Venezuela's Co-op Boom
Tuesday, May 22, 2007
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By: Michael Fox - Yes! Magazine
Estrella Ramirez learned to read, and then to run
a business with the help of Venezuelas new
literacy and job training missions. She and
some of her co-workers started Manos Amigas, a
co-op that makes uniforms. Photo by Michael Fox.
When Estrella Ramirezs 14-year-old son signed
her up to participate in the governments free
literacy program, Mission Robinson, she
reluctantly agreed. Ramirez, who lives in the
poor western Caracas neighborhood of Catia, lost
her right arm in 1991 from an arterial
thrombosis. Six years later, her husband left
her, leaving her to raise her young children
alone. She looked for work but couldnt find a
job. I lived locked in my house with my
children, and I maintained my children sometimes
selling coffee at the hospital, making lunches, she says.
Three months after ramirez started the literacy
program, her teacher enrolled her in the
governments new cooperative job-training program, Vuelvan Caras (About Face).
I thought they wouldnt accept me or put up with
me, Ramirez says. Theres discrimination.
Youre treated as if you are useless, a cripple.
Ramirez began the year-long Vuelvan Caras
industrial sewing course in spring 2004 with a
group of other unemployed women from her
community. Some, like Ramirez, were also offered
scholarships so they could study and still care for their children.
Three years later, Ramirez is a co-founder and
associate of the textile cooperative, Manos
Amigas (Friendly Hands). She is also, according
to former cooperative president, Maria Ortiz,
one of the hardest workers of the 15-person outfit.
Ramirez formed Manos Amigas with her fellow
Vuelvan Caras graduates shortly after finishing
the program. They received an $80,000
zero-interest loan from the Venezuelan National
Institute for Small and Medium Industry to buy 20
sewing machines and purchase their first
materials. The government provided a prime
locationfree of chargefrom which to run their
cooperative, in a rundown building in downtown
Caracas. They invested part of their loan in
fixing up their space on the fourth floor.
At Manos Amigas, members voted to work eight
hours a day, five days a week, and to pay
themselves minimum wage, or around $200 a month.
They also receive a bonus at the end of the year,
depending on the cooperatives yearly profits. As
is the norm under the 2001 Venezuelan Cooperative
Law, a president, secretary, and treasurer are
elected yearly. The co-op holds a general
assembly once a month, and decisions are made by
consensus or by majority. No one is boss,
everyone is part of the team, said one member.
Manos Amigas is just one of the 8,000
cooperatives, or worker-collectives, formed by
the nearly 300,000 graduates of the Vuelvan Caras
cooperative job-training program since it began
in 2004. It is also just one of the 181,000
cooperatives officially registered in Venezuela
as of the end of last yearan astonishing figure
that puts the South American nation at the top of
the list of countries in the world with the most cooperatives.
Over 99 percent of Venezuelas cooperatives have
registered since President Hugo Chávez Frias took
office in 1999. The cooperative boom is key to
the shift by the Venezuelan government towards an
economy based on the inclusion of traditionally
excluded sectors of society and the promotion of
alternative business models as part of its drive
towards what Chávez calls socialism of the 21st century.
Workers at a T-shirt co-op decided to work
six-hour shifts to make time for family and
education. Photo by Sarah van Gelder.
Seeds of Venezuelas Co-op Boom
At the time that President Chávez was elected in
1998, poverty had been on a slow but constant
rise since the middle half of the century. The
consolidation of lands into a few hands had
displaced farmers who migrated in large numbers
to the cities in search of work. As a result,
Venezuela became the most urbanized country in
Latin America; its capital, Caracas, is
surrounded by poor barrios that house almost half
of its population of nearly 5 million in
substandard conditions. The implantation of
neoliberal policies during the 1990s only
aggravated the situation by privatizing
state-owned businesses, and cutting subsidies and
social spending. Inflation skyrocketed and zeros
piled on to the end of the national currency, the Bolivar.
Venezuelas poor were left with few options in a
society that former vice-minister of popular
economy (MINEP) Juan Carlos Loyo, described last
year as profoundly individualistic ...
profoundly unequal, and discriminatory.
In 1998, however, things began to change. Chávez
was elected president with the promise to rewrite
the Constitution. As he built on the vision of
South Americas liberator, Simón Bolívar, his
popularity grew among the poor. His Bolivarian
Revolution, Loyo says, includes building an
economic system based on solidarity and not exploitation.
Chávez decreed the Special Law of Cooperative
Associations in 2001, which made it easier to
form cooperatives, and, in the words of former
Cooperative Superintendent (SUNACOOP) Carlos
Molina, transformed cooperatives into a
fundamental tool of social inclusion.
Why cooperativism? Because cooperativism goes
further than purely economic activity, and is
based on productive relations which are
collective, in solidarity, and above all else inclusive, says Molina.
The Venezuelan government began promoting the
creation of co-ops by prioritizing them for
government contracts, offering grants and loans
with little or no interest, and eliminating
income tax requirements for co-ops. Cooperative
numbers immediately began to grow.
Venezuela kicked off Vuelvan Caras in spring 2004
as it began to reinvest its oil wealth in
educational, social, and health missions in an
attempt to incorporate Venezuelas marginalized poor back into society.
The same year, the Venezuelan government began to
promote what it called Endogenous Development
(economic development from within), directly in
contrast to the neoliberal model imposed during
the 1990s, which promoted privatization and corporate ownership.
Endogenous Development puts the development of
the community in the hands of the residents and
builds on the local resources and capacities for
the benefit of the region and its inhabitants.
The model is based in 130 Nuclei of Endogenous
Development (NUDEs) located across the country as
centers of local development.
At the pilot Venezuelan NUDE in western Caracas,
Fabricio Ojeda, more than 40 worker-collectives
intermingle with the government health mission,
Barrio Adentro, and the low-priced government-sponsored food store, Mercal.
Unfortunately, the reality of the cooperative
boom is not without its problems. According to
last falls first Venezuelan Cooperative Census,
less than 40 percent of the cooperatives
registered at the time were actually functioning.
Many of the discrepancies come from businesses
that registered and either never got off the
ground or failed to comply with the cooperative
law. In rare cases, so-called ghost
cooperatives registered and received loans from
the government before disappearing with the cash.
Venezuelan cooperative totals are growing at
hundreds per week, and former SUNACOOP director
Molina verified last year that they have no hope
of being able to audit them all.
Manos Amigas has not been spared its share of
difficulties. Only half of the nearly 30 founders
remain. The greatest challenge is individualism,
say numerous cooperative members. Its difficult
to change overnight. But improvements are being
made, and Venezuelas cooperatives have a long
history to learn from, even if the new co-ops dont necessarily recognize it.
Co-op worker-owners make shoes. Photo by Sarah van Gelder.
Co-ops that Pre-Date Chávez
In the foothills of the Andes, in Laras state
capital, Barquisimeto, is one of Venezuelas
oldest, largest, and most important cooperatives.
CECOSESOLA started as a funeral co-op in the late
1960s and now has over 300 associated workers,
20,000 associated members, and is composed of
over 80 cooperatives (savings, agricultural,
production, civil associations, organizations, and a puppet crew).
Each week they sell groceries and 400 tons of
fresh fruits and vegetables from affiliated co-op
producers at their low-priced markets to more
than 55,000 families, many of them from the
poorest communities in the city. CECOSESOLA
reports weekly sales of about $800,000, which
works out to approximately $40 million annually,
but thats just for starters. CECOSESOLA still
provides funeral services and also offers banking
services, a home-appliance consignment program, a
network of affordable health clinics, and they
are in the process of building their own hospital.
For those who cannot get to the markets,
CECOSESOLA loads up buses with vegetables and
fruits and takes them to the barrios. When a
neighborhood begins clamoring for its own local
market, CECOSESOLA helps set it up. All is
self-financed by the cooperatives without help from government or charities.
Unlike the Chávez government cooperatives,
CECOSESOLA has no elected officers or management
team. Decisions are made by consensus in meetings
that take up a major portion of the work week.
Associates rotate through different jobs, and
each is expected to take full responsibilityin
front of their work mates when necessaryfor the choices they make.
The goal is transformation, says long-time
CECOSESOLA organizer, Gustavo Salas Romer, The economy is secondary.
Establishing CECOSESOLA was not easy. During the
1970s, co-op members were labeled subversives,
the cooperative was infiltrated by agents from
the Venezuelan secret service, and their
transportation bus co-op was shut down and looted
by the local government for offering services so
reasonable that private bus companies couldnt
compete. The struggle drove the co-op into a
decade and a half of bankruptcy, from which many
members thought they could not escape.
But they did, and when Chávez was elected,
members of CECOSESOLA along with dozens of
Venezuelas nearly 800 cooperatives began to push
hard to get co-op norms established in the new Constitution.
At the same time, CECOSESOLA maintained its
autonomy. We are a-political and a-religious,
says Salas Romer. We have been called a lot of
things, but we stay with our own process. That is
our strength. If we were to get caught up in
politics and religion, it would create divisions and we would fall apart.
At Fabricio Ojeda in Caracas, the Mercal sells
cut prices groceries. Photo by Sarah van Gelder.
Cooperative Realities
Back at Manos Amigas in mid-March, the members
were hard at work producing uniforms for their
first contract with the Venezuelan Armed Forces.
A poster of Chávez watches over their tiny
one-room factory, which is filled with the hum of
sewing machines and the chatter of voices. In
contrast to most factories in Latin America, the
atmosphere is relaxed. Although Manos Amigas
receives many of their contracts through the
Venezuelan state for the production of uniforms,
they themselves wear none. There is no
punch-card. When someone is suspected of abusing
the system, the matter is taken up in a general
assembly before all Manos Amigas members.
Meanwhile, many Manos Amigas members continue to
study in the government education missions, Ribas
and Sucre. Such study is encouraged by the
cooperative. Other textile cooperatives have
voted to work less, to allow more time for
continued study and time with families. Larger
co-ops have set up daycare centers to care for
the children of the cooperative workers.
Its a huge success, says Angel Ortiz, the only
male member of Manos Amigas. We were workers for
others, we were employees, but today we are
business people, and we are not only producing
for the state, but for our community.
Manos Amigas members say they are economically
viable. The government, they say, pays them four
to eight times more for their merchandise than
they would receive as individual workers in a
private company. Plus, since they cut out the
corporate overhead, they can sell the product at
less than half the price charged by private businesses.
With billions of dollars invested over the last
three years in the training and support of the
Vuelvan Caras cooperatives alone, and with the
first Vuelvan Caras cooperatives only now
beginning to pay off their loans, it is difficult
to say what the future holds. Nevertheless,
Venezuela is banking heavily on these democratic
businesses, which already account for 6 percent
of Venezuelas workforce. There is no doubt that
the cooperatives are changing the lives of
hundreds of thousands of Venezuelans, who, only a
few years ago, didnt believe they could find a
jobnot to mention run their own business.
Estrella Ramirez would surely agree, as would her
partners at Manos Amigas who have an economic
future in a world which, until recently, shut them out.
Michael Fox is a freelance journalist based in
South America. In 2006, he was a staff writer
with Venezuelanalysis
(<http://www.venezuelanalysis.com/>www.venezuelanalysis.com)
and a correspondent with Free Speech Radio News.
Original source / relevant link:
<http://yesmagazine.org/article.asp?ID=1737>Yes! Magazine
Michael A. Lebowitz
Professor Emeritus
Economics Department
Simon Fraser University
Burnaby, B.C., Canada V5A 1S6
Director, Programme in 'Transformative Practice and Human Development'
Centro Internacional Miranda, P.H.
Residencias Anauco Suites, Parque Central, final Av. Bolivar
Caracas, Venezuela
fax: 0212 5768274/0212 5777231
http//:centrointernacionalmiranda.gob.ve
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