Proponents: Cooperatives Can Help Alleviate

February 18, 2005

THIRTEEN years ago a group of poorentrepreneurs pooled their resources andformed a grocery store cooperative in thenorthern Pacific province of Guanacaste.They used their collective buyingpower to negotiate lower prices and competewith the big supermarket chains, andtoday, Coopecompro employs 380 peoplein 20 stores throughout the Northern Zone,Guanacaste and the Nicoya Peninsula.Every worker owns a share in the business,the lowest salaries are 15% aboveminimum wage, and the business providestraining seminars and scholarships foremployees and their families.“Most of the workers have never seenthe kinds of incomes that they see now,”cooperative manager Walter Trejos toldThe Tico Times.“Most own houses, cars, and manyhave cell phones,” he said, adding “but inCosta Rica even the shoe shiners have cellphones.”THAT kind of success has been repeatedhundreds of times around Costa Rica,which is why proponents of cooperativesagree the movement could be the wind thatblows the country’s poverty level out of thedoldrums.Though they have evolved into morecomplicated, and, detractors argue, bureaucratic,beasts, the idea of a cooperative isthat people have stronger bargaining powerand more capital in groups than alone.For example, small coffee farmers canbuy tools and supplies less expensive whenthey buy in bulk for the whole group, andthey can negotiate better prices when theircombined crops can compete with thecrops produced on big plantations.Cooperatives are usually owned by theworkers, which keeps profits in the community,and by Costa Rican law mustreserve certain percentages of their profitsfor education, insurance, health and othersocial programs for employees, their families,and the communities in which theyoperate.COSTA Rica’s more than 300 cooperativesencompass a broad spectrum ofbusinesses, including produce, coffee,dairy, electricity, savings and loan, jetrepair, cleaning services and tourism businesses,among others. Although statisticsvary, the National Institute for thePromotion of Cooperatives (Infocoop) estimates500,000-600,000 people either workin cooperatives or are affiliated and usetheir services, such as electricity clients,for example.Cooperatives often have been aresponse to hardship and economic shifts,such as after Argentina’s recent economiccollapse when neighborhood cooperativesthrived and some workers even tookover the factories in which they wereonce employed, and many here believethey can turn around Costa Rica’s povertyproblem.For more than a decade, the povertylevel in Costa Rica has hovered around20%, but jumped from 18.5% in 2003 to21.7% last year, the highest rate since1993, according to the Annual HouseholdSurvey by the National Institute ofStatistics and Census (INEC).TO combat this state of affairs, CostaRican economist Luis Garita prescribesmore investment and a broader emphasison social programs.“If we keep going along like this,poverty will not decrease and jobs will notbe created. Most employment comes fromsmall to medium-sized businesses. It’simportant to give them access to creditsand consultation,” Garita said.Garita is a professor of economics at theUniversity of Costa Rica, sits on the board ofdirectors of the state-owned Banco Popular,is former rector of the university, formerpresident of the Chamber of Economists andthe director of the official magazine forCosta Rica’s cooperative movement,Horizontes Cooperativos.Investment and social programs are themeat and bread of cooperatives, he said.

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