Hon Chairperson, members of the executive and hon members, for the most part, the rural and peri-urban population constitutes a large part of the informal economy. As such, they are generally on the lower receiving end of social, economic and political development. This is where co-operatives fit in as they have the potential to significantly aid these communities in finding solutions, mediating poverty, and making use of their own available resources, strengths, skills, and knowledge. They have the potential to empower people to improve their quality of life, and enhance their economic opportunities through self-help.
Rural community development ought to be tailored so as to maintain the unique linkages with and values in the community. Therefore, co-operatives are an ideal empowerment tool for the poor, simply for their democratic nature, amongst other things. However, they are not a new concept, which is why we need to interrogate their apparent failure, thus far, to create employment, generate income and eradicate poverty.
In the South African context, the history of co-operatives dates as far back as 1892, but their effects are almost nonexistent. Amongst other things, co-operatives have often failed because of problems with holding management accountable to members. This is because of a lack of management expertise and knowledge, and to some extent, lack of capital resources.
Elsewhere, there have been records of successful co-operatives continuing to have a lasting impact and becoming sustainable. I suppose this is partly the reason we have not given up on the idea of co-operatives. We need to study the success of food-processing co-operatives in Argentina, Brazil and India. As we do that, we must also know that government policies are critical, as they can either enhance or constrain co-operative development.
Co-operatives, for instance in the United States, play an increasing role in influencing agricultural policies. There are many issues to be interrogated if we are to use co-operatives to grow sustainable businesses. There is a big role to be played by government in ensuring the success of co-operatives without being paternalistic in approach. If there is consensus that co-operatives are or have the potential of accelerating sustainability of livelihoods, especially for rural communities, then government must invest in infrastructural facilities like regular and stable electricity, accessible roads, water, and so forth.
The UCDP feels that the co-operatives are the only way to go in order to enhance the quality of lives of our people. I thank you.