Co-operative News - Venezuela

Hugo Chávez's Bolivarian Revolution helped to create over 200,000 co-operatives

Anca — Wed, 06 Mar 2013 14:55:33 +0000

Following the death of Venezeula President Hugo Chávez, Co-operative News looks at how the growth of co-operatives has helped the fight against poverty . . .

While a controversial figure, the late Venezuelan President, Hugo Chávez, started the Bolivarian Revolution that led to the creation of 200,000 co-operatives.

Eager to build a new Venezuelan economy, Chávez promoted co-ops as a means to achieve social and economic change. Although the Co-operative Act had been included in the Venezuelan constitution in 1961, co-operatives were not a very popular enterprise model. When Chávez took office in 1999, a new constitution was adopted in December that required the state to "promote and protect" co-ops. At that time there were 762 legally registered co-operatives with about 20,000 members.

In 2001, a Special Law for Co-operative Associations was passed, which created a favourable environment for co-operative development, defining co-operatives as common ownership enterprises that could benefit from preferential loans and special tax allowances. This allowed co-operatives to grow from 1,000 in 2001 to over 200,000 today, according to the national supervising body for co-operatives, the National Superintendence of Cooperatives (SUNACOOP).

The government of President Chávez also promoted co-ops as a means to secure jobs for the Venezuelan people. The number of co-operatives increased from 762 in 1998 to more than 180,000 in 2007, while unemployment dropped from 14.5 percent of the total labour force in 1999 to 7.6 percent in 2009.

Policies for the benefit of co-operatives have also led to the emergence of “false co-operatives” or “co-operatives without co-operators”. Enterprises were set up as co-operatives in order to benefit from the special tax regime or governmental subsidies, without operating in accordance to co-operative values and principles. Some “false co-operatives” were employing workers for less than six months to make sure they would not have the right to become members of the co-op. Though, SUNACOOP has been active in trying to shut down co-ops that acted as companies.

According to Venezuela’s Vice President for Social Affairs, Yadira Cordova, over 20 million people have benefited from the social programmes implemented by the Venezuelan government. One of them is Misión Vuelvan Caras, a programme that offers technical training and education in agriculture, tourism and construction to create more small and medium enterprises, including co-operatives.

Once they received training, members could get funding to set up their own co-operative. However, after the initial loan, the government gave no further loans. With little training and without market experience, many of these co-ops were unable to sell their products and went bankrupt.

Some government policies sought to impose its views, rather than providing support, which delegitimised the leadership of these co-ops. The newly-created co-op enterprises were dependent upon state institutions for access to capital and sale contracts and failed to co-operate with each other.

Out of the 200,000 co-ops created during the presidency of Hugo Chávez, only seven per cent are still functioning. Critics argued that the government’s policies have generated a “culture of dependency”, with co-ops being dependent upon loans from the government.

South America’s biggest oil exporter, Venezuela is also one of the most highly urbanized countries in Latin America. Under Chavez, extreme poverty rate has decreased from 23.4 percent in 1999 to 8.5 percent in 2011, according to official government figures. However, poverty in Latin America is at its lowest level for 20 years, with other countries like Peru, Ecuador, Argentina, Uruguay and Colombia witnessing the biggest drops in poverty.

Illiteracy has also fallen whilst violent crime and inflation have increased. Venezuela has also been rated as one of the most corrupt countries in the world, according to Transparency International’s Global Corruption Index.

The government’s economic mismanagement and price-fixing have also resulted in severe food shortages of milk, eggs, beans or rice. Venezuela has also had the highest inflation in the Americas for six years running and finished the year with 27.6 percent inflation, the highest in Latin America.

Q&A: Microcredit Bank “Incorporates Women in the Benefits of Development”

AnthonyMurray — Thu, 09 Aug 2012 13:35:10 +0000

“Our raison d’etre is incorporating women in development, and especially in the benefits of development,” says Nora Castañeda, an economist who has headed the Banmujer bank in Venezuela since it was founded in 2001.

Castañeda, who describes herself as a socialist and feminist, has dedicated her life to defending women’s rights. And she continues to fight for that cause in the Banco de Desarrollo de la Mujer (Women’s Development Bank – Banmujer), which she defines as “a different kind of bank,” in the broader context of the world’s microcredit institutions.

Her lengthy career includes founding the Women’s Studies Centre at the Central University of Venezuela and coordinating the participation of the local NGOs in the Fourth World Conference on Women in Beijing, in 1995.

Banmujer, the only public bank of its kind in the world – which targets women, offering them services completely free of charge – has granted 150,000 small loans for a total of 10.7 million dollars.

Excerpts from the interview follow:

Q: What characterises Banmujer as a microcredit institution?

A: There are several kinds of microfinance institutions, but Banmujer is different from all of them, because making a profit is not our raison d’etre. But there is a more important aspect as well: incorporating women in development, and especially in the benefits of development. And you can’t do that with microcredit alone.

Q: How did the idea emerge?

A: The road to Beijing, and the conference itself, were the starting point. Women’s organisations concluded there that if something was in threat, it was the economic rights of women, and that without them, there were no human rights.

If the economic foundations of society do not change for women, especially the poorest women, there is no empowerment, and gender parity laws remain a paper promise.

Q: So microcredit is a means to an end?

A: Definitely. The bank was not set up just to grant microloans. If we merely did that, we would simply be reproducing the triple shift that women face (childcare and housework, outside employment, and community involvement), although only one of these is paid, and badly.

Incorporating women in the benefits of the economy will not just be brought about by means of microcredit, but by improving our quality of life, by strengthening family solidarity, and through work, honesty and sharing.

We started to work in that direction, with a very collective learning process, very South-South, very characteristic of our Americas. We had to learn and unlearn at the same time. There are values that are anti-values, and we had to think differently, at the risk of being seen as backwards, full of complexes, or marginalised.

Q: Could you mention an example of something you had to unlearn?

A: We had to unlearn what a bank is, because we had been told that it was a financial institution whose goal is to make a profit. We discussed the model that we wanted a great deal, and decided that we had to prioritise and focus on the poorest women, and address the feminisation of poverty.

Q: What model did that process come up with?

A: The solidarity model, based on cooperation and mutual aid. A model based on the idea that the people who manage and administer are public servers of others. It wasn’t easy, we made mistakes. Your proposals aren’t always understood from the outside; things don’t always work the way you think they will.

It’s a new path, and there has been trial and error, in practice. And there is also the very important time variable: these are slow processes, and it is hard to adapt and understand how things work.

Q: What brings women to the bank?

A: We decided that it was the bank that had to go to the women. We set up small teams of local women, with one leader, in each state.

We also established strategic alliances with organised communities, other state institutions, women’s organisations, and churches.

We go to the communities, we offer support, we ask for a simple working plan, and, first and foremost, we offer training. All of the women must attend at least three workshops, because they could receive money and not be successful in their endeavours due to reasons connected to the poverty in which they live.

Poverty cannot be fought only with money. To overcome it, you need to work with solidarity-based organisations, which can even be families themselves. Men can be involved, as long as the coordinator is a woman and men are a minority. The thing is, even in that situation, the men take charge, and the women accept it, because it is the way things usually work.

Q: What is the aim of the training?

A: We are trying to turn the women into grassroots economists; we want them to ask themselves academic-style questions, such as what to produce, how, where, when and for whom, as part of a two-way exchange of knowledge, which we all have, but not in a systematised format.

We also replace market analysis with a participative community diagnosis of the needs of the neighbourhood and community, or we carry out a cost analysis, which incorporates women as workers and sets an adequate amount of surplus value.

The aim is for people to be economists, because it is too serious a question to just leave to economists.

There is also follow-up and technical support, and it is all free of charge. That also sets us apart.

Q: How many people has Banmujer benefited?

A: Directly: about 150,000 people, 10 percent of whom were men. Behind each person there is a family with an average of five members.

Q: How does the loan process work?

A: We have managed some 467 million bolivars (10.7 million dollars at the official exchange rate) in 11 years. The support given provides ongoing results.

We have granted 150,000 loans. But this has indirectly favoured a large number of other women, as the loans have a multiplication effect in the surrounding community.

That is the aim of the workshops. Our mission is to learn, and to be recognised as something positive that is worth emulating.

Microcredit is a tool, and the cross-cutting aspect is a change of values. We told the president (Hugo Chávez): microcredit is an excuse for reaching women, and with them, through them, and for them, organising ourselves as a people. And he told me: ok, but you give them the credit (laughs).

Along the way, we decided to prioritise agriculture, including urban and peri-urban, to address two overlapping phenomena: the feminisation of the countryside and of poverty.

Q: What are the conditions of credit and payment?

A: The loans are for 48 months and are 6,000 bolivars (1,400 dollars) per person for groups of up to nine people. The interest rate ranges from zero to six percent. There are no profits – it’s non-profit, but the aim is also to be non-loss.

We are a bank subsidised by the state, which is unique in the case of women, to help meet the Millennium Development Goals (a series of development and anti-poverty targets adopted by U.N. members in 2000), including the elimination of poverty and the empowerment of women. We maximise cost savings as much as possible, so that our balance sheets never reflect a loss.

This way, the women receive more and more money. Those who pay back the loans are given a new one; that’s why they are all keen on keeping up on their payments. The women are constantly paying back their loans; sometimes instead of making the entire payment, they pay just part of it, but later on they catch up.

Collective Thinking: Zine Documenting Workers' Collectives in the Twin Cities

Joe Marraffino — Fri, 23 Sep 2011 22:21:41 +0000

"I've been working with many different volunteer collectives over the years; various Community Bike Shops, Wayward Council (a Record Store & Venue), All Ages Venues, Books for Prisoners, Food Not Bombs, a Cafe Collective, Community Info Shops, and more. All the while learning skills and trades and perfecting hobbies and crafts, and working 'real' jobs with bosses and managers and the like to make ends meet in the 'real world.'

Worker Owned businesses are functional examples of the goals many of us share; working together towards equality and freedom in the workplace and our communities that is unprecedented by any other model. Why the Twin Cities? Minnesota has a particularly vibrant history of co-ops and collectives, inlucding land and food co-ops facilitated by northern euorpean settlers in the 1800's.

I went into the Seward Community Cafe and Hard Times Cafe in Minneapolis several years ago and asked if they could produce any publicized material on how they conducted business as a collective, with the intentions of finding working models to structure future collective projects. Neither spot could provide me with the information, most of the it are in folders and stacks of old documents in the basement, and both expressed that it would be a good idea to have it available in a way that was more understandable by other like minded folks that were interested in the Collective Process and possibly starting up a collective business or few in their own communities. So I decided to be the one to do just that."

Is A Non-Exploitive Economy Based on Worker-Own Cooperatives Possible?

Joe Marraffino — Thu, 22 Sep 2011 15:17:34 +0000

Two parts of a three-part article on worker cooperatives have been posted to DailyKos by Geminijen:

Part one, Is A Non-Exploitive Economy Based on Worker-Own Cooperatives Possible?

"Anarcho-syndicalists put forward the concept of democratically run cooperatives and worker-owned and managed enterprises as a transformative economic form that could replace the rapacious capitalist system which has so brutalized and exploited workers. Based on the ideas of economic democracy and voluntary cooperation without class conflict or labor exploitation, anarchists focused on organizing from the ground up, establishing locally managed cooperatives, linked through confederations of unions, cooperatives and communities."

Part two: The Development of a Cooperative Economy in Practice

"This post (part II of the article) will compare: 1) The state sponsored model in Venezuela where funding and regulations that define cooperatives originate in the political process and 2) the Evergreen Initiative private sector model in Cleveland, Ohio which uses a network of existing industries and community nonprofits to drive cooperative development. Because of its importance as a model to the overall development of cooperative networks, we will also refer back to the Mondragon Model in Spain which was discussed generally in Part 1 and in detail in an excellent diary by T Pau.. This piece analyzes how each model deals with the major problems that are barriers to the development of a cooperative economy within a capitalist economy. The point is not to judge, at this juncture, the superiority of one model over the other, but to see how different models are affected by and operate in practice given the economic and ideological environment in which they have developed."

Part three (coming soon): The historic and current relationship between trade unions and cooperatives

Lesson's from the dark side

John Atherton — Fri, 03 Dec 2010 13:32:03 +0000

Last weekend I was asked to facilitate the Southern Consumer Co-operative Council Meeting and thought I'd do a post on my experience with the other side of the co-op movement (they'requite nice really).

So what is this meeting and why should you care? Basically it's the equivalent to our own Worker Co-operative Council (but they have 3, Northern, Midlands Southern). It is a forum for Co-operatives UK's consumer co-operative members to share knowledge and feed in to our activities.

Can we really create a co-operative economy?

John Atherton — Thu, 25 Nov 2010 17:10:42 +0000

All the talk at the moment is about public service co-ops and mutuals. How the co-operative model would be great for driving up performance, lowering costs, but at the same time keeping these new businesses accountable and lets be honest ethical.

Can we really create a co-operative economy?

AnthonyMurray — Thu, 25 Nov 2010 17:10:42 +0000

I agree with this generally and particularly if the employees get a real sense of ownership and control of their work life. But the question I'd like to ask Dave and George is: If its so great for the public services (especially in this time of budgetary constraint) why is it not a great idea for the rest of the economy and particularly those areas of high capitalism that got us into this mess in the first place?

I know a number of you must be thinking the same, in a recent SEC survey showed 2/3rds of people want more employee owned business in the private sector.

We are not the only ones who want to create a more co-operative economy either. Fidel Castro at the other end of the spectrum admits Cuba's centrally planned economy is not working and worker co-operatives should be promoted.(I find it slightly bizarre that a communist and a Conservative could agree on a economic model.)

Some people like the Basques in Mondragon and Emilia Romagna in Italy have been creating a worker co-operative economy on a regional level for years. Hugo Chavez in Venezuela is also a convert:

"When he took office, there were 762 co-ops in Venezuela with 20,000 members. Many of these were more credit unions than worker-owned cooperative work places. By mid-2006 there were 108,000 co-ops with 1.5 million members with half in the service sector and a third in production.
More information on his Bolivian Revolution here and here.

So creating a worker co-operative economy is doable, but is it doable in the England or the US?
Well some in the US are giving it a try; the steel worker union of America is looking to partner with Mondragon. There is also an experiment going on in Cleveland to create a Mondragon like network of co-operatives, the first group of co-operatives are focused around The Evergreen Co-operative.

So is it achievable in the UK and what could it look like?
Co-operatives UK is releasing a paper (more of a tomb) written by Robin Murray who was heavily involved in the formation of the fair trade movement: Twin Trading, Cafe Direct, Divine Chocolate etc. Its called Co-operation in the Age of Google,

Co-operation in the age of Google shows that we are living at a time of profound transformation. The information and communication revolution, widespread concerns about private sector greed, public sector finances and impending climate chaos present a wide range of possibilities for co-operative expansion.

Robin argues the UK Co-operative movement is not yet in a position to make the most of these opportunities. It needs to be more innovative, more integrated, more internationalist, to get better infrastructure and to find ‘the idea’ that can mobilise support for co-operation. The review proposes a series of practical initiatives for 2011 and 2012 to strengthen the co-operative sector.

Have a read and in true co-operative style add your own comments, thoughts and ideas.

Another report released by MIT in October looks at Mondragon and the Evergreen Co-operative Model case study them and then create a theoretical framework for what creating a worker co-operative economy.

"The most important lesson from Legacoop and the Mondragon is the importance of developing an economically integrated network of cooperatives rather than a single cooperative."

I've added a diagram from this report as it sums up their framework.But do have a read of that too.

We live and vote in a country run democratically and we may well soon have a public sector run in a more democratic and mutual way. Why should we not work in a business that is run in a democratic and co-operative way?

Wider Reading
Co-operation in the Age of Google (Co-operatives UK)
Sustainable Economic Democracy: Worker Cooperatives for the 21st Century (MIT Co-lab)

How oil supports Venezuela's co-op movement

admin — Fri, 27 Feb 2009 14:35:01 +0000

Elected on the promise of equitably redistributing the country’s massive oil wealth across the population, his administration has been undermined by allegations of corruption within the state-owned oil company, Petroleos de Venezuela (PDVSA), and of the failure to deliver on his promise to redraw the country’s social and economic map.

There is also concern about his military past and his dictatorial style of governance, which includes ruling by decree.