Working in international development has always been fulfilling for me. However, only rarely have I been able to see what happened after the passage of time. So, I was really excited about the chance to return to Poland some 20 years after working there to look at the impacts “then and now” of cooperatives and how they have served their members both economically and socially.
USAID made a big investment in Poland in the 1990s. This was the time I worked there, a time of great upheaval and huge possibility. The oppressive Soviet regime had been cast aside, and there was heady excitement as a more decentralized, democratic system of government was put in place, and the economy began its journey towards a market economy.
The abstract words, however, do not begin to tell the stories of those involved. Those who were supportive of the changes suddenly found themselves in a very dynamic, very fluid situation. One person told me, “All the rules have changed.”
In that flux, there was both uncertainty and also opportunity. For the cooperative development community that meant the chance to help. Under the Soviets, cooperatives were used as instruments of the state. Now, the government changes provided a window for new cooperatives to emerge focusing on the core principles of financial sustainability, democratic ownership and control and concern for community. My direct role was to design and oversee a project that did just that in the housing sector.
Housing was a key issue to kickstart the new economy and also to meet the expectations of many Poles who had no choice but to live in cramped, soulless multi-family blocks. From a pilot initiative in the towns of Zory and Bialystok, the USAID-supported project was successful beyond my own hopes. It grew from these projects to, at one time, housing initiatives facilitated by technical services organizations, called AWIMs, in 32 cities across the country. The approach was technical assistance and knowledge transfer. No heavy capital investments were made by USAID but rather, true to cooperative norms, capital was mobilized locally by members.
In many senses housing was a symbol of the changes taking place. Tangible outcomes from that first project were 150 attractive, reasonably priced housing units responding to the priorities of the new owners, followed subsequently by many others numbering over two thousand. Less tangible, but just as visible, critically important outcomes were the behavior and mindset changes of owner-members, of local government officials, of bankers and other professionals: Strategic local planning and investment to facilitate housing, personal and professional risk-taking, new market opportunities, and an entirely new vision of how housing could be delivered using the momentum of private initiative.
Similar changes took place across the many sectors in which Cooperative Development organizations were working – dairy, communications, banking, and finance.
When we went back with the OCDC Research Group to ascertain how cooperatives are faring today, we were thrilled to learn that across all of these sectors, including housing, they are now serving their members and that members report (verified by national statistics) higher than average incomes and higher social capital. Most compellingly, members ascribe these economic and social benefits to cooperatives!
Photo by CHF (Global Communities).
Piotr Zapotoczny, AWIM-Olsztyn director: “The switch to a market economy in the 1990s was a very special moment. This was the period when everyone was looking for a new way of doing things and for a place for oneself in this new society. AWIM program [CHF program which facilitated new cooperative housing development] showed us new opportunities. It increased our understanding of entrepreneurship and ‘opened the window’. It showed what the market is, how it operates, and what can be done.”
Data from the OCDC Research Group survey shows that 83.4 percent of cooperative members believe that cooperative membership has positively affected their economic situation, and 72.4 percent of cooperative members state that cooperative membership has enhanced ability to make good decisions for themselves and their families (agency).
Twenty years on, has the early cooperative assistance supported by USAID left any direct traces? Yes! We found that there is also a remembered legacy that includes the impacts of investment in human capital and also in institutions.
The just-retired president of the WIST communications cooperative, Tadeusz Silsz, said to us, “Were it not for American help in the early 1990s, we would not be able to establish the co-op and survive.” WIST Cooperative expanded over the years and today provides phone, internet, and cable services; starting with a handful of members, it now has 11,000, and as cooperatives so often do, serves an under-served area that was not of interest to profit-seeking ventures.
Quite naturally, these findings were exciting for me. In reflecting on them, I think that they should also be exciting for USAID as a donor. As we heard from testimonials, could see with our own eyes, and learned from objective research, USAID should be proud that through cooperatives, it laid the foundation for resilient institutions, helped individuals navigate social and economic change, and created a broader base for economic self-reliance and democratic values. All of these continue to help Poland today as the eighth largest economy in the European Union. For USAID, investing in cooperatives was a smart choice.
Judith Hermanson is the Research Director of OCDC, an association of cooperative development organizations, where she previously served on the Board and twice as its Chair. As Research Director, she leads OCDC’s research activities that seek to develop evidence about the effectiveness of the cooperative development business model and to enhance learning to improve program design and impact. Her career in international development includes leadership roles in several international cooperative development, US civil society, and academic organizations. She has worked in 50+ countries in Africa, Asia, Latin America, the Middle East, Europe, and the US, providing hands-on technical assistance and policy advice.
This post was originally published on July 18th 2018 on Market Links.