It has been customary in Ethiopia that a number of combinations and unities are formed to create wealth and investment. For instance, cooperatives have helped citizens, particularly members; reduce poverty and inequality by providing economic opportunities, ensuring production continuity and supporting maintainable husbandry.
Agricultural cooperatives can play a significant role in managing the environment, securing sustainable communities and economies across the nation, region, and continent and even beyond. That is why cooperatives are widely set up and come to the forefront, be they are agricultural and non-agricultural ones, to play a crucial role in achieving sustainable development and real growth.
Taking this notion into account, The Ethiopian Herald had recently a stay with Amanuel Mathewos, an agro economist graduated from Dilla University and working for a private company as a cooperative management consultant, to gather ample information about cooperatives' role in boosting economic progress, expanding entrepreneurship and backing as well as attracting investment.
He said, "There are four tiers of cooperatives: primary cooperative, cooperative unions, cooperative federation and cooperative confederation. Their contribution to sustainable economic progress, investment and job creation is attested quite vital as they help ensure production continuity, sustainable agricultural production and wealth equality thereby improving work and quality of life by providing their respective members and employees with the opportunity to access quality education and training activities."
Apart from this move, cooperatives would also contribute a lot to the effort geared towards sustaining the environment by performing activities thereby reducing environmental pollution and protecting natural resources.
Sustainable management of the economy by supporting sustainable production and consumption, adopting sustainable technologies, such as improved seeds, organic fertilizers and smart farming practices are attributable to the success of cooperatives.
"They have to be well expanded as instruments to defeat poverty and inequality. Though cooperatives are of paramount importance in helping the society and the nation at large combat poverty, they have been facing a number of barricades in due course of smoothly running all rounded activities. These challenges include the gender gaps in employment, lack of women leadership, absence of training, shortage of research and development investments, among others," he opined.
Cooperative model of enterprise has as an intrinsic feature of forming purpose driven networks, too. The potential to impact the socio-economic transformation as cooperative networks are part and parcel of their lasting progress and change.
The impact of cooperative inter-cooperation and collaboration within the social solidarity economy and beyond is significant in terms of economic growth, investment promotion and raising entrepreneurship.
Besides, cooperative value chains add value of mutuality, with equitable income distribution as one of its outcomes. Cooperatives are prone to incongruent isomorphism due to a lack of understanding of their nature, regulatory pressures, competitive pressures on cooperative leadership, and other factors, he added.
As to Amanuel, one of the most significant aspects of Ethiopia's economy is cash flow. When a large amount of cash is flowing through a community, it can grow, create more jobs and diminish the poverty rate.
As to him, when a member of the community purchases a product or service from a business, their money flows to the business. For-profit businesses will typically take a fraction of the profit and invest it back into the enterprise to keep it running. Cooperatives all over the world continue serving the communities better, bringing more jobs, lowering poverty rates and ensuring even wealth distribution. It is strongly believed that cooperatives should work together with other citizen-run groups to create a genuinely equitable, inclusive and democratic economy.
Amanuel said, "Cooperative economic growth is possible in any environment. From rural to urban, big to small, or wealthy to impoverished, cooperative businesses can operate successfully and flourish into a critical asset of the community. Not only can all cooperatives provide citizens with a versatility of undertakings but they are also instrumental in reinvigorating eco-friendly investment."
Cooperative's intention and capacity for growth and social inclusion is also worth considering as they are well placed to promote self-help, democratic processes, and for putting economic power in the hands of marginalized populations, he added.
Yes, the path towards sustainable and inclusive development requires the concerted effort of all he said adding that there is a need for strong investment by governments, civil society and the private sector forging effective partnerships that make the most of the sector operators effective.
Cooperatives thus play a key role in health and social care, access to financial services as well as water and energy provision in rural areas across the nation.
Cooperatives have been widely benefiting the farming community, too They also support more inclusive and equal trade relations and value chains through their engagement in alternative forms of trade, such as fair trade, and contribute to a low-carbon economy through innovative approaches, he opined.
In this era when many people feel powerless to change their lives, cooperatives represent a strong, vibrant, and viable economic alternative. Cooperatives are formed to meet peoples' mutual needs. They are based on the powerful idea that together, a group of people can achieve goals that none of them could achieve alone, he said.
"Cooperatives are community-based, rooted in democracy, flexible, and have participatory involvement, which makes them well suited for economic development. The process of developing and sustaining a cooperative involves the processes of developing and promoting community spirit, identity and social organization as cooperatives play an increasingly important role in poverty reduction, facilitating job creation, economic growth and social development," he added.
In a number of ways, cooperatives play important role in global and national economic and social development.
In Ethiopia, cooperatives can provide locally needed services, employment, circulate money locally and contribute to a sense of community or social cohesion.
"The central role of cooperatives should be making an instrumental contribution to transformational move via three primary pathways, economic pathway--for alleviating poverty; stimulating economic growth; democratic pathway--for providing a framework for democratic participation and Social pathway--for building social capital and trust and bridging ethnic, religious and political divides as well as providing social services."
To capitalize on these successes, a forward looking continental and international network of researchers and practitioners is needed to bring new analytical and practical methods to the advancement of cooperative development in the global economy and dispel outmoded assumptions about cooperatives.
Besides, cooperatives can create linkages to other investment opportunities. These inclusive investment moves combine the strengths of the investor--bringing capital, technology and expertise in management and marketing--with those of local farmers who provide labor, land, traditional know-how and knowledge of local conditions, he remarked.
Cooperatives are key economic players for improving food security. The challenge is to build self-reliant organizations that operate efficiently within a market economy and contribute to improving incomes, creating employment opportunities and integrating small producers. The central characteristic of cooperatives--is crucial in attracting foreign investment.
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The cooperative form of company and entrepreneurship also needs to be an extensive use throughout the country, and the significance of cooperatives has also been proved useful in organizing other economic activities among the society, particularly within the social economy of the third sector between the private and public spheres, Amanuel said.
According to him, cooperatives are values-driven and principles-based enterprises, and therefore, sustainable development is part of their nature. These principles and values, such as equity, solidarity, democratic management and commitment to the environment, constitute a series of guidelines that value human beings over capital and are aligned with the Sustainable Development Goals (SDGs), which represent basic principles related to the environmental, political and economic challenges facing the community, among others. The main role played by cooperatives in fulfilling the SDGs has recently been recognized, and it has also been demonstrated in the economic arena that cooperatives are particularly aligned with the SDGs.
He further elucidated that cooperative firms are configured as an optimal business alternative to meet these challenges. They are business organizations whose management is designed to benefit all stakeholders.
As to Amanuel, cooperatives are organized to engender and sustain multiple benefits for the involved stakeholders and members, while contributing to local sustainable development, and they can play an important role in the implementation of sustainable development goals.
In a nutshell, cooperatives are models that incorporate a desire to serve the stakeholders in their mission. They must therefore, adopt a sustainable development strategy that can represent an effective alternative to the dominant model, capable of comprehensively responding to the socio-economic challenges of the era that prevail across the developing world in particular.
BY MENGESHA AMARE
THE ETHIOPIAN HERALD TUESDAY 7 NOVEMBER 2023
