During the month of June, at a conference in Asia, an academic colleague from Québec asked me why I was so optimistic about the co-operative movement and its traditions. I suspect he had taken too seriously a recent pessimistic talk we had both heard at the conference we were attending; maybe he had dwelled too long on some recent uncomfortable statistics about banking co-operatives, particularly in northern countries.

My jet-lagged brain raced -- well, more accurately lumbered -- as fast as it could over the possible answers. The first response that came to mind was that being optimistic was just natural in the summer when you come from the edges of the rain forest, the place I am lucky enough to call home. It is hard to be pessimistic in the season when the sun plays its laughing game through the branches of our spiraling trees; when the morning chorus of the birds living around our home daily reaffirms the possibilities of life - even when you remember that their calls are mostly about territory and sex; when the waters of our shores take on their most reassuring and soul-wakening blue; when the bounty of our fields delight our senses and fill our stomachs, in the case of some of us too much. In other words, it was because my mind had turned to the mush that is common to many British Columbians. It was not the answer I gave.

Instead, I responded that I did not take apprehensive presentations at conferences too seriously and that was true enough. I have read many papers and speeches given at co-operative conferences and congresses, some of them from meetings over a hundred years ago. Almost inevitably, they had been sombre; mostly they warned of a dark future in which the co-operative world would collapse before the inevitably better organized free enterprise competition and amid the messiness of democratic process.

That is the first point: there is an inevitable tendency to emphasize the negative at co-operative conferences; it is not new and it will likely always be the case.

It is, in fact, an interesting question why such pessimism so often characterizes co-operative gatherings.

One explanation becomes obvious when you consider who, by and large, gives the presentations. Most of them are intoned by old men (alas, don't look at me) for whom the role of Cassandra is naturally inviting. Many are by academics who, particularly in recent decades, are prone to identify critical thinking only with being critical. Some are by co-operative leaders striving for ways to capture attention and propel people in one direction or another -- and fear is always an easy motivator, no less for the co-operative than the professional politician. Others are by consultants identifying some great risk or weakness for which - surprise! - they have a training package or motivational series ideally suited to overcome the problem....and beware your fate if you do not buy.
        
Perhaps, too, there is a second reason: the working class and small town background of so many co-operative people, whether it be Canada or somewhere else. Co-operative movements, especially successful ones, have always been avenues of upward mobility. They are populated by people who have generally come from poorer to something better, frequently something markedly better. There is often about them a certain uneasiness; they wonder if they really belong in the "big leagues" however that might be defined; whether they can really "take on" those towers of influence and power that house the large national and international financial industries.

As much as anything else, financial co-operatives are ultimately about power, whether it be in the metropolises of the industrialized world or the villages of the marginalized regions of our globe. Only the scale changes when you move from our established movements to the new movements emerging in other lands. In fact, I suspect it might be harder in a small village or an urban community of a financially impoverished land to challenge the moneylender, the local politicians and the local elites, all of which might be necessary if a local financial co-operative is to be promoted. Certainly, I have been deeply impressed by those leaders of developing movements who, despite limited formal credentials, have had the courage to stand up despite the snickers of the established order and the animosity of moneyed leaders in their community. It is easy to ignore or underestimate what that might have meant. In any event, wherever they are, the co-operative banks are - and should represent - an alternative to what is normally the central banking system. For that reason they should not expect an untroubled and unopposed journey.

All of this leads to my second point: struggle and uncertainties, insecurities and fears, threats and obstacles, have always typified the development of co-operative movements, perhaps particularly banking co-operative movements...even the ones that today are among the most stable of financial organisations. Daring to seize power takes nerve and thus it is natural, I think, to feel trepidation when you try to do so, particularly if you want to use power in a different way. This is especially true when one realizes that, generally unlike private firms, co-operatives usually hang their dirty linen for all to see in the front of the house. Private firms will typically hide their problems in the dry heat of basement driers well away from public scrutiny unless forced to show them by vigilant accountants, snooping journalists or government regulators. They will start their public discussions, if at all possible, with a litany of successes; in contrast, co-operative leaders will, almost inevitably, start and end with the problems that perplex them.

There is a paradox, of course, in this ordering of discussion within co-operative gatherings. Perhaps it becomes particularly obvious when we reflect upon the context for this meeting. Despite all the warnings and dire predictions, the co-operative banking movement, among many downs has experienced far more "ups". Can that be anywhere more true than in the land of the mouvement Desjardins? We know that it is going through challenging times as it strives to adjust its structures, technology and workforce to the pressures of the modern financial industries. We know that it must be propelled by the allures of lightening consolidations, concentration of resources, re-engineered workplaces and reaffirming change that sing out from the steadily-enlarging business pages of our newspapers and the television business programmes that provide the most common sermons of our times.

And yet can those worries be anything like those that must have crowded the brain of Alphonse Desjardins when he boarded the train in Québec city, on his way to work at his Ottawa job for months on end, leaving the operation of the Lévis caisse - and responsibility for all they owned - in the hands of his wife Dorimene? Are they comparable to the pressures felt by the Desjardins leadership during the 1930s when the stability of their movement was shaken by financial crisis and a lack of discipline that they had learned could not be tolerated, but for which a heavy price had yet to be paid.

Could the contrast between what confronted the early builders of the Mouvement Desjardins and what is now evident be any more striking? Can we really sustain pessimism when we look at the caisses in nearly all the communities of this province and observe the edifices the movement has constructed in the centres of the province's cities; when we consider the assets that have been built, the loyalty that has been earned? Let us think, too, about the pride inevitably evident, it seems to an outsider, in the people who work for the movement here.

The point I am making is that few of the problems that one can identify in beginning movements around the world can not be found at one time or another in the past of organisations like Desjardins. Within the English-Canadian movement, the same is also true. In the Provincial Archives of British Columbia, for example, one can find the reports of the government inspectors of credit unions from the 1940s and 1950s. I doubt that there are any significant problems, errors, and examples of human frailties to be found in emerging movements today arpund the world that are not evident in those records. Only the faces and the context differ; much of the essential story remains the same.

And so my third point is: it is important to recall where we came from.

You will appreciate that I approach the topic for today's discussion from three perspectives. First, I was involved as an elected person in various kinds of co-operatives for over twenty-five years. I think that experience gives me some understanding of co-operatives in other places because there some themes and issues that are common to co-operatives everywhere. Second, that involvement, to my great pleasure, has given me the opportunity to visit co-operative ventures in many parts of the world. I am never exactly sure what I see when I visit other movements but I believe those visits have given me some limited understanding of several movements around the world, albeit not at a "hands-on" level. Finally, I am an historian who has written about the international credit union movement, not as fully as I would have liked but enough to have gained some superficial understanding of what that history reveals. I will dwell most on some of the things I learned from writing about the international credit union movement.

The international credit union movement today is vast. The credit unions affiliated with the World Council have an estimated 100,000,000 members; they possess some US$400,000,000,000; they can be found in 85 countries. What all this means, of course, is a matter of debate. Much of the strength lies in five countries: the United States, Canada, Australia, Korea and Ireland. There are significant variations in stability and managerial capacity. Some are more solidly rooted in the needs and aspirations of their people, meaning that they have differing inherent strength. Some have been caught in the vicious tides of crippling debt, unstable currencies, collapsed commodity prices and political instability that are all too common in southern lands. No developing financial system could escape the ravages of such unfavourable trends. The "regional" organisations vary markedly in their viability; some grew naturally out of the accumulating strength of their constituent movements; others were the result of premature ambitions and the passing formulations of development theory a generation ago.

When you consider this variety, trying to understand the international credit union movement is a daunting but exhilarating task. It will sound trite but the most difficult challenge is trying to understand the complexity of all that has occurred. While I recognize that there are some simple business maxims -- simple to explain but necessarily simple to implement -- there is no single, simple, correct model of credit unionism. I came to believe there were several models of credit unionism in keeping with the history, experience and purposes of credit unions. Most obviously there are one, arguably two, models emanating from the American experience another from Québec, and one or more from English-Canada. There are subtle differences in the Australian model. Then there are all the varieties in the countries that have developed movements in the last thirty years.

I came to think that the differences among all these movements was most dramatic in how they functioned within the five spheres that I came to believe were central to the dynamics of credit unions: their relationship with their members, their structural relationships with other financial co-operatives (and, in many instances, other co-operatives), their relationship with governments and the ways in which they developed their approach to management. Further, I came to believe that how co-operatives functioned in these spheres (can and should) be extensions, in fact a seamless web, with the value system and principles that are central to the co-operative quest. That is not easy for the truth is that how all these spheres inter-relate is never simple. They become even more complicated as credit unions go through various stages and reflect different institutional cultures.

Given this understanding, my conclusion would be: there is no single way to create effective credit unions or community finance...much depends upon culture, history, purpose and circumstance.

This seemingly banal conclusion has some consequences. One can find, for example, instances when any of the major approaches to credit union development - the American, the Québec, the English-Canadian, the Australian, the Irish - have done well; other instances when they have not. The movements that have impressed me the most have been in Sri Lanka and the Philippines and I have seen remarkable credit unions in Belize, Columbia, Ghana, India, Thailand, Côte d"Ivoire, Uruguay and Thailand though their national movements, and in two of the instances their regional organisations, had some difficulties. As I reflect on what was impressive, I am first drawn to the fact that they generally had financial stability - a common enough way for Northerners to evaluate them, stressing as we tend to do management effectiveness narrowly defined. Yet it was important. Co-operatives can accomplish little over the long term if they are not financially sound.

On second glance, though, I realize that these movement and institutions were also well rooted in their societies. They were not arbitrary impositions. Typically, they were built on strong networks - churches or temples, trades unions, farm organisations, work place loyalties, tightly bound communities - that formed the glue that kept them together through their formative years. Typically, sometimes not without considerable tension, they had developed their own effective leadership cadres, on occasion rather forcibly pushing aside northern advisors and advice. Often they had emerged out of traditional savings and credit traditions or long-standing systems of mutual help. In a few instances they found their passion and commitment in communal or ethnic consciousness, some of it angry, all of it proud.

Another characteristic of the credit unions that stand out in my mind is that they have a strong and varied sense of purpose. They have deep ties to their communities and serve their members in a variety of ways, although they retain a strong commitment to operating institutions that function profitably in the market place.

It leads me to another observation: successful credit unions tend to be deeply imbedded in the communities and societies they serve.

In contrast, as I think of the problem areas that I saw in the brief overview I have done of the international credit union movement three observations come to mind. Many of those who came from the established movements, particularly the North American movements characteristically underestimated the complexity of what they were undertaking. Often deeply committed to credit unionism, they assumed it could be easily communicated. They tended to assume the ways of the movement they knew could be easily replicated in other countries. In fact, they usually forgot or ignored how arduous the development of their own movement had been. Much like the missionaries of another day, they often measured success by the number of "converts" or members and the number of "churches" of credit unions. It was not just their fault -- it was the way the development community and, more importantly, the donors measured success... rather than by the stability of the organisations that were being created. It was the way the game was played. To do otherwise would have required an entirely different way to assess success and to use to justify further financial support.

There is no quick way to create successful credit unions or I suspect any kind of community-based financial institution. Stability is more important than impressive numbers of members or number of credit unions.

Second, a common challenge that I saw was the complexity involved in developing support organisations and national or regional organisations. Finding the balance between local needs and broader interests is an art form for which there is no simple formula. Generally, and probably because it made sense in securing donor funds, there was a tendency to build the national and international structures too soon. Doing so seemed to facilitate a more systematic approach. All too often though it left an institutional framework that the struggling base of credit unions could not sustain and it encouraged top-down forms of development. Too often, the result was a continuing desperate search for more donor funds and an unhealthy sustained dependence upon outside donors.

It leads me to another point that maybe is easily undervalued: international assistance programmes are always intrusions, including those aimed at fostering community credit ; they are fraught with risks and must be undertaken with great care.

Third, one of the characteristics of the more successful credit union movements and credit unions -- and their most effective advisors -- was a strong determination to lessen reliance upon donor funds as systematically and as soon as possible. There is something unseemly about co-operative institutions that do not struggle to create their own future; something that offends the very self-reliance and sense of human worth that is fundamental to co-operative thought.

Moreover, it seems to me that such pressuring is the best safeguard against unhealthy consequences from development assistance programmes. The work I have done in trying to understand the history of the international credit union movement has confirmed for me the huge risks taken by such programmes, even those operated by the best intentioned people. Any kind of assistance is an intrusion in a society and can easily have adverse effects, stimulating a class of opportunists or even sustaining exploitive situations. The sooner that a credit union system develops its own self-correcting mechanisms the better. The more that aid helps to improve performance in specific and usually measurable ways the better.

It also seems to me that credit unions that have emphasized - and have had the freedom to emphasize - the importance of savings (as opposed to being essentially a vehicle for the delivery of government loans) have had a much stronger chance of success. Growth may have been slower but it had a greater chance of sustained success. Carrying out special programmes can have value but only if it is viewed as a temporary activity from which some extra income can be derived that should be used to buttress sustainable programmes. It should not be seen as a permanent, central responsibility since what can be given can be taken away and since it can easily induce undisciplined management practices.

The second set of questions that I was given to help guide me in putting these few thoughts together was: Can the co-operative formula be modernized? If so, in what ways and what would be affected? If not, should the co-operative formula be condemned?

My approach may be a little different from others, but I believe the co-operative model is not a static one; thus I don't believe there was one quintessential model established at some point in time in the past. For me "modernisation" - whatever that exactly means - is the necessary consequence of a soundly operating organisation: that is, one that pays attention to all its main spheres of activities, membership, community, structure, government and management practice. All too often, I have found - in Canada as well as elsewhere -- one or more of these spheres is ignored or attention is paid only to management practice, narrowly defined. The result is that the "big picture" is obscured by daily preoccupations; in fact, it is distorted by limited objectives; possibilities are missed; and the co-operative advantage is truncated. I believe the co-operative formula, thus defined, is constantly entrepreneurial, holistic and adaptable. It isn't easy but it certainly should not be condemned; it should be used. It is one of the best ways I know of to insure that microfinance initiatives and activities truly serve the community in developing countries.

 I would like to close with an overhead from the World Bank comparing the development strategies in the twentieth century versus development strategies in the twenty-first century. The emphasis is on knowledge and knowledge transfer, significantly in two directions. It brings back to my mind how closely co-operative/credit union development used to be tied to educational activities. Broadly defined, I believe the co-operative movement is essentially a movement about information; ultimately, it is the most important currency in a financial co-operative.

Those who originally encouraged credit unions in other lands would have enthusiastically endorsed the approach that the World Bank suggests. They would have pressed the case that helping communities organize themselves through co-operative action was an exercise in all the best kinds of knowledge - self-understanding, careful analysis, building common viewpoints, learning necessary skills and creating self reliance. Those of you with strong co-operative backgrounds will hear the echoes.

And so my last point: The essence of good credit development is the exchange of knowledge about good practice, sound information on the real challenges confronting people, and ideas about how the co-operative advantage can be most fully employed.

And so I return to the edge of the rainforest. If I can leave behind a simple message it would be this. There is comfort in realizing that community credit has a long tradition filled with remarkable accomplishments. The constant struggle for increasing efficiency should not overwhelm everything else. The tendency towards securing uniformity must be checked by understanding the values of difference. There is power beyond that measured in the balance sheet in organisations deeply rooted in their societies. A generous amount of humility may not be the least valuable virtue among those who undertake work in other lands. It is as important to share knowledge as it is to promote training. The work is noble, as noble as any I know when it is done well; pessimism is a disservice to the spirit that should (or is it "must"?) animate it

Summary of Conclusions

1. There is an inevitable tendency to emphasize the negative at co-operative conferences; it is not new and it will likely always be the case.
2. Struggle and uncertainties, insecurities and fears, threats and obstacles, have always typified the development of co-operative movements, perhaps particularly banking co-operative movements...even the ones that today are among the most stable of financial organisations.
3. It is important to recall where we came from.
4. There is no single way to create effective credit unions or community finance...much depends upon culture, history, purpose and circumstance.
5. There is no quick way to create successful credit unions. Stability is more important than impressive numbers of members or number of credit unions.
6. International assistance programmes are always intrusions, including those aimed at fostering community credit ; they are fraught with risks and must be undertaken with great care.
7. The essence of good credit development is the exchange of knowledge about good practice, sound information on the real challenges confronting people, and ideas about how the co-operative advantage can be most fully employed.