01, 2004 MY REPLY. Agreed. But, as I wrote, FVR�s people were not interested in my idea. Nothing in it for the boys, as the subsequent scandal seems to indicate. wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww One of the biggest problem we Filipinos seem to have is that for us to "import" an innovative idea, it must be American. Europe is an unknown, uncharted and no one thinks of looking in that direction for models that work in everyday life. I just read in Today, two days ago, of a low cost housing module developed by a Filipino contractor/(builder?). In fact I would be interested in using it to integrate a loft over the second kitchen as sleeping quarters for our housegirls. Do I understand correctly, that building costs of P4,000/sq.m. is a good figure? One of my favorite daydreams is that politicians might one day realize that they can make a pitch to set up NGO's -- carinderias, catering services to service baptisms, weddings and wakes so that they pay for themselves and do not depend on the politician's bounty. OK, an NGO differs from a cooperative. Still, how does one develop the idea to include modistas and outfit rental for baptismal and wedding ensembles, modular Pondas for wakes, as well as for kakanin, pulutan pancit and 'Beermunatayo!'. They would recruit their own talents, setting up kitchens to make affordable meals that make no room for Macdo and Jallabee. They would obviously be their own consumers. You wrote: � ........ By turning our unemployed and under-employed urban squatters into producers (living in dignified housing), we would also make them consumers, meaning they become consumers of the products and services of the capitalist sector. This widens the market base of capitalist enterprises, allowing them to expand and thus generate more taxes for the government. Everyone benefits except the purveyors of communist revolution. Is there a model for manufacturing co-operatives? There are many in Europe, if we would only stop thinking only of the American economic model ..... � Rica Cortes Rentzing, [email protected] Germany, October 01, 2004 wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww Mr Tony Abaya, Yes, indeed product-oriented coops should be encouraged by govt and business sectors. I was Chairman of Comm. on Coop from 1995 til 1998 and met good leaders of the sector. I noticed the majority were financial and services in nature and all bar none showed their great financial pictures. When we asked how come they did not set aside capital funds to go into product manufacturing like food, agri equipment, i was told these were high risk ventures!! At any rate, the Israeli coop does a lot of mfg of the parts of their soilless farming technology. Their fame specializing in this reached our shores many years ago, and most of the agri businesses based on soilless farming based in Tagaytay area are all Israeli- manufactured. Fact is their Embassy personnel are so versed in their manufactured products any of them can enthusiastically and effectively well. I have always hued along your line that manufacturing can absorb thousands of our men and women, as we witness the semiconductor and electronics industries. Keep writing on coops going into manufacturing. I will carry your message when I address the Annual convention of the National Coop in Bacolod on Oct. 14. Senen Bacani, former Agri Sec. of Pres. Cory is its chairman. Jun Magsaysay, [email protected] Philippine Senate October 02, 2004 wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww Your article "Co-op Solution" is interesting and thought provoking. I hope you can put your concept into a detailed and organized form and have it published as a book. It is timely, but because many people in high places are backward in their thinking, your concept becomes ahead of its time. Which is why it has to be preserved in a book, until a future Administration with enough sense can pick it and give substance to it. MARCELO L. TECSON, [email protected] October 02, 2004 MY REPLY. Thank you for your suggestion. I�ll give it some thought. wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww Mr Abaya, Many thanks for this piece. I agree with a number of things you say. Can you point me to materials I can read up on as regards cooperatives in Europe. Many thanks. Felipe Diego, [email protected] October 04, 2004 MY REPLY. The best source for literature on the European co-ops would be the European embassies, especially Spain, Sweden, Denmark, Norway, Finland, Switzerland. wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww (Letter from a Filipina in Denmark, forwarded to Tapatt by auggie surtida) Dear Auggie When I first came to Denmark, I lived in a kommune. It is a big apartment house which is rented by all of us. We were 10 people altogether. When someone vacates and there is a need to fill the room, there is first a meeting to see if the applicant for the room will be good for the whole "community" - meaning he/she will not be a pain in the neck and will contribute positively to the commune. Two of our housemates owned the apartment building. We took turns cooking and paying with our own money which at the end of the day we computed the cost per individual and we get back some money or we pay more. It was a very good system for young people who do not have much to start with, especially those still studying. When I first got my own apartment it was also a cooperative. Each apartment is "bought" from the previous tenant. The rent is very very low and includes heat. There is a board composed of the inhabitants of the building and they make decisions and take care of maintaining the building and other legal aspects. When I left the apartment, I got back what I paid for it, plus all the money I placed into it for improving the place such as new windows, a shower cabin etc. There is no profit from "selling" it. In fact I had to give back some money for the next owner to fix the kitchen floors. Now we are members of the supermarket cooperative where we can get discounts and given a dividend every year from all the groceries we bought in that supermarket. My husband belongs to a trade union also which supports him when he gets unemployed and gives the services of a lawyer for free if he has a grievance and has to fight it in court. Everything here has a coopeative - the butcher, the baker, the dairy makers, the candlestick maker, the beer breweries etc. As a cooperative, they are stronger and they can protect their own interests and protect their members also. It is a very good idea for the Philippines who can really use such a union of like interests and business and jobs to help them with their businesses and to protect them from litigations. Just letting you know that I agree fully with Abaya about cooperatives. This should happen soon or the Philippines will erupt like a volcano if we continue to let the poor people fester in their misery and despair. tina. wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww Tony, Have you brought this excellent idea forward to this Administration? Do you need any help in doing so? Peter Wallace, [email protected] October 05, 2004 OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO |