From strength to strength at Bali’s Kubu Gunung Credit Union

Indonesia with a population of two hundred and forty five million is a middle-income country that is showing strong economic growth. Such growth is evident from the sight of an endless stream of motorcycles on the streets, which used to be bicycles a decade or so ago. Motorcycles have become the main vehicular means of the lower end of middle-income earners. My second visit to the island of Bali after just over a year shows caterpillars and cranes still actively working, as new industrial buildings and rows of shops are being built along the Sunset Boulevard.

Against this backdrop one could also witness hard working Balinese folks sustaining rice production in rural rice fields and terraces, as well as in the booming informal sector in urban sites. These people are the ones still left behind by capital-rich entrepreneurs who are coming from other regions of Indonesia to set up business in this famous and flourishing island.

I had the opportunity to revisit the Kubu Gunung Credit Union. This credit union started with just 15 people in a retreat house in 1991 and its current 4700 members decided to build their own office-cum-training centre at the periphery of Denpasar (the Capital City of Bali). Members, under the innovative leadership of Frans Supriyanto – founder of this credit union – would simply like to show the world what low-income people could achieve if they all work together in tandem from the ground up. The new Kubu Gunung Credit Union Centre, which I had the pleasure of visiting and opening a year ago, has now developed into an impressive facility that equals a modern office – cum – minimalist hotel that one can find in any modern city. During my visit last year it was still a half finished building full of bricks, sand and stones; it has now been magically transformed into such a modern facility.

However, while impressive, the most important thing is not the material or physical growth of Kubu Gunung credit union itself but more significant is the innovative way by which low-income and poor members are being served to fulfil both their financial and household needs. Training and education are indispensable in their sustainability programs, so as to inculcate the habit of thrift, and hence members are able to save regularly and borrow responsibly.

Yet Kubu Gunung Credit Union has not stopped at simply providing training and education, or at intensifying savings and loans services to their members, it has also ventured innovatively into forming Consumer Co-operatives (called Consumer Union) by loaning out and investing some funds into this new and independent co-operative venture as a stakeholder. Such investment is done without adversely affecting the liquidity needs of the credit union.

Kubu Gunung does not stop at just helping low income members in the urban area. In collaboration with a credit union-linked foundation they build greenhouses as demonstration plots to teach farmers how to grow high quality vegetables and cut flowers. Farmers then borrow from their credit union to buy good seeds produced in these greenhouses in order to plant vegetables and flowers in their own backyards. This horticultural effort is meant to increase farmers’ production, hence income, backed by the Consumer Union which does the marketing and sales activities.

This is a truly holistic approach in co-operative development from the ground up, which resists instantaneous results and instead opts for more long- term sustainability of farmers and other credit union and consumer union members. While challenges abound, innovation continues to be created alongside intensive supervision, so as to provide stable, sustainable, beneficial and meaningful services to members.

A great visit …

Positive coop actions crowned by a unique moment

My travels in the last few weeks have taken me to Edinburgh -Scotland, Guaruja – Brazil, Rome/Vatican – Italy, Cardiff – Wales and London. Very different events but all inspiring cooperative actions that endorse our model of enterprise. The crowning event was a private audience in the Vatican. Read on …
Just attended another lively, energetic and stimulating Conference of the Americas Region of the International Co-operative Alliance.  Co-ops from the US and Canada as well as central and southern Americas descended on Guaruja in Brazil for a packed few days with much discussion on how to implement the Blueprint for a Co-operative Decade regionally and nationally. Much has been said recently of the coming political and economic influence of Brazil, and probably not enough of the strength of its co-operative economy which is already very significant. Recognised as a huge player in pulling millions of Brazilian peasant farmers out of poverty, the co-operative sector is also very strong in health care providing local clinics and hospital services already for one third of all Brazilian citizens through Unimed Brazil, arguably the largest  healthcare co-operative in the world.
I had the chance to test the service on offer to local people in Guaruja as a mix of airplanes and a head cold had left me without hearing in my left ear. I joined other patients queuing in a well run, busy and efficient clinic and was seen and sorted quickly by one of the many doctors on duty. Excellent care and great service – could be a good model for others to follow!
4am start on way to Rome for a busy day – first stop from the airport is the Head Office of the United Nations Food and Agriculture Organisation (FAO). Since the reforms of the International Co-operative Alliance that were introduced by the global Board four years ago, we have been carefully building strategic relations with those global bodies that can help us to build our world family, and whose mission is aligned with ours.   The FAO is one and an important one. At a meeting with the Director General José Graziano da Silva, we signed a Memorandum of Understanding between our two organisations with the aim of working together on some of the world’s key challenges in particular the need to feed Africa where, despite the improvements of poverty indicators in Asia and South America, poverty still continues to grow! Now we will seek to put some action behind the words and start to pull together real projects using the expertise of our movement in grass roots agriculture and community finance, and the FAO’s technical expertise in training and support. Watch this space!
Read a press report – Wall Street Journal
And then to the Vatican …
 Audience with Pope Francisco

I had a unique and precious moment in Rome when, together with our Director General Charles Gould and colleagues from the Americas Region, I met His Holiness Pope Francisco. It’s true to say that we were all mightily impressed with The Pope’s intimate knowledge and understanding of our movement. All alone with no staff or advisers and not a note or briefing paper to be seen, he spoke our  co-operative language during a 45 minute informal discussion. Stopping once with a laugh to apologise for giving us a sermon, the Pope argued that global leaders need to understand that co-ops are not just something for moments of crisis, but the way in which economic life should go in the future. We were delighted and came away with a strong sense of a man with no interest in the vanities of life, but one in a hurry to improve the lot of his fellow man – a true world leader. We also came away with an invitation for the global movement to take part in his Commission on Peace and Social Justice!

Full report

And Scotland, Wales and London

… if you are in Cape Town next week for our Global Meeting give me a wave  and we will try and meet to tell you about the Coop Party, Social Enterprises and Cooperative and Community Finance.

Memories and future plans

My recent trip to Malta invoked fond childhood memories and family connections. The visit, hosted by Koperattivi Malta, gave me the opportunity to view some of the latest infrastructure improvements and to have discussions with the recently elected Labour Party Government ministers about the development of the cooperative business model in Malta. The cooperatives that I visited expressed the diversity of the local cooperative economy and along with the cultural and heritage projects (often partly funded by the European Union) displayed a certain confidence in dealing with the current economic storms.  More than 5000 people are provided employment by cooperatives, a fact  being recognised by the government as a significant contribution to the island’s economy.

- the preferred mode of transport for seeing the Grand Harbour

A Dghajsa – the preferred mode of transport for seeing the Grand Harbour

. The trip on the traditional Dghajsa  boat (operated by a cooperative – Koperattiva tal-Barklorie) around the Grand Harbour slipped us back in time momentarily but the towering cruise liner brought today’s reality sharply back in focus. The visiting tourists are well serviced by cooperatives operating coach and minibus services.

2013-09-23 10.47.44

Koperattivi Malta briefed me on the other sectors of the cooperative economy and with the plans to establish some new cooperative enterprises particularly in the services industry whilst looking for ways to improve the fortunes of the more traditional agricultural and fisheries coops. Cooperators were full of ideas for new coops and ways of promoting the values and principles of cooperation. Malta intends to play a full part in bringing the ICA Blueprint for the coming decade into practice with new legislation and exciting promotional and networking opportunities.

A great visit and a joy to indulge in traditional Maltese food and hospitality.   Grazzi! to Koperattivi Malta.

More news and photos on the Koperattivi Malta facebook page

The empowerment of people …

I have recently completed an interview for the United Nations Social Development Network web page on my opinion about empowerment and social issues. Here is my answer to their first question:

From your perspective, what would empowerment of people mean in practical terms?

Empowerment to me is about allowing each individual to strive to reach their potential without discrimination on the basis of gender, race, religion, sexuality or physical impairment.  It is about a cultural, social and legislative environment that encourages tolerance and a greater understanding of those things that human beings share, rather than what divides them.  It is about the state understanding that its role is to steward, promote and support rather than to dictate, enforce and punish.

The empowerment of people provides the most challenging but exciting way of finding a better balanced, sustainable future for mankind that is built on the power of a shared future and not on the power of elites.  In practical terms sadly it requires generations to secure a change in culture and an understanding that the politics and institutionalist statism of the last two centuries need to change, in a world of technological innovation and access to information on an unprecedented scale.

Look out for the complete interview to be posted on UN Social Development Network web page soon.

What do you think about the empowerment of people? Give your opinion of  ” … what would empowerment of people mean in practical terms?” in the comments below.

Young Cooperators in Action – saving for living!

As well as fisheries, whilst in Indonesia I had a particular treat in seeing some of the initiatives being driven by a group of great young co-op activists at the Kubu Gunung Credit Union.  They invited me to the site of their new building which is just being built.  They had a real party mood going with great traditional Indonesian music and dancing, local food, a presentation and lots of young men and women!
Kubu Gunung Credit Union in Bali, similar to 980 others throughout Indonesia, has been a self-sufficient and self-reliant co-operative without any intervention and financial support from the government. Their assets are a mere US $ 20 Million, but with savings coming from economically weak members they managed to serve around 4,800 members and still continue to grow.
Alongside Kubu Gunung CU, a Consumer Co-operative (called “CUNION”) has also been established from the ground up earlier this year with a multi-stakeholder concept. Both local consumers and producers are key stakeholders in the co-op, and with a number of credit unions in Bali who used some of their excess liquidity to provide a loan to CUNION, they helped to build the infrastructure. Frans Suprianto is the dynamic young leader, who
together with an equally dynamic youth co-op activist Suroto, managed to form the National Consumer Co-operative League of Indonesia.
The history of the movement isn’t forgotten here!’

Fishing for a living!

Indonesian fishery co-ops were in the spotlight this week as the ICA’s business sector for fishing (ICFO) met in Surabaya, the country’s second largest city. Co-ops from 15 countries met for the 3rd World Fisheries Cooperative Day to pass a declaration to kickstart new growth in the light of the ‘Blueprint for Cooperative Decade’.

I had the chance to see what that could mean for local traditional longline fishermen at the Kedonganan  Fisheries Co-op in Mina Segara, Bali.


Pauline Green with I. Wayan Wenda (L), Chairman of Kedonganan  Fisheries Co-op and Robbie Tullis (R)

It was shameful to hear that these men who take out their small narrow hulled boats single-handed from 8 am to 5 or 6 pm each day get just 50 US cents per kilogram for sardines caught and four US dollars for each kilogram of yellowfin tuna from their private sector middlemen buyers. It is impossible for them to lift their families out of poverty.

Oh for a cooperative supply chain or some coop to coop trading!

From small villages to global enterprise, India provides inspiration

Following a trip to India last month, ICA President Dame Pauline Green writes about the significance of co-operatives in the country and how one of its largest co-operatives builds on the influence of co-operator and social reformer Robert Owen . . .

This blog first appeared on the International Co-operative Alliance website.

India is now getting used to being something other than just a ‘developing’ country, as its economy continues to grow at rates significantly greater than those of the mature Western economies — an average of 7.6% between 2002 and 2007, and of 8.2% for the four years 2007 to 2011.

So what of its huge co-operative sector?

The largest co-operative country by numbers of primary co-ops at just over 610,000, with 98% of Indian villages covered by co-operatives that are active in a vast range of economic activities, the Indian movement represents one quarter of the worlds one billion individual co-operative members!

A three-day visit can only touch the surface of understanding just what that means for the future of co-operation in this vast, teeming, energetic and young country as it starts to lift itself into a better future.

The ICA has had an Asia Pacific office in New Delhi now for over 50 years and this was the starting place for my visit. Its key aim was to recognise the growing influence of the Indian political and economic leadership in the global economy, and the role of the leadership of the Indian co-operative movement in helping to develop its representative role, not just its traditional work on behalf of Indian co-operatives, but more particularly now on global issues as well.

The office visit was also a rare and valuable chance to visit with the staff of the New Delhi office, and I was able to see the way in which a significant tranche of the historical archive of the ICA (recently transferred from Geneva) is now housed and being catalogued in the library facility. Ultimately, the catalogue will be made available for worldwide researchers, whilst we continue to find ways to digitize as much as possible.

The Indian Farmers Fertiliser Cooperative (IFFCO) has been a strong supporter of the work of the ICA and the international movement particularly during the last decade. Started in 1967 with 59 co-operative members, IFFCO now has nearly 40,000 primary co-ops grouping 55 million farmer members, and a turnover in 2011-12 of over USD 4.5 billion. The largest fertiliser production business in India by far, it now has five major manufacturing units in India, and significant investment in fertiliser production in Dubai, Oman, Jordan, Senegal and recently Peru and Canada.

Is this just big business? Not a bit of it.

What really encouraged me was the detailed, planned and utter focus of management and staff on trying to take a business with a traditional heavy energy and waste water discharge, and take down those levels year on year, and at the same time encourage the use of non chemical fertiliser amongst its farmer membership through its ‘Save Our Soil’ campaign. Whilst that campaign started relatively recently, at a meeting I attended of a primary co-op in the village of Isanpur Mota in Gujarat, it is clear that the farmers had a very good understanding of the issues, and their need to protect their soil. Whatsmore, they were using their collective initiative to go further and develop a bio-digester and other organic fertiliser alternatives themselves, and by the way, the Chairman of the co-op showed me round the soon to be finished building that will become a shopping unit to bring consumer goods to the village. This is grass roots co-operation at its best and I was inspired.

One of the most powerful moments was to visit the IFFCO township. I was struck by the strong resonance with the work of social reformer Robert Owen’s  New Lanark, as I saw the homes built to house the workers at the original manufacturing plant in Kalol, Gujarat, some four kilometres away. Incidentally, those workers of the enlarged workforce not now able to be housed by IFFCO are given a 25% (of salary) housing allowance to find suitable local housing. The township had a shopping mall, a four bed hospital unit with doctors and nurses in attendance each day, a school, multiple play and recreation areas, a post office and bank, a small Hindu temple for worshippers, and a small facility where retired family members of workers could meet to avoid loneliness and alienation. The three gentlemen present when I visited told me that the Managing Director of the site visited them about once a fortnight to chat and see how they were.

So was this a one off, built when the co-operative was new in the 1970s and started as some idealistic dream?

No, the same provisions have been provided at all five manufacturing units — just as every floor of the head office in New Delhi has exercise bicycles somewhere along the corridor! When you travel the streets of India and see the levels of housing deprivation, poverty and need that still waits to be tackled, it is very easy to see how unusual IFFCO is and why people are so loyal and keen to do a very good job.

The last day in New Delhi was a public holiday, but despite that, the long-standing national member of the ICA in India, the National Cooperative Union of India (NCUI) brought together about 70 people including many of its governing council and the leaders of many of its state co-operative federations and business sectors to talk to me and the Secretary for Agriculture and Cooperatives from the Indian Government Mr Dilip Singh.

The NCUI has a major education and training arm and provides key traditional trade association services to this huge movement, and produced the excellent ‘Indian Cooperative Movement A Statistical Profile’ from which some of the statistics in this short article were taken. It was a unique opportunity to spend a couple of hours listening to just what they do and what their concerns are. What was very clear is that they know that they have some great challenges and some huge opportunities in the coming decades. They worry about the relationship with government, about some poor governance, a growing lack of knowledge about the value of co-operatives, the need for more co-op to co-op business, whether they can fund development — all this sounds very familiar? They can take heart that these are the worldwide issues that dominate the co-operative movement and that led us to come together in 2012, the International Year of Co-operatives, and develop the Blueprint for a Co-operative Decade.

Am I confident that the Indian co-operative movement will continue to flourish in the new economic order? Yes, but there are some fundamental concepts that will make it much less painful as the need to embrace change becomes more evident — the most crucial is that they work together. This was also one of the challenges that they raised with me.

The NCUI has just negotiated a ground-breaking change in the Indian co-operative law to enshrine the right to form a co-operative as a fundamental right of Indian citizens. If they are to make the most of this great opportunity, then confronting the competing interests of the sovereignty of an individual co-operative enterprise, with the need to lift their collective eyes to the big picture in a maturing domestic economy in a global market, will become paramount. I have every confidence that they will do so.