PRESS BRIEFING ON INTERNATIONAL DAY OF POVERTY ERADICATION

PRESS BRIEFING ON INTERNATIONAL DAY OF POVERTY ERADICATION

Private-sector-based financial cooperatives were described as a key element in the pursuit of the Millennium Summit’s year 2015 goal of halving the number of people in the world who live in poverty, experts in poverty eradication said at a Headquarters press briefing this morning.

The briefing, held in conjunction with the United Nations International Day of Poverty Eradication, was a prelude to a panel discussion this afternoon on the role of cooperatives in poverty reduction.  The briefing also coincided with the session of the Preparatory Committee for the International Conference on Financing for Development.

Susan Markham, Chief of Promotion and Planning in the Public Affairs Division of the Department of Public Information, introduced the four panellists:  Donald Lee, Chief of the Poverty and Unemployment Unit, Department of Economic and Social Affairs; Lucy Izumi Ito, Vice-President of the World Council of Credit Unions; Mwelukilwa Sizya, Director of Research and Consultancy, Cooperative College, Moshi, Tanzania; and Christopher Johnston, Manager of Research and Business Development, International Development Canadian Cooperative Association. 

Mr. Lee, who said the international cooperative movement was a key element in contributing towards halving poverty, said both the successes and memberships of cooperatives were growing.  Today, cooperatives, businesses run along democratic lines, had a worldwide membership of 700 million people.  Noting that access to financial markets was crucial in the battle against poverty, he said many people around the world did not have access to financing.  Cooperatives which provided micro-credit were an essential component in helping people break through the cycles of poverty.  Cooperatives had modernized and were now becoming private-sector-based rather than government-run.  They were also increasingly integrating social factors, such as health care, in their projects. Stating that support for the movement was growing, he cited the General Assembly’s Third Committee discussion on a set of guidelines for cooperatives, and the anticipated adoption of a resolution by the International Labour Organization promoting cooperatives. 

Ms. Ito said the World Council of Credit Unions represented credit unions in 91 countries, with 108 million members, 20 million of whom were from developing countries.  She stressed the role that micro-savings played in addition to the availability of micro-credit.  Credit unions provided people with a safe place to save and access their money.  Commonly the way that people were able to build their assets was to start with a very small loan from a credit union, perhaps even under $20, and then to start a small business and save some of the money earned.  She dismissed the myth that many people were too poor to save by citing several examples from experience.  In 1996, a programme was begun in Nicaragua with about 20 credit unions.  At that time, they were almost completely reliant on external sources for credit.  Their savings then totaled $8,500.  Four years later, following a savings mobilization programme, savings now totaled $1 million and they were gradually becoming able to finance their own loans.  In Ecuador, where there were 840,000 credit union members,

savings averaged under $30 and yet they were able to finance their total loan portfolio themselves.  Tiny, tiny savers were financing loans for everyone, she said.

Mr. Sizya also said that experience had shown that the poor could be trusted to run their own businesses if they were given the skills and the knowledge.  Cooperatives could only make a difference if the members could effectively participate.  Education was essential to enable people to participate and become competitive in the new private-sector-based cooperatives. The rapid changes in technology made educational needs in Tanzania and the rest of Africa even more pressing.  In the past 10 years, following the move away from Government-run cooperatives in his country, the cooperative education programmes established to teach participative membership had produced good results.  Some small cooperatives that had been previously performing poorly were now able to access markets and innovate new methods of accumulating funds for conducting their own businesses.

Mr. Johnston said there was a momentum towards working in partnership with developing country cooperatives and credit unions.  The credit union movement, with very strong leadership from the World Council, had done a lot to establish and build an international network of credit unions that work together for development purposes.  In that cooperatives provided income and access to employment, they were not charitable, nor social nor political, but essentially economic in nature.  However, at the same time, they combined economics with social objectives.  As examples, he cited two projects his organization was involved in.  The first was in northwest China where the people were predominantly from the minority ethnic Muslim population.  The people in that remote region were very poor and marginalized from the mainstream economy, with little access to credit.  The social features of the loan model required a health screening and stipulated that the borrower’s children be in full-time attendance at primary schools.  The combination of social features and economics, while often easy to theorize, had very immediate implications in that project.  The second example was in El Salvador to help certain independent, marginalized farmers to find alternative crops, such as cashew nuts, and to help them gain access to market information and trade channels within the region.  Cooperatives there have used funds from the sale of cashew nuts regionally and internationally to establish health centres and pay for illiteracy programmes, among other social projects. 

Ms. Markham also announced that Nitin Desai, Under-Secretary-General for Economic and Social Affairs, would read out a message of the Secretary-General on the Day in a special event from 12 noon to 1 p.m. in the United Nations Garden at the Commemorative Stone, engraved in honour of those fighting hunger.

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