November
7, 2012
Addis Ababa — As Ethiopia imposes increasing restrictions on
foreign-backed NGOs, cooperatives - which have boosted the country's coffee
industry - are being championed as a preferred model for economic development.
NGOs have been active in Ethiopia for roughly 40 years, yet the
country still ranks in the world's seventh percentile in terms of health,
education and living standards, according to the UN Development Programme's
human development index. This has led to questions about the effectiveness of
NGOs - especially those that are foreign-backed - in creating tangible,
long-term progress.
By contrast, say development observers and government advisers,
the cooperative model give ownership of development issues to those affected by
them, creating incentives for lasting change. "Cooperatives are businesses
owned and run by and for their members... They have an equal say in what the
business does and a share in the profits," according to the International
Cooperative Alliance (ICA).
Ethiopia's coffee industry has recently seen significant growth,
thanks in part to indigenous coffee cooperatives - demonstrating, advocates
say, cooperatives' superiority to NGO assistance.
But others argue that cooperatives model on its own isn't
capable of achieving long-term sustainability, and that many cooperatives
remain reliant on NGOs for support. Success, they say, will depend on the
combined efforts of cooperatives, NGOs and the Ethiopian government, and even
foreign government assistance, where appropriate.
Fraught political history
Both cooperatives and NGOs have had fraught relationships with
Ethiopia's political establishment, with cooperatives once perceived as an arm
of the government and NGOs now seen as agents of foreign influence.
The cooperative movement in Ethiopia emerged in 1950s, during an
effort to transition from subsistence farming to commercial agriculture. In the
1970s, under Mengistu Haile Mariam's socialist-inspired Derg regime,
cooperatives were used to implement a series of radical policies, such as the
March 1975 Land Reform Bill, which outlawed private land ownership. Farmers
were forced to join cooperatives and give up land for collective use; as a
result, cooperatives became very unpopular.
The 1991 rebellion that ousted Mengistu paved the way for more
democratic, member-constituted cooperatives, even as the government itself came
under criticism over its commitment to democracy. General assembly members were
elected to determine cooperatives' policies, and cooperatives began to adhere
to the principles of the ICA.
Over a decade later, NGOs became targets of government ire.
Several were perceived as assisting Prime Minister Meles Zenawi's political
opponents during the 2005 election, which nearly saw Meles's defeat, according
to Stephan Klingelhofer, senior vice president at Washington-based the
International Centre for Not-for-Profit Law.
In the following years, members of organizations such as the
Ethiopian Human Rights Council and the Swiss branch of Médecins Sans Frontiers
(MSF) faced arrests and detentions. The International Committee of the Red
Cross and MSF Belgium were expelled by the government in August and September
2007.
In February 2009, the government adopted the Proclamation to
Provide for the Registration and Regulation of Charities and Societies, which
restricted the activities of NGOs receiving more than 10 percent of their
financing from foreign sources. Over the past six months, the restrictions have
expanded, Klingelhofer said.
Concerns about dependency
These tensions are now bearing out in how cooperatives and NGOs
are viewed. As the successful strategies used by coffee cooperatives are
applied to bolster other agricultural sectors - including dairy, wheat and
livestock - cooperatives are increasingly seen as alternatives to the kinds of
assistance offered by NGOs.
Particularly problematic is that many NGOs are foreign-backed
and are not member-oriented, critics say.
"It's a problem of dependency syndrome," said Mesay
Kassaye, who works for the Costa Foundation, which assists coffee cooperatives.
Kassaye previously worked for the NGO Self Help Africa and argues that too few
NGOs promote self-sufficiency. "An NGO would bring all things, so that the
community remained like beggars, with no role in development."
Programmes often collapsed when NGOs departed, and some NGOs
channel up to 75 percent of their budgets to administrative costs, he says.
Cooperatives are an improvement because Ethiopia's chronic problems are better
tackled by the long-term capacity-building that cooperatives promote, he contends.
This view is shared by Haile Gebre, who is regarded as the
father of Ethiopia's cooperatives. He headed the government's Bureau for
Cooperatives in the 1990s, and his policies have resulted in the way
cooperatives function today. He concedes the issue is not quite
black-and-white: "Nothing is totally wrong or fair - things are
relative," he said.
"But if I'd been president of Ethiopia in 1973, I've have
banned NGOs from Ethiopia."
NGOs are good for providing temporary support after
catastrophes, but for poverty, they aren't the solution, he argues.
Outside help
Yet a variety of NGOs have been responsible for supporting the
cooperative model.
"We are development-oriented, not relief-oriented,"
said Amsalu Andarge, an Addis Ababa-based field officer coordinator for the NGO
Agriculture Cooperative Development Integrated Volunteers Overseas Cooperative
Assistance (ACDI/VOCA). In 1995, the US-based organization helped launch
Agricultural Cooperatives in Ethiopia (ACE), which established regional-level
cooperative bureaus.
"Those cooperatives established by ACE are now leading the
economic transformation of the country," Andarge said.
In fact, some cooperatives receive help not only from
foreign-based NGOs but from foreign state aid agencies as well.
Since September 2003, the Japan International Cooperation Agency
(JICA) has worked alongside the Oromia Forest and Wildlife Enterprise (OFEW), a
state-run forest protection organization, and local coffee farmers, helping
them produce sustainable coffee for the Japanese market, said Fumiaki Saso, a
JICA project coordinator in Jimma, 200km southwest of Addis Ababa.
JICA offered technical support, such as organizing Rainforest
Alliance certification and facilitating access to the international market,
while OFWE controlled the coffee exportation process. After administrative
costs - including JICA's - were covered, 70 percent of remaining revenue went
to farmers and 30 percent was retained by OFWE.
In March 2012, full oversight of the project was successfully
handed over to OFWE.
Support and oversight needed
The cooperative business model contains both the key to economic
success and a raft of potential problems, said cooperative expert Gebre.
"They are self-contained: members are producers, sellers,
buyers and consumers, and the cooperative that is member-led and
member-oriented will remain efficient and effective," generating profits
for members and contributing to self-sufficiency.
But if cooperatives start to focus on profits to the exclusion
of their members' needs, they could be transformed into supply-and-demand
driven "oligarchies", he said, describing organizations controlled by
a select few with no concern for improving members' lives or investing in
communities.
"As they get bigger, there may be problems," allowed
Kassu Kebede, a programme manager for ACDI/VOCA.
But growth can't be avoided; to compete, the cooperatives will
need to diversify and become business-oriented. And it can be handled
successfully, he reasoned, citing as an example India, which has cultivated
large, business-oriented cooperatives that compete internationally while still
serving farmers.
For now, cooperatives still need support from NGOs like
ACDI/VOCA and the government, he added, noting that the latter should also
provide oversight to ensure cooperatives balance business-oriented growth with
the needs of cooperative members.
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This report does not necessarily reflect the views of the United
Nations.