1 First East Africa Co-operative Conference 29th February – 2nd March 2016 Conference Paper Harnessing the region’s industrial potential for driving socio-economic development through the co-operative enterprise model: The People’s Ownership and Mobilization Dr. Peter Davis, CFCIPD, AFHEA Adjunct Professor in Co-operative Management Education and Development Abstract The paper first critiques the aspiration and vision contained in the conference position paper questioning the idea of industrialization and the role allocated to co-operatives in its achievement. The position paper states as follows; “The determination, participation, self-reliance and solidarity of the East African peoples and leadership are preconditions for the industrialization of the region, and hence the need to develop the critical enablers of regional transformation. This includes the continuous mobilization of the East African people and the Diaspora in various formations; employment of modern communication applications and outreach; co-operative research, innovation and development; and sustained and inclusive social dialogue on industrializing East Africa through co-operatives.” The paper questions whether the co-operative vision can be or should be contained and channeled in this direction? The paper cautions the co-operative movement in Africa not to lose sight of the global context and not to be too ready to accept the idea that economic growth as it is traditionally defined is either appropriate or desirable. The paper challenges the increasingly over-used idea of ‘sustainability’ and calls for an economics of ‘sufficiency for all’ as the best means to ensure against the threats to resource depletion, environmental degradation, climate change, and food security. The paper explores the benefits of supporting the small farmer and of enriching the rural community infrastructure and employment potential. Overall the paper argues the co-operative project is to ensure as far as possible popular ownership of wealth creation processes and resources, full employment, self-sufficiency in energy and food and an enhanced cultural and spiritual community that is both open to the best influences from the global environment but can also resist robustly the erosion of its own cultural identity and co-operative and human centered values. The paper argues that grass roots economic and social development that aims to ensure sufficiency of resources for everyone in the region can achieve the conference goals of debt reduction and dependency on foreign aid whilst at the same time raising living standards, eliminating unemployment, and insulating the regions peoples from the turbulence and instability that is so often a feature of global capitalisms boom and bust. There is also an urgent need to protect the poor against inflating food prices. The remaining sections present case studies of successful and unsuccessful co-operative enterprises and attempts to draw out key lessons for successful co-operative development; identify those barriers that arise preventing successful growth; consider the problems of inappropriate leadership and governance, and the consequences for co-operative development of ignoring the co-operative wider social and communitarian vision. Key Words Co-operation, Community, Culture, Governance, Industrialization, Management, Organization, and Sufficiency Economics. 1 2 1. Introduction 1.1 What is industrialization? A reflection on development goals, power, sustainability and justice. Past, present and future. The position paper for this conference correctly identifies the growth of co-operation with the early development of industrialization. However, co-operation at this time is best understood as a reaction against industrialization. We should not forget that this phase of British economic development was prefaced by a massive dispossession of its peoples from their traditional land; by famine and colonial expansion in Ireland; the destruction of the traditional clan land ownership and the clearances of Scottish people to be replaced by sheep owned by aristocrats in Scotland; and in England by the Enclosure Acts by which parliament forced small holders to sell their land if they could not afford to fence it. (1)This clearing out of the peasantry was an indispensible part of the Agrarian Revolution that preceded Britain’s Industrial Revolution. Industrialization helped to drive home the ascendency of the British Empire at this time but it was far from proving to be a panacea for Britain’s working people. Forced from their traditional lands in fact it actually generated unemployment and hunger. (2) The expansion of urbanization without the necessary public health infrastructure led to mortality rates worse than the worst we see in modern Africa today. In 1840s England the average life expectancy in our cities was 27 years of age. (3) Ricketts a condition affecting the development of children’s bones brought about my malnutrition was not finally eliminated from British working class children until the introduction of the welfare state by the post World War II Attlee Labour Government 1945 -1951. Today we can be equally clear that industrialization of itself will not address the issue of food security, poor housing and public health. “Industrialization is the process in which a society or country (or world) transforms itself from a primarily agricultural society into one based on the manufacturing of goods and services. Individual manual labor is often replaced by mechanized mass production and craftsmen are replaced by assembly lines.” (4) Industrialization can lead to reduced labour rates, create unemployment and hunger. The 1840s are known in British social history as the ‘hungry forties’. Today there is an the urgent need to protect the poor from the almost inevitable inflation in global food prices driven by speculation in food futures betting on population growth and the potential of climate change to harm food production leading to increasing monopolization in the global food supply chain. “The OECD-FAO Agricultural Outlook expects prices to come down again, but not to their historical levels. On average over the coming ten year period, prices in real terms of cereals, rice and oilseeds are projected to be 10% to 35% higher than in the past decade. The acute price hike adds to inflationary pressures in developed countries. Poor consumers in developing countries, and food importing developing countries overall, will have to spend an even higher share of their limited income on food.” (5) China’s rapid industrialization has been at the expense of polluting some 70% of its fresh water supply and on the back of a forced urbanization of its peasantry under conditions in which free trade unions are banned and other human rights abuses continue.(6) There is no doubting the benefits in wealth creation for the Chinese middle classes but child labour continues and the quality of life for the masses has been to exchange the hard life of the peasant for long hours at exploitative rates of pay in sweat shop factories owned by foreigners and a new class of Chinese billionaires. Power has not shifted away from the oligarchic form and civil society and economic polarization has dramatically increased whilst cultural and academic life and media continue to be tightly controlled. This is the substance of Chinas industrialization ‘miracle’ backed as it is by huge inflows of western investment. It is unlikely to say the least that industrialization in Africa aiming at supplying domestic and export 2 3 markets with cheap consumer products or products supporting industrial production can compete with China on costs without imposing similar conditions on its working people. This scenario can be avoided through the development of an alternative economic philosophy that shuns the siren calls of the western growth based model of development where technology sustains the status quo rather change it. We don’t just need a sustainable economic model – the question arises sustainable for whom – but a co-operative economics model of sufficiency where low growth but fairer growth can make a real difference to human well being for the poorest without harming our environment and eco-systems. Such an economy is based on local industry and service co-operatives focused on the goals of: a) enabling increased agricultural production for local and regional consumption yielding improved value added for the farmers and their families: b) creating rewarding wage based employment supporting agricultural supply, production, marketing and distribution: c) developing and managing clean water and irrigation management and energy production and supply: d) improved housing and health care; and e) enriching the solidarity and cultural life of the local community. The advantage of low volume local production is that it competes through local competencies in terms of enhanced quality and a better understanding of local community market needs. (7) It cannot compete on a global mass market but it can prevent dependency and dominance of local markets by cheaper imports. Its additional advantage is that it is possible to retain ownership and control in the community for the community. The wealth to sustain this development comes first in Africa’s context from the availability of land which, when properly irrigated and managed, can enable it to feed itself and export surpluses regionally and globally. Thus Agricultural Co-operatives need to support the small farmers continued ownership of the