Document: Co-operatives in South Africa - Their Role in Job Creation and Poverty Reduction

The Presidential Growth and Development Summit, held in July 2003, endorsed special measures to support co-operatives as part of strategies for job creation in the South African economy. Responsibility for co-operatives in government has been transferred from the Department of Agriculture to the Department of Trade and Industry, where a Co-operative Enterprise Development Division has now been established.A Co-operatives Bill, due to be passed into law in 2004, is currently under final discussion.

Against the backdrop of renewed interest in co-ops in South Africa, this paper provides a background to the issues: to the co-op principles, to the different forms of co-op that have emerged around the world, to key debates and challenges in the co-op movement, and to the track record of various forms of co-op internationally and in South Africa.

A conceptual distinction is highlighted between worker co-ops, in which workers in an enterprise own and control the co-op, and user-owned co-ops, in which the members are users of the services of the co-op, without any necessary employment relationship within the enterprise - such as co-op banks, consumer co-ops, or marketing co-ops.

The paper provides case studies of the Mondragon Co-operative in Spain, the Italian Legacoop, forms of worker-ownership emerging in response to privatization in China, and the case of popular mobilization for co-op development in Kerala State, in India: before turning to the South African experience.