Is something big about to happen or is this a pendulum effect, and how can co-operatives help?

The world needs co-operatives, including its closely aligned mutuals and societies, more than ever.

“Global anxiety” is probably about the best description of all that seems to be going on right now. The world is experiencing extraordinary weather patterns and climate change, severe droughts, unprecedented cyclones and floods, conflict and terrorism, and worsening cyber-attacks on individuals and businesses. We have a global refugee crisis, humanitarian crises in Syria, Yemen and Myanmar, various conflicts plus the threat of large scale war between USA and North Korea. Fires are destroying thousands of homes in California and other parts of the world including Spain and Portugal. We have more destructive earthquakes and worsening pollution that threatens life on land and at sea.

Climate change has become a huge threat. It is affecting our water quality while the risks are incalculable. Fresh water is now the new oil as the world faces an imminent water crisis, without it humanity is condemned. We are now experiencing gradually rising temperatures and more extreme weather patterns – one consequence being more frequent and heavy rainfall resulting in increased levels of sediments, nutrients and other pollutants in our waterways. In addition, the race between human survival and our melting ice is now on.

To make matters worse, there is political unrest in countries that include New Zealand’s strong, longstanding trading partners. These include the USA (since the Trump administration), UK (since Brexit), and parts of Europe (including Spain). Global economies are failing to deliver secure jobs, sufficient housing and rising living standards. We’re unable to meet the basic needs of our planet’s current 7.6 billion inhabitants, a figure expected to grow to 9.7 billion by 2050.

I think that many of us can feel that something big (and bad) is about to happen globally. Some are talking about the next global financial crisis, others nuclear war. Alternatively there is no doubt that the collation of everything listed above has created a pendulum effect on the world and its sustainability, a pendulum that is already highly significant and only gaining in momentum.

While NZ is partially protected by its geographic isolation, some of the aforementioned forces have already begun to impact – flooding, droughts, cyber-attacks and the USA’s recent withdrawal from the Trans-Pacific Partnership being good examples. One of our strengths, however, has always been our highly co-operative economy involving member (as opposed to investor) ownership, organisations giving back to local communities and to New Zealanders as people, and profits being retained locally. Enduring businesses, large and small, that have been around for decades – and some for over a century – with trusted brands, products and services, stable employment and with an ultimate focus on achieving economic, environmental and social sustainability.

There is no doubt that the world needs to be operating within strong  co-operative principles.  These were formed way back in 1844 when the co-operative movement began in Rochdale, England. Today we live in a world riven by conflict and spurred on by ego and greed. Never has the time been more important to re-state our commitment to the UN Charter, the third clause of which states its aim: “To achieve international co-operation in solving international problems”. Whether it’s Donald Trump or Kim Jong-Un – macho posturing needs to give way to calm, rational co-operation.

The co-operative business model, with its quest for true economic, environmental and social sustainability, is the most closely aligned towards supporting the UN in its quest to meet 17  Sustainable Development Goals  by 2030. Across the world co-operatives play a strong, leading role in economic and social development, protecting our environment, responsible production and consumption, driving gender equalities, empowering women and bringing communities together. There are now over a billion people worldwide who are members of co-operatives. That means almost one in eight inhabitants on our planet can think and act co-operatively and in support of the UN’s 17 SDG’s. Perhaps there is hope yet…

Here in NZ, we currently have around one-fifth of our GDP generated by co-operatives – our country ranks among the most co-operative economies in the world. As a nation, we are hampered by a relatively small local market, higher labour costs and increased costs in getting our products to overseas markets. However, we have been able to compete successfully with our exports for over 170 years by being both innovative and collaborative, the latter being a key co-operative principle known as “Co-operation Amongst Co-operatives”.

As part of my role, I have the privilege of meeting many entrepreneurs and those trying to start up their own businesses. Invariably, these people wish to express their creativity, serve their community, meet people’s needs, and create an income for themselves and jobs for others. Their inspiration is often closer to the pragmatic principles of the co-operative movement than it is to the abstract ideology of someone like Milton Friedman. Co-operative start-ups are more robust than other forms of business start-up – more than five times as likely to still be in operation five years later in the USA, and more than twice as likely in the UK. I would suggest NZ is probably somewhere in between.

In terms of established co-operatives here in NZ, we do not see many going under. It is quite the opposite: of our 62 current Full Members (including many of NZ’s largest organisations), two-thirds are now more than 25 years old while five have been operating successfully for over a century. Stable employers which provide job security and decent work conditions, both key social factors within NZ society.

So, to summarise, I am sure that most of us in the civilized world will be sensing some form of global anxiety right now. We wonder whether there really is something big about to happen, otherwise a continued gain in momentum of a pendulum that is counting down. Co-operatives (including mutuals and societies) provide a business model that is all about member ownership, endurance and sustainability. This is exactly what the world needs right now as demands on its resources, let alone the behaviour of many of its inhabitants, have almost become unmanageable. Each of us here in NZ, despite our small scale and geographical remoteness, has a role to play in supporting the UN’s 17 SDG’s as we can all become true co-operators in helping to save the planet for our future generations.

Craig Presland

CEO, Cooperative Business NZ

October 2017.