FOSTERING ASEAN COMMUNITY COOPERATION: Strengthening Value Chains of Community Based Enterprises
Report on the ASEC – GMM RTD April 25, 2015 at Kuala Lumpur
Asian Solidarity Economy Council (ASEC) & Global Movement of Moderates Foundation (GMM) hosted a one day Pre-Asean Summit Roundtable Discussion on April 25, 2015 at the GMM headquarters in Kuala Lumpur entitled FOSTERING ASEAN COMMUNITY COOPERATION: Strengthening Value Chains of Community Based Enterprises
About 60 people representing the public, private, civil society, community enterprises and academics participated from a cross session of Asean countries and also from India & Japan. The deliberations were very stimulating, forward thinking and grounded in both critical reflection and practical ground realities.
The main coordinators of this discussions were Dr Ben Quinones, the ASEC Chair (Philippines), Datuk Dr Denison Jayasooria, the Deputy ASEC Chair (Malaysia) and Pak Bambang Ismawan, Chair of ASEC Indonesia & Founding Chairman of Bina Swadaya Foundation (Indonesia). Ms Elaine Tan of ASEAN Foundation & Mr Asrul Daniel Ahmed of GMM participated in the official opening.
OBJECTIVES OF THE RTD
– To promote the concept of solidarity economy, social business, social enterprise and social entrepreneurship as a vehicle for community empowerment and in addressing poverty and inequality in ASEAN member countries;
– To draw policy implications in identifying the place of social solidarity economy in the action plan for Sustainable Development Goals as a post-MDG initiative;
– To discuss the possibilities of charting a cooperation road map among ASEAN member countries, civil society, academic institutions and private sector.
PRESENTATIONS AT THE RTD
Through the three main sessions resource speakers made their presentations and interventions:
Session One: Solidarity based community enterprises for ASEAN: opportunities, possibilities and challenges. Resource persons: Dr Ben Quinones, Pak Bambang Ismawan, Tan Sri Dato Michael Yeoh (ASLI-Malaysia) & Amb Pradap Pibulsonggram (ASEAN Connectivity Committee & Thailand)
Session Two: Case study presentations of community based enterprises. Resource persons: Ms Jun E Tan (ISIS Malaysia), Mr Rollay Victoria (ASKI Philippines), Ms Nishimori Mitsuko (PARCIC Japan) & Mr Christopher Chong (UNDP Malaysia). Moderated by Mr Brigido Simon Jr (ASEC Philippines)
Session Three: Proposal for ASEAN South-South and Triangular Cooperation (SSTC) in developing value chains of community based enterprises. Resource persons: Ms Christine Gent (WFTO), Dr Hezri Adnan (ISIS Malaysia) & Mr Arnelo Astillero (ICCO Cooperation)
The presentations were followed by an open forum in which participants raised queries, gave comments on the topics, and made suggestions on strategies for integrating community based enterprises into the ASEAN Economic Community.
SUMMARY OF THE RTD DISCUSSIONS
Public and private sector leaders, civil society organizations (CSOs) and social entrepreneurs participating in the ASEC-GMM Roundtable Discussion on Fostering ASEAN Cooperation held in Kuala Lumpur on 25 April 2015 learned and understood that:
– A community based enterprise is an enterprise created voluntarily by groups of citizens of a community and managed by them, and not directly or indirectly by public authorities or private companies, even if they may benefit from public/private grants and donations. Their shareholders have the right to participate (‘voice’) and to leave the organization (‘exit’). The legal personality of CBE may take the form of cooperative, association, club or non-formal self-help group.
– Community supported agriculture (CSA) is a form of CBE where an organized group of consumers (cooperative, association, club or non-formal self-help group) is the pivotal actor, i.e. the actor around which the socio-economic system is built and developed. In CSA, the organized group of consumers enter into a friendly partnership with a group of organic producers (cooperative, association, club or non-formal self-help group). CSA promotes mutual assistance: farmers get to market their produce in advance & receive payment in advance, while consumers eat ultra-fresh food. CSA enhances deepening of friendly relationships: producers and consumers get to know each other personally; families of consumers ‘adopt’ the producers’ farms as their own. CSA encourages learning among members of each group. CSA is relevant to the ASEAN Economic Community on the following grounds: (i) Growing urbanization in ASEAN member countries threatens food security. Urbanization and economic growth are often associated with commercialization of agricultural lands and deforestation; (ii) Green space is an important contributor to urban liveability. High quality of green space is associated with high quality of urban life; and (iii) CSA is a cost-effective means of ensuring food security as well as a natural means of sustaining green space – within the country and across the ASEAN region.
– Fair Trade is another form of CBE where the Fairtrade buyer is the pivotal actor. Although Fair Trade originated as a means of “teaching poor people to fish” instead of “giving fish”, it evolved through the years as a means for achieving the MDGs. The benefits of Fair Trade include: higher price paid to & higher income for marginalized farmers, pre-financing at world market rates, price guarantee, access to training in organic farming and other technologies, long-term relationships between producer cooperatives and buyers, and increase in self-esteem of producers. Fair Trade is relevant to ASEAN Economic Community on the following grounds: (i) it creates a niche market for community based enterprises, which niche market adheres to universally accepted standards of ‘fair trading’ practices; (ii) by adopting Fair Trade as a strategy and means for integrating CBS into the ASEAN Economic Community, ASEAN would accelerate the process of concretizing its people-to-people connectivity program via economic means or market mechanism. Notably, integrating both Fair Trade and CSE into the AEC will contribute to eco-tourism and growth in ASEAN travel, hotel and restaurant business, and services sector.
– Integration of CBE value chains by microfinance institutions (MFIs) is a recent phenomenon. It gradually emerged as MFI portfolios grew larger and as they ventured into agricultural financing. Large portfolios enabled MFIs to engage in bulk financing. In addition to production loans, the MFI also gives farmers a marketing loan with their paddy produce serving as a collateral. The paddy is milled and sold to institutional buyers (hospitals, schools, private companies, wholesalers/retailers) when prices of rice have gone up. CBE value chains integrated by MFIs are relevant to AEC on the following grounds: (i) Microfinance has been instrumental in empowering women; and (ii) Integration of CBE value chains managed & run by women hastens the realization of a people centered AEC.
Integration of value chains allows Microfinance institutions (MFIs) to engage in bulk financing, which reduces their transactions costs and allows them reduce interest rates on loans; and (ii) Integration of CBE value chains enables MFIs to engage in bulk financing, which reduces their transactions costs and allows them to reduce interest rates on loans.
– A socially enterprising consumer collective thriving in Atsugi city, Japan is a CBE where the working woman is the pivotal actor. Having been successful in operating a community supported agriculture, the women workers continued to face the social problem of taking care of the elderly and the children. They solved the problem by setting up elderly care centers and child care centers. A socially enterprises workers collective is relevant to AEC on the grounds that: (i) it encourages citizens to act on their social responsibility; (ii) working women are the pivotal actors of community supported agriculture, microfinance and fair trade; and (iii) they provide dynamic power to the AE
–Non-formal self help groups are the initiators of rural CBEs in Indonesia. They range in membership size from 15 families to 30 families that are engaged in a common economic activity. The self help group synchronizes the production schedules of members, helps in sourcing funds for operations, and facilitates the marketing of products of members. Integration of non-formal self help groups into AEC will further boost people’s participation in realizing the ASEAN Economic Community.
– South-south and triangular cooperation (SSTC) implies cooperation between developing countries, whereas, triangular cooperation includes the participation of one (or more) Northern partner (i.e. developed country) supporting the alliances between countries of the South. SSTC is a partnership between equals that is guided by the principles of solidarity and non-conditionality.
SSTC is relevant to AEC in the sense that it: (i) strengthens horizontal cooperation between countries with no conditionalities, based on non-discrimination and on the sharing of information, training of human resources or replication of strategies; (ii) supports innovations that increase the productivity of local resources and/or enhance the effectiveness of development programs; (iii) enhances the adaptability/ replicability of local good practice whose features are transferable to other contexts or situations; (iv) reinforces the sustainability of SSE good practices when they are adapted and replicated in countries of the South; and (v) helps to build CBE value chains that enhance economic diversity and resilience.
Four key outcomes and recommendations emerged from the CBE RTD namely:-
First, Endorsement of Statement of the Asian Solidarity Economy Council and the Global Movement of Moderates on “Building a People Centered ASEAN through Community Based Enterprises”
The draft statement was first read and endorsed by the ASEC workshop on the occasion of the ASEAN Peoples’ Forum on 23 April 2015 held at Wisma MCA, Kuala Lumpur. The draft statement was subsequently revised and endorsed by the ASEC-GMM Roundtable Discussion on 25 April 2015.
Second, a Seven Point Strategy for integrating community based enterprises in the ASEAN Economic Community was deliberated and adopted by the RTD. Participants reached the consensus that the seven point strategy should be elaborated in a document which shall at the outset elaborate a regional (ASEAN) framework for CBE development.
The ASEAN CBE development framework should clarify the vision and core values of organizations behind the ASEAN CBE initiative and provide a business plan against which the performance of participating organizations can be monitored and evaluated. The Seven point strategy is listed below.
Third, Mapping of core competence and interests of participants with respect to the seven point strategy
Having reached agreement on the seven point strategy for developing and integrating CBEs into the ASEAN Economic Community, the participants were asked to indicate their ‘primary involvement’ in only one strategic action and their ‘secondary involvement’ in another strategic action given their core competence and area of interest. The ‘primary’ and ‘secondary’ involvements also indicated the areas where the individual participant is likely to take action in the succeeding days.
Fourth, Immediate Steps : Each representative of ASEAN member countries (both government and CSO, when applicable) as well as representatives of participating international organizations were asked to indicate voluntarily the immediate steps they are willing to undertake on any of the Seven-point CBE development & integration strategy.
In response, the participants who represented their respective organizations volunteered to articulate what they thought they could do immediately to contribute towards fleshing out the Seven point ACBE development and integration strategy.
SEVEN-POINT STRATEGY FOR INTEGRATING COMMUNITY BASED ENTERPRISES IN THE ASEAN ECONOMIC COMMUNITY
The ASEC-GMM Roundtable Discussion recommended the following :
One: Each ASEAN member country selects 3 CBEs to monitor & evaluate
It was agreed that three CBEs is a reasonable target number that can be achieved within a year. The objective of choosing ‘model’ CBEs to be monitored and evaluated is to provide historical data on the performance of CBEs which can be presented during the annual ASEAN Summit of Leaders. The general sentiment of participants was that increased awareness and appreciation by ASEAN Summit leaders of the contributions of CBE to wealth creation, enhancing the quality of community life, empowering people’s participation in local development, environmental conservation, and responsible use of local resources in a sustainable way will hasten the adoption of CBEs by ASEAN as integral component of the ASEAN Economic Community.
Two: Train the leaders & managers of CBEs
An immediate step the participants committed to undertake is the training of BCE leaders and managers. To promote collaboration among national networks of civil society organizations (CSOs) and social enterprises, it was agreed that a shared calendar of training courses shall be compiled by ASEC and circulated to concerned networks.
Three: Establish an ASEAN Growth Fund for CBEs
Availability of long-term funds was cited by participants as a common constraint to the scale up of supply chains of CBEs. Short-term credit funds are not sufficient and sometimes lacking, but the absence of long-term funds poses a big constraint to the development and sustainability of CBE supply chains. It was therefore proposed that GMM-ASEC devote due attention to the establishment of an ASEAN Growth Fund for CBEs and attract social investors to support the Fund by parking some of their funds in it.
Four: Offer formal education for CBE leaders & manager to instill in them the ‘ASEAN community’ mindset
It was noted that while everyone is talking about “ASEAN” in reality the prevailing mindset of individual citizens of ASEAN member countries including leaders and executives of government agencies, private companies, and civil society organizations remain parochial and largely focused on ‘national’ or institutional interests. There is a need to develop a new generation of citizens who think and do “ASEAN”. It was, therefore, agreed that formal education courses should be developed in collaboration with interested national universities for the purpose of instilling the ‘ASEAN community’ mindset and practice.
Five: Promote policies at ASEAN and member-country levels in support of CBE development
It was observed that certain policies and programmes supportive of CBEs do exist in ASEAN member countries, but the implementing guidelines and rules need further clarity and strengthening. The promulgation of a social enterprise bill in South Korea and the current efforts to pass a social enterprise bill in the Philippines are examples of concrete steps that ASEAN member countries can learn from. It was agreed that national networks of civil society organizations and social enterprises should consistently engage their policymakers in a policy dialogue with the aim of supporting the development of CBEs.
Six: Enlist 1 Million ‘socially enterprising’ consumers from 10 ASEAN countries to patronize CBE products
The target number of 1 million ASEAN socially enterprising consumers for CBE products is a symbolic figure. There were queries whether the target was an annual one or for a definite period of 3 or 5 years. It was pointed out that the outreach of national CSO and social enterprise networks in terms of household members already run into tens of millions, for example in Indonesia and in the Philippines. It was clarified that the 1 million target is in terms of ‘ASEAN’ customers who patronize not only products of CBEs in their respective countries but also products of CBEs from other ASEAN member countries. Whether the ‘ASEAN’ CBE customers should be identified through a membership ID or some other means of verification was set aside for further discussion in the future.
Seven: Develop a regional framework for CBE development: vision, core values, business plan
Prepared by: Dr. Benjamin R. Quiñones, Jr., Chairman, Asian Solidarity Economy Council (ASEC). Contact details: email@example.com (April 14, 2015)