A human economy: A “third way” for the futureof young people in the Middle East and North Africa

Malak Zaalouk

© Springer Science+Business Media Dordrecht and UNESCO Institute for Lifelong Learning 2013

Abstract This paper looks at the vulnerability of today’s youth worldwide, with a

particular focus on theMiddle East and North Africa (MENA), where the proportion of

citizens aged 12–24 is particularly high at one-third of the total population. Cursedwith

poor education and fewworkopportunities, the youth unemployment rate has risen to50

per cent in this region.There is a consequent lackof participation at all levels, and a large

number of youth are showing symptoms of low self-esteem, frustration, anger and

unrest. After discussing the outcomes of years of an inhuman economic system on a

global level, this article points to a more humane and empowering path. The author

argues that, instead of continuing with profit-oriented capitalism or relying on the

informal sector, the co-operativeway represents a third alternative to existing economic

sectors within the dominant contemporary economic system. The article analyses the

many benefits of this path for the realisation of a humane economy. In so doing, it

touches on issues of equity and social protection. Finally, the article outlineswhat needs

to be done if this is to be a viable solution for a human economy. While giving many

examples of successful co-operative enterprises worldwide, the author singles out the

MENA region as one which could also benefit from the new trends outlined.

Keywords MENA · Monopoly capitalism · Economic crisis · Youth

unemployment · Co-operatives · Neo Co-operative movement · Social protection ·

Equity · Quality education · Poverty alleviation · People’s empowerment

Resume Une economie a visage humain, troisieme voie pour l’avenir des jeunes du

Moyen-Orient et d’Afrique du Nord – Cet article se penche sur la vulnerabilite de la

jeunesse mondiale d’aujourd’hui, en mettant l’accent sur la region englobant le

Moyen-Orient et l’Afrique duNord, ou la proportion de citoyens ages de 12 a 24 ans est

M. Zaalouk (&)

Middle East Institute for Higher Education, MEIHE, Graduate School of Education,

The American University in Cairo, AUC Avenue, P.O. Box 74, New Cairo 11835, Egypt

e-mail: mz@aucegypt.edu

123

Int Rev Educ

DOI 10.1007/s11159-013-9370-4

particulierement elevee, correspondant a un tiers de la population. Aggrave par un

manque de formation et une penurie d’opportunites de travail, le taux de chomage des

jeunes atteint jusqu’a 50 pour cent dans cette region. Il en decoule un manque de

participation a tous les niveaux, et de nombreux jeunes presentent les symptomes

d’une faible estime de soi, de frustration, de colere et d’agitation. Apres avoir analyse

les consequences apres plusieurs annees d’un systeme economique mondial impi-

toyable, l’auteure indique une voie plus humaine et autonomisante. Elle soutient que,

au lieu de maintenir un capitalisme axe sur le profit ou de compter sur le secteur

informel, la voie de la cooperation constitue une troisieme alternative pour les secteurs

economiques du systeme economique dominant aujourd’hui. Elle analyse les nomb-

reux avantages de cette option dans la realisation d’une economie humaine, qui ce

faisant traite des questions relatives a l’equite et a la protection sociale. Elle expose en

outre ce qui doit etre entrepris pour que cette economie humaine devienne une solution

viable. En fournissant de nombreux exemples probants d’entreprises cooperatives de

par le monde, l’auteure signale la region du Moyen-Orient et d’Afrique du Nord

comme pouvant egalement tirer profit des nouvelles tendances presentees.

صخلم

Introduction

According to a select group of economists who spearhead an initiative known as the

“alter-globalisation” movement,1 the role of economic systems is to reduce poverty

1 Although there were earlier manifestations, the beginning of the “alter-globalisation” movement is

generally associated with the convention of the first World Social Forum in Rio Grande do Sul, Brazil, in

January 2001. (Significantly, the 31st World Economic Forum was being held simultaneously in Davos,

Switzerland.) Alain Touraine (2010) observes that the alter-globalisation movement “was, and remains, a

grassroots movement in which activists from poor countries occupy a place observed in no other

movement” (ibid., pp. xii) and goes on to say: “The movement has not only been critical. In fact, it was

and is the first large social movement to have been founded less on rejection than on the assertion of the

rights of a large majority of the population. […] Beyond all specific demands, it asserted itself first and

foremost as the defender of the rights of human beings” (ibid., p. xiii).

M. Zaalouk

123

and satisfy human needs. Their position is summed up perfectly by the statement

“Humanity is the final end and there is no other measure of economic progress than

the degree to which this end is achieved” (Pleyers 2010, p. 68).

We unfortunately all know that our globalised economy has in fact managed to

do quite the opposite. It has gravitated towards what is termed “monopoly

capitalism” over the past century (Sweezy 1987; Baran 1973; Pleyers 2010). For

longer than we would like to remember, it is indeed profit that has mattered and not

people. The “Occupy Wall Street” movement is symptomatic of an increasing rift

between the rich and the poor, and a growing malaise signalling the very dangerous

path humanity is now bent on following.

The irresponsible dehumanising behaviour of a profit-oriented economic system

has not gone unopposed. In fact, many more movements besides Occupy Wall

Street have recently emerged to protest against the devastating effects neoliberal

globalisation has had on both social and environmental levels. Many economists,

including Joseph Stiglitz (2012), have pointed out how this new globalised economy

works towards destabilising societies, increasing disparity and working against the

poor. And many more have bemoaned the insufficient production of global public

goods (Golub and Marechal 2010).

The net result of this entire imbalance has manifested itself in a situation where

hundreds of millions of people have been squeezed into marginal positions and

areas of the world and are threatened with hunger and famines, disease and

ignorance. Suffering urban slum dwellers are rapidly increasing in number, as are

dispossessed peasants and unemployed men and women in addition to victims of

war, political conflict and turmoil. One has only to examine global statistics on the

distribution of resources, wealth, power and services to begin to realise the enormity

of the global tragedy now unfolding (Sutcliffe 2001).

One of the most dehumanising aspects of this new economic system is the

inability of a majority of the global population, namely youth, to participate

politically and economically in the public spheres of their societies. So much

instability and narrowing of opportunities is confronting the young people of this

world and pushing them into a “waithood” situation whereby they are forced to

continue to wait for the accordance of any of the rights they have been promised for

so long. Even when they imagine to have taken their destiny in hand by triggering

upheavals, revolutions and social movements of opposition, they seem to be

constantly rudely awakened by the fact that opportunities are no longer available to

them and that they are trapped in a situation of permanent or endemic series of

stagnations (Buckner et al. 2012).

The problem stated

Of the 185 million jobless people worldwide, nearly half are young people aged

15–24 (ILO 2012). The Middle East and North Africa (MENA) region is

particularly characterised by its very young population; the demographic average

age is significantly younger than the global average. According to some estimates,

the number of children and youth aged under 24 years is about 200 million, roughly

A human economy: A “third way” for the future

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half of an overall MENA population of 432 million in 2007 (UN-HABITAT 2012,

p. 1). It is estimated that unemployment amongst youth in the region is as high as 50

per cent. Moreover it is also estimated that in the next 15 years some 100 million

new job seekers will be eligible to enter the work force (UNICEF MENARO 2007).

The first Arab Human Development Report, entitled Creating opportunities forfuture generations (UNDP 2002), clearly delineated the relationship between

stagnant economic growth, unemployment and poverty. The report emphasised the

underlying root cause; namely the absence of human capability in terms of

education, knowledge, health, freedom and well-being. The main factor responsible

for this deprivation of human capability in the region is inadequate access to quality

education, a major social asset (UNDP 2002, 2003).

High rates of youth unemployment, school dropout and poor human capability

are compounded by a number of other complexities which render young people in

MENA countries a highly vulnerable group facing numerous risks and causing the

region to potentially forgo a huge opportunity. A number of studies on youth in the

MENA region2 indicate that they suffer from lack of participation at all levels,

accompanied by an absence of a sense of belonging. This is reflected by the large

numbers emigrating or wishing to emigrate, thus creating a substantial brain drain.

Moreover there is empirical evidence to show that when young people are

unemployed they are readily marginalised, pushed into poverty, and manifest all the

symptoms of low self-esteem, frustration, anger and unrest (UNDP 2002, 2003,

2004).

This critical youth condition is occurring in a region which has had a peculiar

political economy over time. State-led development has been prevalent throughout

the better part of the 20th century, with the state posing as the exclusive provider of

livelihoods for a long time and dominating all social, economic and political

domains. As a consequence, citizenship, freedom and democracy are not fully

developed in many instances. Patron-client relations have dominated for the most

part and access to the state mechanism largely defines access to resources, hence the

important role of public employment with its structural limitations over time and in

the face of high levels of unemployment (UNDP 2002, 2003, 2004).

Economic development has meanwhile followed an interesting pattern of

remarkable growth rates in the 1970s and early 1980s due to the import substitution

model3 followed and the oil boom. With the decline in oil prices, the shrinking

absorptive capacity of labour in the Gulf area – and consequently the decline in

remittances – many MENA countries suffered severe setbacks. This resulted in

stagnating growth rates in the Mashreq and Maghreb countries4 in the last two

decades and increased poverty. The limited absorptive capacity of the private sector

in the region is compounded by challenges of rapid population growth, the

difficulties of structural adjustment, the inefficiency of the education system and

2 See for example Assaad and Roudi Fahimi (2007), Salehi-Isfahani and Dhillon (2008), Chaaban (2009),

Roudi-Fahimi (2011), and Assaad and Salehi-Isfani (2011).3 Import substitution aims to reduce a country’s dependence on foreign imports by replacing them with

domestic production.4 The Mashreq [“place of sunrise”/”East”] countries include Egypt, Jordan, Lebanon, Palestine, Iraq and

Syria. The Maghreb [“West”] countries include Algeria, Morocco, Libya and Tunisia.

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most importantly the very dubious nature of a private sector-led export model in the

competitive trading environment of today (UNDP 2002, 2003, 2004). All of this has

been further aggravated by the volatile political situations in the region fraught with

revolutions, political upheavals, conflict, civil war and occupation.

A framework for youth social protection

Having identified young people in the MENA region as a vulnerable group in need of

protection, it might be worthwhile to examine some of the concepts, definitions and

possibilities of the new social protection approach. Generally speaking, social

protection is a policy framework addressing poverty and vulnerability. It emerged as a

response to the “safety nets” discourse of the late 1980s (Devereux and Sabates-

Wheeler 2004). Poverty is multidimensional and straddles a number of deficits.

Vulnerability as such is the probability that an individual, household or community is

in danger of slipping into poverty in the near future. The concept of vulnerability deals

with how resilient people are to livelihood shocks and dire social and economic

situations. Unemployment and thwarted access to livelihoods and/or gainful

employment qualifies as one of the major shocks which can be sudden or result

from a chronic endemic situation. It can be due to structural conditions, illness or age

factors. In general the groups needing social protection are the economically at risk,

the chronically poor and the socially vulnerable. The majority of young people in the

MENA region fit any of these categories by virtue of their human capabilities deficit

and their unemployment situation, both of which are bound to have lasting impacts on

their personal vulnerabilities and those of the generations to come.

Social protection instruments are shaped by and can be classified in accordance

with the vision adopted and the definitions of risk, vulnerability, social cost and

impact (i. e. weighing efficiency against inclusion and rights-based arguments), how

far we are willing to dig into root causes and the extent to which we factor in the

issue of sustainability in any of the interventions proposed. Hence social protection

measures are viewed as spanning a continuum of three categories: (1) protective or

preventive measures; (2) promotional measures and (3) transformative measures.

(1) Protective or preventive measures usually take the shape of emergency-type

intervention against shocks requiring immediate action to help intervention-hit

populations and victims of natural disasters. All of these measures constitute

forms of social assistance. Other forms of social protection instruments in that

same category are social pensions, support of orphans and vulnerable children

(OVC), child support grants and disability grants.(2) Promotional measures are focused on livelihood and economically enhancing

transfers, such as large-scale employment creation, a classic example of which

is public works. Another example is microfinance.(3) Transformative measures are the ones that are more concerned with structural

transformations, transfer of assets, sustainable development and – most

important of all – measures that promote empowerment, rights and inclusion.

These measures are the ones that address social exclusion and economic

A human economy: A “third way” for the future

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vulnerabilities from a root causal analytical perspective. They are the measures

that seek long-term impacts and usually address the politics of poverty

reduction through policy and legal frameworks that will instil pro-poor

legislation, give the poor a voice and establish social contracts. In sum these

are measures towards long-term empowerment.

(Minujin and Delamonica 2007; Sabates-Wheeler and Haddad 2005; Samson et al.

2006)

Towards a comprehensive strategy

A comprehensive strategy of social protection for youth will need to straddle both

promotional and transformative-type measures. Through a strong empowerment

framework it will aim for quality education and employment creation of a

sustainable and long-lasting nature. With the closing down of large-scale state-led

enterprises, and the weak nature of the private sector, many employees and workers

from both public and private sectors are being forced to change their work

perspective from being salaried employees to having to create their own jobs. We

are not here talking of the informalisation of the economy and consequently the

disintegration of labour relations and deterioration of working conditions accom-

panied by the feminisation of poverty, which is particularly true of those national

entities where the state is not providing unemployment compensation or welfare

packages. What is actually needed in reality is the creation of enterprises, as

opposed to informal sector growth, enterprises that are economically viable,

democratically inclined, led by youth and which result in gainful employment,

learning and quality education.

According to those who have been calling for alternative methods of organising

economies, an economic system that claims to be humane needs to demonstrate the

following:

1. It is made and remade by people; economics should be of practical use to us all

in our daily lives.2. This means it should address a great variety of particular situations in all their

institutional complexity.3. It must be based on a more holistic conception of everyone’s needs and interests

(Hart et al. 2010, p. 5)

To these characteristics set out by Keith Hart et al. (ibid.), I would like to add two of

my own:

4. A humane economic system should be based on a legacy of what people have

ingeniously and traditionally created to survive and to meet their needs.5. It should primarily address inequalities and offer just institutions that can fulfil

democracy and empowerment, not only in the social and political spheres but

also in the economic sphere.

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What this paper is suggesting is to develop the “third way”, namely the co-operative

way as a strategy of fulfilling the exigencies of a humane economy. In so doing, the

next sections will address the following questions:

● What is the co-operative way?

● What are the guiding principles and how do they relate to human rights?

● What are the success stories and “the new generation co-operatives” (NGCs)?

● What are the historical challenges?

● Why are they well-suited to youth needs?

● What is the relationship to quality education and learning?

The co-operative way

Co-operative ideas and practices have existed from the beginning of time. In

modern times, the first wave of institutionalised co-operatives began in Britain with

the social exclusion that emerged during the industrial revolution and its aftermath.

Two examples are Robert Owen’s social welfare experiment at New Lanark in

Scotland in the 1820s and the Rochdale consumer co-operative in Lancashire,

England in 1844.

Co-operatives are economic organisations or enterprises owned and run by an

association of members according to co-operative principles for the purpose of

satisfying shared economic and social needs (Jakobsen 1995). A further elaboration

of the definition is presented by the International Co-operative Alliance (ICA):

A co-operative is an autonomous association of persons united voluntarily to

meet their common economic, social, and cultural needs and aspirations

through a jointly-owned and democratically controlled enterprise (ICA 2009).

They are enterprises that put people rather than capital at the centre of their

business. Because of this, they follow a broader set of values than those associated

purely with making a profit – namely self-help, self-responsibility, democracy,

equality, equity and solidarity. “In the tradition of their founders, co-operative

members believe in the ethical values of honesty, openness, social responsibility and

caring for others” (ibid.). Co-operatives also operate on a set of principles, which

include open membership, democratic member control, member economic partici-

pation, autonomy and independence, education, training and information for their

members, and co-operation among co-operatives and concern for community (ibid.).

The International Co-operative Alliance is a global organisation established more

than 100 years ago. It outlines some of the pertinent principles of co-operative

enterprises, namely that membership is voluntary, control is democratic and not

authoritarian or hierarchical (one member, one vote), participation in decisions

about use of economic means is based on personal membership and not on the

extent of the member’s economic involvement in the co-operative, and surplus is

distributed to members in proportion to their economic activity and not according to

A human economy: A “third way” for the future

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their individually invested capital. Moreover, a member’s investment in the co-

operative is not distributed into shares. It is a social investment. Capital invested in

the co-operative is not awarded profit as in a stock-owned enterprise. It does not

share in the surplus. Capital can be rewarded with interest which is limited and

determined by the bylaws and the general assembly. Finally, co-operatives are not

individually owned and the ownership group is related according to co-operative

principles (ICA 2012).

The guiding principles and the Millennium Development Goals

There are many aspects of the co-operative principles that perfectly match the

United Nations’ Millennium Development Goals (MDGs), many of which express a

clear concern for the eradication of poverty and an end to hunger. Interestingly, co-

operatives have been looked upon by the World Trade Organization (WTO) as part

of the solution for an economic reform. Faced with declining world farm food prices

and challenges confronting the Uruguay Round (UR),5 the MDGs and co-operative

principles join hands within a rights framework to eradicate poverty (ICA-IFFCO-

CLT 2009). In the words of Jurgen Schwettmann, head of the co-operative branch of

the International Labor Organization (ILO),

co-operatives can empower people through concerted action, create opportu-

nities through joint initiatives and enhance social protection through mutual

help. These three elements – empowerment, opportunity [including job

creation] and protection – are the key ingredients of any poverty alleviation

programme (Schwettmann 2002, p. 30).

The century-long international co-operative movement has also been celebrated by a

United Nations (UN) International Day of Co-operatives in 2012 to highlight the

values of corporate social responsibility (CSR) championed by those people-centred

enterprises. In anticipation of that day, UN Secretary-General Ban Ki-moon

declared that “Through their distinctive focus on values, cooperatives have proven

themselves a resilient and viable business model that can prosper even during

difficult times. This success has helped prevent many families and communities

from sliding into poverty” (UN 2011a). Kofi Annan, former UN Secretary-General,

had earlier already pointed to the fact that co-operatives would have an important

role to play in improving democratic governance. Annan is quoted to have said that

“Founded on the principles of private initiative, entrepreneurship and self-

employment, underpinned by the values of democracy, equality and solidarity,

the cooperative movement can help pave the way to a more just and inclusive

economic order” (OCDC 2007, p. 15). Moreover, during their long history of co-

operative activity and advocacy, the various congresses of the International Co-

5 The Uruguay Round was a meeting held at Punta del Este, Uruguay in September 1986. Launched by

ministers of member countries of the General Agreement on Tariffs and Trade (GATT), its purpose was

to conduct several multilateral trade negotiations (the first set in which developing countries played an

active role). Its outcomes were the signing of the Final Act of the Marrakesh Agreement in Morocco in

April 1994 and the birth of the World Trade Organization (WTO) in 1995.

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operative Alliance (about 33 to date)6 joined forces with the UN to promote gender

equality, the ending of any form of discrimination, human development and global

peace.

Success stories

Co-operatives have created over 100 million jobs according to most recent figures.

They help secure the livelihood of an estimated 3 billion peopleworldwide (ILO 2007;

Chavez Hertig 2009). This is estimated to be more jobs by 20 per cent than the total

number offered by all multinationals combined. Today, worldwide co-operative

membership stands at approximately one billion members, hence the co-operative

movement is on its way to becoming a force of nearly one billion; this should be

viewed as a significant part of the work sector in the world of today (ILO 2007).

Although not well publicised, the relevant literature is replete with successful

examples of co-operative enterprises worldwide in terms of membership, employ-

ment, relief aid, patronage and funding, health and social care, women’s

empowerment, and insurance, credit and banking:

Membership: In Kenya 20 per cent of the population are members of

co-operatives and 250,000 are employed by co-operatives, while in Argentina the

rate of membership is over 29 per cent. In Norway, 33 per cent of the population are

members of co-operatives, which have played a critical role in the social and

economic development of the country. In Canada and the USA, 40 per cent of the

population are members of co-operatives (ICA 2007).

Employment: Co-operatives contribute 30 per cent of gross national income

(GNI) in many instances (ibid.). In some countries they constitute the largest

employers. In Colombia, a national health co-operative is the second-largest

employer at national level. Moreover it extends lifesaving health care services to a

quarter of the population (ICA 2007; UN 2007). In Canada, the Desjardins

movement (savings and credit co-operatives) is the largest employer in the province

of Quebec (ICA 2007; UN 2007). In France, 21,000 co-operatives provide jobs to

700,000 people (ILO 2004a). In India, more than 10,000 villages benefit from

processing and marketing milk. The milk co-operative is creating what is termed a

“white revolution” in India, enabling 6.3 million producer members of the most

marginalised population to make a decent living (ICA 2007; UN 2007).

Relief aid, patronage and funding: In 2001, when an earthquake struck in Gujarat,Amul (the Gujarat Co-operative Milk Marketing federation) donated 50 million

Indian rupees to reconstruct schools (ICA 2007; UN 2007). In Canada, Desjardins

6 “The International Co-operative Alliance (ICA) was founded in London, England on 19 August 1895

during the First ICA Co-operative Congress. In attendance were delegates from co-operatives from

Argentina, Australia, Belgium, England, Denmark, France, Germany, Holland, India, Italy, Switzerland,

Serbia, and the USA. Representatives established ICA’s aims to provide information, define and defend

the Co-operative Principles and develop international trade. The ICA was one of the only international

organisations to survive both World War I and World War II. Overcoming all the political differences

between its members was extremely difficult, but the ICA survived by staying committed to peace,

democracy, and by remaining politically neutral” [retrieved 17 July 2013 from http://ica.coop/en/history-

ica].

A human economy: A “third way” for the future

123

gave 58 million Canadian dollars (CAD) in collective patronage allocations to

members in 2005, of which 42.8 per cent of surplus earnings were given back to

community as patronage allocations, sponsorships, donations and student scholar-

ships. Desjardins Venture Capital (DVC) invested CAD 159 million in new

commitments in 143 businesses and co-operatives in Quebec (ICA 2007; UN 2007).

Health and social care: In South Africa co-operatives provide care and comfort

to those living with HIV/AIDS (Somavia 2003, p. 4). Italy is home to 2,000 social

co-operatives whose contributions are the equivalent to 13 per cent of state

expenditures for the social sectors and have created 60,000 jobs for marginalised

people (ICA 2007). In Spain, the Mondragon Co-operative is regarded as the

world’s largest and most successful worker’s co-operation. It has created jobs, social

security, opportunities and community empowerment (ibid.). In the UK, The Co-

operative Group is recognised as one of the most trusted brands in England. It is

owned by its members, focuses on social inclusion, and in 2007/2008 gave 6.9 per

cent of pre-tax profit to the communities in which it exists (The Co-operative Group

2008, p. 12).

Women’s empowerment: Many co-operatives have offered good examples of

women’s empowerment, notably the Self Employed Women’s Association (SEWA)

in India, the Self Employed Women’s Union (SEWU) in South Africa7 and an ILO-

led project (in which I was personally involved) for women settlers in the South of

Egypt.8

Insurance, credit and banking: There are numerous examples of successful co-

operative banking enterprises in the world. Japan and several European countries

offer some of the most outstanding examples. The Norinchukin Bank group in Japan

is controlled by co-operatives and its total assets in 2004 were in the region of USD

576,588 million (EACB 2005). In Europe, the market shares of co-operative

banking in France are around 85 per cent and in Germany approximately 41 per cent

(ibid.). These banks are particularly important in rural areas where they provide

access to customers in regions that would not typically be served by the credit

sector. These banks have also been instrumental in financing small and medium

enterprises (SMEs). In Italy, where SMEs realise 70 per cent of the GNP, Banche

Popolari allocates 75 per cent of its total loans in favour of medium and small

enterprises (ibid.). Co-operative banking has participated widely in sustainable

development (ibid.).

The list is long and the spectrum quite wide; but the point is that all these

successful examples demonstrate there is a revival of the principle of co-operative

economic activity by what some have called the “new generation co-operatives”

(NGCs) (Merret and Walzer 1997). What this new generation actually does is to

ensure that the failures of past models of co-operative activity (mentioned in the

“Historical challenges” section below) are avoided. Speaking of agricultural co-

operatives, Hilde Frafjord Johnson, former Norwegian Minister of International

Development, succinctly summed it up: successful co-ops are farmer-controlled but

professionally managed (Johnson 2003). They maximise returns to the farmer and

7 For more information about SEWU, see Devenish and Skinner (2004).8 The ILO-led project was called: Egy/83/Mo4/Productive activities for women settlers in Upper Egypt.

M. Zaalouk

123

run tight budgets. Unsuccessful co-ops are controlled by government, maximise

benefits to politicians and staff and have slack budget controls (ibid.). NGCs

recognise the need to function efficiently in the competitive world of today and also

recognise the important contribution co-operatives can make in promoting

economies of scale and scope. Furthermore, they can also contribute to joint

investment in research and development, and foster the dissemination of technology

and market information to their members.

Historical challenges

Many co-operative organisations suffer under political constraints and the absence

of true democracy. State intrusion and monopoly situations can severely limit the

options available to such enterprises and their members. They often need to develop

the flexibility and dynamism that could protect them from market competitiveness.

Education for co-operation9 is also not sufficiently developed to ensure this kind of

enabling cultural environment.

In a number of state-led economies in the African continent, including Egypt,

Ghana, Ethiopia and Nigeria where co-operatives lacked a true voice, they were

often entirely organised and managed by state-type bureaucracies, which led to huge

inefficiencies and wastage (Develtere et al. 2008). Moreover corruption and

patronage led to the monopoly of only few beneficiaries. Meanwhile co-operative

benefits were employed to run for-profit organisations, so that enterprises which

began within the purviews of co-operative policies soon behaved like and

transformed into business-for-profit enterprises. Finally, a number of legal

frameworks and policies regarding co-operatives in those state-led economies have

not been revisited since the 1960s, rendering the task of a revival close to

impossible. The co-operatives operating in those conditions acquired a bad name

and became synonymous with poor management, corruption and state-led econo-

mies, all constituting the exact opposite of the spirit in which they were originally

conceptualised (Wanyama et al. 2008).

The revival of the co-operative movement in the MENA region will thus require

serious policy reforms and a great deal of evidence-based advocacy.

Youth needs and co-operatives

The ICA Global Youth Network was formed in 2003 and managed to bring on board

its first youth representative, Juan Carlos Mejia Cuartas. Over 100 young people

from several countries participate in the network. Its purpose is to help young co-

operators from different countries to connect and share experiences and ideas,

provide an environment and opportunity where young co-operators can learn more

about the wide co-operative movement, involve young people from outside the

9 By education for co-operation, I mean the kind of training offered to teach about co-operatives on the

one hand, but on the other hand also regular co-operative learning strategies in formal classrooms.

A human economy: A “third way” for the future

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movement through education and support, empower young co-operators to engage

with the rest of the movement to both raise the profile of youth issues and to ensure

the youth perspective is represented during discussions.

From the various surveys conducted and an analysis of the various public

statements made by youth, it is clear that many young people see the co-operative

way as the best strategy to fulfil their dreams. Surveys conducted by the Ford

foundation on college youth and the various statements emanating from the 15

youth conferences from 1969 in the UK to 2005 in Colombia indicate that young

people are clearly passionate about co-operatives for reasons that have to do with

the following:

● Co-ops put people first.

● Co-ops care about the environment in which we live.

● Co-ops value people’s right to enjoy life in a decent way.

● Co-ops provide the opportunity to see democracy in action in an environment

where people have a say in the business or organisations where they work, and

co-workers truly listen to each other’s ideas with no strict hierarchy. There is

indeed an impressive level of communication and dialogue.

● Creativity is encouraged in co-ops and there is a general feeling of being in

control and of being respected.

● Co-ops nurture a sense of belonging and the work environment reflects a

community based approach.

● Co-ops provide young people with a sense of empowerment whereby they can start

their own enterprise, participate in decision-making, acquire entrepreneurial skills.

● Co-operatives don’t just create jobs but create decent employment.10

(Chavez Hertig 2009; ICA 2011)

A study has been commissioned by the ICA and ILO British Columbia Institute for

co-operative studies (BCICS) on youth and co-operatives to examine and assess

some of the successful co-operative enterprising by youth. In addition to the features

of attraction cited by youth, other crucial benefits can be depicted. Youth co-

operative movements can, in addition to establishing democratic environments,

further enhance good citizenship through their active caring principles. A youth co-

operative movement can fill in the significant vacuums of lack of participation in the

region economically, politically and socially. Moreover it has the potential of

fostering inclusiveness and staving off the sense of youth alienation, frustration and

anger. It can furthermore support the global effort for peace, youth dialogue and

celebrating diversity. Finally, it is a huge learning opportunity, which also

reinforces quality education and the building of human capital.

10 “Decent work”, according to the ILO perspective, finds expression in worker’s feelings of value and

satisfaction, and its absence is noticeable. Decent work is about our job and future prospects, about our

working conditions, about balancing work and family life, about gender equality and equal recognition; it

is about the personal abilities to compete in the market place, about receiving a fair share of the wealth

that one has helped to create, and not being discriminated against; it is about having a voice at the

workplace and in the community (ILO 2004b).

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123

It may be fair to sum up that the co-operative sector, if well guided, nurtured and

developed, has the potential to bring about the changes necessary for a more

humane economy. Below are some of the significant ways in which co-operatives

might lead the much-needed transformation.

Co-operatives counteracting monopoly

Unlike small and medium-size enterprises (SMEs) and the informal sector

generally, co-operatives have the potential to reap the benefits of economies of

scale,11 hence they are able to resist the effects of monopoly capital. By organising

themselves and pooling their resources, farmers are able to have better access to

assets as well as better access to markets than they would on their own. This is

especially important in the case of export and the threats posed by unequal

opportunities in a globalised economy (UN 2005).

Co-operatives creating channels of mutual support and collaboration betweenthe global South and North

The co-operative movement is one of the globalised grassroots movements that

counts as globalisation from below. It is an international people’s movement that

allows for a great deal of co-operation between developed and developing countries.

The movement has already fostered much co-operation between the global North and

South through a co-op-to-co-op assistance in technical and financial matters as well

as training and transfer of know-how. One example of such co-operation is the

Swedish Co-operative Centre (SCC) supporting Zambian farmers to introduce

organic farming. The SCC holds study circles as a method of spreading the know-

how. Another example is the Canadian Co-operative Association supporting co-

operative formation in Indonesia in the financial and agricultural sectors. The CCA

offers training to the co-operative workers in Java and Sulawesi. A third example is

that of the Irish Foundation for Co-operative Development (IFCD) supporting the

Ugandan Community Development Organisation (CEDO). Finally, in numerous

countries, the International Labor Organization (ILO) provides advisory and technical

support on legal frameworks for co-operatives (Pollet and Develtere 2004).

Co-operatives as a force for development and the eradication of poverty

During the World Summit for Social Development held in Copenhagen in 1995, co-

operatives were singled out as one of the largest contributors to the eradication of

poverty. Their effectiveness was largely attributed to the fact that they are member-

owned business enterprises which facilitate the self-empowerment of the poor and

11 Originating in microeconomics, the concept of “economies of scale” refers to cost efficiency in terms

of the advantages of spreading fixed costs across more units with the increase of operational size.

A human economy: A “third way” for the future

123

other marginalised groups. Moreover co-operatives are perfectly able to foster and

organise economies of scale. Unlike small and medium-sized economic enterprises,

which are largely a creation of the informal sector, co-operatives, through

economies of scale, are easily able to attain stronger bargaining power as their

members operate in the market place. Within a co-operative structure, buyers and

sellers are less likely to be exploited than small vendors and members of the

informal sector might be. They are protected by structure and scale. Peru provides a

good example of a situation where the Central Association of Small Producers of

Organic Bananas managed to secure fair trade in the chain of economic transactions.

Thus the association’s gains and profits increased substantially in just three years,

moreover in a sustainable manner (UN 2011b).

Meanwhile there is evidence to show that in Africa, after a strong reform of co-

operatives that steered away from state control in the mid-1990s and towards more

democratisation, the co-operative sector contributed to poverty alleviation. Unlike the

informal sector,where generated incomemerely serves tomeet household consumption

needs, income generated through co-operative structures was able to enhance the

generation of more income by allowing the members to invest more in improving their

capabilities by spending on health and education requirements. InAfrica, co-operatives

have contributed to human capital formation by providing forums for education and

training. Moreover they provide opportunities to meet members’ health needs by

supporting the mobilisation of funds (Wanyama et al. 2008)

Co-operatives offering decent work opportunities

In 2004, almost one million Kenyan farmers, and four million Egyptian farmers,

earned their livelihood from membership in agricultural co-operatives (UN 2011b).

In Brazil, the Organization of Brazilian co-operatives (OCB) has been concerned

with unemployment and has thus encouraged and supported the development of co-

operatives in the fields of urban cleaning, recycling and construction (UN 2001). In

Japan, service co-operatives are engaging and organising unemployed and isolated

young mothers into “mutual help groups” to support the elderly and handicapped in

their daily lives and doing things such as shopping, cleaning and cooking for them

(ibid.). In a similar vein, in the Russian federation, “consumer co-operatives” take

care of large families and retired and disabled people by cultivating their personal

plots, selling goods at reduced prices and delivering fuel and building materials to

them (ibid.).

Resilience to crises

Being largely a result of greed, extravaganza, excessive consumerism and debt, the

recent economic crunch has impacted heavily on the global economy. But

historically, the co-operative movement has proven resilient to economic crises,

readily able to stave them off because their characteristics are in contrast to those

that brought about the crises. Some of those characteristics are:

M. Zaalouk

123

● Co-operatives are based on needs that are basic and permanent (such as

employment, production, consumption of basic goods, saving and borrowing,

housing, etc.);

● they therefore also have long-term objectives;

● they are based on ordinary citizens, who join together to solve the needs

mentioned above;

● they are rooted in the local community and do not delocalise;

● they are not for sale and thus not dependent upon the ups and downs of the

shareholders’ market;

● they are based on democratic control by members/owners, with accountability

and cross-checks; and

● they play a strong stabilising role on the markets, and the more so when co-

operatives make up a strong proportion of the economy in a given sector (e.g. 60

per cent of the banking market in France, 90 per cent of the agricultural market

in the Netherlands).

(ICA 2009)

Social justice and equality

The whole principle of co-operatives is based on the equality of shareholders.

Moreover, in situations where the poor and marginalised are unable to afford any

form of social security, co-operatives have been the solution.

In Africa there is growing evidence that co-operatives have managed to introduce

solidarity schemes to cater for unexpected expenses related to illness, social welfare,

death and other socio-economic problems (Wanyama et al. 2008). In Rwanda, Taxi-

drivers and small retailers have benefited from insurance schemes (ibid.). In Uganda

a successful co-operative was established by shoe-shiners. It started with five

members and eventually grew to a 600-member co-operative which managed to

allow the individual participants access to loans and savings (Birchall 2003). In Asia

the various examples of banking and insurance for the poor are a significant case in

point (Polat et al. 2003). A prominent example is that of the Self Employed

Women’s Association (SEWA) in India, whose insurance covers 32,000 women

workers (Devenish and Skinner 2004; UN 2005).

In Latin America there have also been examples of banking and insurance

initiatives for the poor mentioned earlier in this paper. In San Salvador, vendors of the

central municipal market have access to a credit scheme for a health fund (UN 2005).

Democratic practices fostered through co-operatives

The United States of America (USA) have provided a good example of fostering

democracy through their co-operative movement. The laws in the USA actually foster

the development of co-operatives through tax exemption as well as exemptions from

A human economy: A “third way” for the future

123

monopoly legislation. The government supports and funds co-operatives and

community credit unions. The US-American legal and regulatory environment

promotes co-operative expansion, and as a result co-operatives play a critical role in

the American economy. Meanwhile co-operatives and their associations are full

partners in the democratic process and have a say in federal and state governments as

they promote the interests of their members. The US government in addition provides

technical and legal assistance to ensure that leadership in the co-operative movement

is increasingly professional in order to ensure a rejuvenation of effective economic

practice and democracy. If any institution in the world is regarded as one that fosters

democratic practices and social justice, it is certainly the co-operative movement by

virtue of the very nature of its governance system (UN 2001).

Building on existing traditions of economic caring for human beings

As many economic anthropologists such as Marcel Mauss (1990 [1924]) and Karl

Polyani (1944) have noted, there are traditional transactions that have historically

and spontaneously grown out of human relations and needs that have shaped

economies over time in ways that are less complex than current-day capitalism, and

possibly more humane. In the perception of some, human economies do a lot more

than what is readily perceived through the dominant economic system. These

traditional modalities of exchange continue to thrive even within modern capitalist

modes of production (Laville and Pleyers 2012).

InBrazilwhat has been known as the “solidarity economy”12 has played a significant

role in fostering social justice and equity by creating a system of co-operative banks run

by government but accountable to communities and allowing for wide participation

(ibid.). In Islamic communities, the system of takaful13 has traditionally emphasised

solidarity and played the role of safety nets and protection mechanisms. In Malaysia, a

participatory form of insurance based on risk sharing and guided by co-operative

principles is able to help those in need of assistance and has proven to be a most viable

way of not only fulfilling social justice but also economic growth (UN 2011b).

Building cohesion, consensus and the co-operative movement

Co-operatives have been helpful in bringing together hostile factions of the

community. They have often managed to build consensus around common goals and

interests. In their very style of management, members are trained on consensus-

12 The “solidarity economy” is based on workers’ organisation. The movement took off in 2003. It

fosters the building of new economic and social practices based on the values of partnerships, solidarity

and justice as opposed to the private accumulation of wealth and capital. A system of banks has been

introduced which is organised by the government, but combines community currencies and microcredit in

a locally accountable and participatory way.13 Takaful is an insurance initiative based on risk sharing by customers and guided by co-operative

principles operating under Islamic law. Community members pay a regular contribution into a pooled

fund to reimburse people and companies in case of hazards and losses.

M. Zaalouk

123

building, dialogue and democratic decision-making (UN 2005). Peace-building has

been a strength of the co-operative movement. Co-operatives have often brought

people together despite their conflicts in other areas of life to set up a dialogue and

pursue common economic interests. In Rwanda, a credit union system gathered

400,000 members from different previously feuding ethnic groups (UN 2011b).

Moreover co-operatives have helped in post-disaster relief, recovery and recon-

struction. After the Banda Aceh tsunami in Indonesia in 2006, co-operatives were

instrumental in fostering numerous partnerships for the recovery period (ibid.).

Quality education, co-operatives and the learning environment

Co-operatives offer one of the best arenas for both formal and non-formal learning.

The Organization of Brazilian cooperatives has established a programme that will

teach youth in schools the benefits of co-operative systems and help them develop

their leadership skills. In Japan many co-operatives organise parenting education for

young mothers (UN 2001). Moreover the “credit and education” model which

combines microfinance services and health, nutrition, and business education into a

single service for women in poor, rural areas of the developing world has been

introduced by credit unions in a number of countries, for instance in Ghana and

Bolivia, and is significantly contributing to poverty reduction (Dunford and Denman

2001).

It is embedded in the principles of co-operatives to make learning and education

their core business. Successful global models have shown how co-operatives have

been instrumental in bringing about implicit and explicit education and learning.

Learning in those instances took place at economic, technological, organisational

and moral levels. Experience-based theories put forth by the forefathers of quality

education such as John Dewey and others were very well practised in those contexts.

In fact not only did co-operatives offer fundamental learning opportunities to their

members; they actually reserved part of their annual economic benefits for co-

operative education, setting up cultural centres and libraries, kindergartens, day-care

centres and community schools for the children (Jakobsen 1995).

For children and youth still in school, entrepreneurial skills and education can be

combined through school and university co-operatives that can later help young

people transit to the environment of work. Moreover, co-operative learning and

education as a critical component of quality education also fosters this transition to

an effective, participatory, productive and active life. These important pillars of

quality and the much-required paradigm shift will need to be supported by robust

systems that allow for homes, schools and colleges to function at their optimal

capacity. These systems will require revisiting, adequate strategic planning and

funding.

A fundamental assurance backing quality learning is the involvement and

engagement of communities in the learning of their children. It is through

community involvement that learning becomes more relevant and communities are

able to engage in what their children will learn. Moreover, through community-

based mechanisms – be they school boards, parent-teacher associations or education

A human economy: A “third way” for the future

123

committees – school accountability becomes a reality. These participatory,

decentralised mechanisms are able to monitor whether schooling meets their

objectives and ensure that their children are indeed learning. This kind of tight

relationship between school and community further eases the transition from

theoretical learning to practical life. There have been some good examples in Egypt

(Zaalouk 2004) and in sub-Saharan Africa (Miller-Grandvaux and Yoder 2002)

where community schools, guided by the surrounding community, emphasised

learning and activities around agricultural development and innovations to

beneficial effect.

Conclusion

The “third way” embodied in the co-operative movement can thus indeed be said to

be a very suitable foundation for a humane economy that can save human societies

and youth in particular from the deadlock current economic systems have landed

societies in. The co-operative movement is arguably the best method of applying the

brake on the accelerated self-destruction brought about by the excessive thirst for

profit and consumerism that has been a major feature of today’s monopoly

capitalism. To implement this change in the MENA region, two major supportive

transformations are needed. The first is in the legal and policy domain and the

second in the field of education.

To strengthen the co-operative movement, it is imperative that an enabling

legislative and policy environment allows the sector to thrive by facilitating its

growth without direct state control. Governments should be the facilitators and

development partners of co-operatives and not the bureaucratic gate-keepers as in

the past. The co-operative leadership should no longer be born out of state enterprise

but out of social and democratic entrepreneurship that will allow for autonomy and

creativity, but also very high levels of professionalism and effectiveness.

To reach those levels of efficiency, a paradigm shift in education will be

necessary to allow young people to acquire those skills that are necessary for social

entrepreneurship and leadership in a humane economy. It needs to be the kind of

education that will not force young people to comply with existing market laws and

regulations but that will allow them to question and critically deconstruct the

existing economic paradigms and replace them with others that situate the welfare

of human beings and societies above all other priorities.

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The author

Malak Zaalouk is the Founding Director of the Middle East Institute for Higher Education (MEIHE).

She is currently a Professor of Practice at the American University in Cairo Graduate School of

Education. Dr Zaalouk holds a Diploma in Educational Planning from the International Institute of

Educational Planning (IIEP) in Paris, a PhD in Social Anthropology from the University of Hull, an MA

in Sociology from the American University in Cairo and a BA in Political Science from the same

university. Dr Zaalouk lectured at university and held an Expert position for several years at the Egyptian

Nation al Research Centre. She was also engaged in a number of committees and organisations on human

rights and gender issues. Dr Zaalouk has had many years of practical engagement in development within

several of the UN agencies, amongst which ILO, UNDP, WFP, FAO, UNESCO and UNICEF. During

almost two decades Dr Zaalouk worked for UNICEF. During her last five years with UNICEF she was

responsible for guiding education in the Middle East and North Africa from the regional office in Amman.

Dr Zaalouk sits on the board of several international organisations and global publications, most

prominent amongst which is UNESCO’s annual Education for All Global Monitoring Report, and the

UNESCO Institute for Lifelong Learning. She has published a number of books, the most recent of which

is entitled The pedagogy of empowerment (American University in Cairo Press, 2004) and a number of

articles on development issues.

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