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arnol encomendero davalos


Former member of the Advisory Council (Board of Directors) of ICA AMERICAS 1995-2009


Director of the International Journal America Cooperativa.


Current CEO of COOPETROPERU based in Lima, Peru


Author of five Books on Applied Professional Research of Co-operative Development and Social Economy


“PROYECTO DE UNA DECADA COOPERATIVA” (Project of a Cooperative Decade) www.2012.


STUDY “Financiación Cooperativa y Capitalización desde la Crisis Financiera Global 2008”(Cooperative Financing and Capitalization since 2008 Global Financial Crisis) DELOITTE. Submitted in QUEBEC 2012.


STUDY “Mapa Mundial del Movimiento de Agricultura Cooperativa y a sus Aspectos Críticos” (World Map of Agricultural Cooperativism and its Critical Issues) by Pricenthouse Coopers (PwC) Quebec 2012.


Article: “LA INNOVACION COOPERATIVA Y EL MODELO COOPETROPERU” (Cooperative Innovation and the Coopetroperu Model) By: J.A.E.D “América Cooperativa”, April 2012.


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Arnold Encomendero Dávalos
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In a world outshined by financial turmoil, due to incredible violence acts and corruption; and by repeated social protests of outraged people, mainly young people; by so much social exclusion; with an unemployed population that borders 200 million people, being the 50% of them YOUNG PEOPLE; the Cooperative Decade 2020 Project of ICA then gets and requires a real transforming Commitment, aiming to consolidate the cooperative business model and make it recognized as a “LEADER of economic, social and environmental sustainability”. Like a model preferred by people, and as a business organization of faster growth.” The International, Regional, National and Local Cooperative Movement have such commitment and responsibility that the Working Group responsible for this PROJECT, faced with 2020, has defined the Strategy in FIVE critical issues, namely:
1.- Raise participation of members and management system to a new Level.
2.- Position cooperatives as sustainability builders.
3.- Consolidate the cooperative message and define cooperatives identity.
4.- Ensure legal frameworks supporting cooperatives growth.
5.- Obtain reliable capital for cooperatives while management is assured by the members.
Precisely, these five Strategic objectives involve Specific Action Plans which must become the reason for conscious and responsible Cooperative work, so that in theory and practice it correlates Cooperative Values and economic efficiency within a process of strategic transformation with value innovation, and YOUNG men and women first and foremost organized in social networks inherent to the interconnected world, which has made human relationships a horizontal and clear digital life, and within this new context: promote and improve participatory democracy since owner members of the Cooperative participate in its management through democratic procedures that allow to “elect and be elected”, and so on; develop their management skills, with quality education and gender equality within a high-quality consensual dialogue to unify and foster the most relevant decisions that allow the achievement of optimal economic results, sustained and sustainable, with synergy and feedback at all levels.

Those who have Cooperative Management and Leadership in our power must keep in mind THREE factors, which have become the modern driving forces of human, social and economic change, which are the following:
a) Global emergence of the MIDDLE CLASS, interconnected by a variety of NETWORKS.
b) INCREASED AWARENESS OF DEMANDS AND CONCERNS OF PEOPLE IN EVERY COUNTRY ARE CONVERGENT AMONG EACH OTHER with shared aspirations and grievances, which contrasts with the ability of Governments to ADDRESS FAIR POPULAR DEMANDS.
valuable assets of Cooperative Movement and should be the breeding ground for better Plans, Projects and Programs with the view to 2020.
In this regard, we deem it is important to clarify that, in the First International Cooperative SUMMIT that took place on October 2012 in QUEBEC – CANADA, the famous Consulting firms DELOITTE and Price Waterhouse Coopers, submitted the Results of their corresponding studies which confirmed that “Cooperatives have a huge need for funding”. Thus, DELOITTE carried out the First World Survey on Cooperative Funding and Capitalization since the World Financial Crisis of 2008, coming to the following main Research CONCLUSIONS:
- Impact of Global crisis in Cooperatives is REAL
- Financial priorities are changing
- Pressure Regulation intensifies
- Access to funding is a priority
- Challenges related to the structure of Cooperatives shall be continuous and demanding.
- STRENGTHEN THE GOVERNMENT PROCESSES, regarding the Cooperative Risk Profile, strategy and Operations
Therefore, DELOITTE recommends in its painstaking Study that Cooperatives, in order to Improve access to Capital, improve the practices for risk management and increase participation of the interested parties should, as a priority ONE, consider the following issues in their structure and business dynamics:

“Review the Capital needs to ensure sustained growth of funding”.
“Evaluate Historical funding and capitalization strategies in order to determine their ability to meet future needs”.
“Expand the range of financial instruments to diversify the Capital sources with real capitalization plans, with proper consideration of internal and external investors in order to meet Capital needs and Risk Management”
“EDUCATE the members and Investors on the consequences of internal and external funding strategies”.
STRENGTHEN GOVERNMENT PROCESSES, regarding the Cooperative Risk Profile, strategy and operations”.

Meanwhile, the firm PricewatherhouseCoopers (PwC) in its study submitted the following Conclusions:

“A number of 62 Agricultural Cooperatives are among the best in the world. This economic dynamism is due to a solid historical base in Europe”
“In Europe and Asia, large Cooperatives have a greater presence of Non-Cooperative Organizations”
“Significant CHANGES ARE EXPECTED in the regulatory structure, such as: Agricultural Cooperatives will also have to address social and economic challenges. They will have to make strategic development decisions in order to keep Competitivity. They will have to face significant funding needs. They will have to find new funding sources and adopt their GOVERNMENT with the best Corporate and Institutional practices within a regulatory frame and support policies that are consistent with the cooperative mode to boost their development”, as it has been established by the Venice Declaration on March, 2012, in accordance with UNO's Resolution 56/14 and ILO Recommendation 193.
The national and international experience have shown us that, as long as professional research is used as an effective weapon for Cooperative development, the better the economic and social results will be. Only in this way and making mutual trust an influence on common benefit, will Cooperatives be more and more in conditions to boost personal entrepreneurship related to innovation, demonstrating proper efficiency, productivity, competitivity levels and thus, boost its development within economic pluralism governing in peaceful and productive coexistence with all Nonprofit organizations and emphasizing on inclusive business, in order to strengthen the Social Economy Sector as a means of contributing to economic growth, and human and social development.

Within this context, Cooperative development amid a world crossed by financial turmoil, has TWO basic strategies that National Cooperative Movements must seriously take into account in their PRESENT AND FUTURE AGENDA, in terms of internal and external funding. Let us see the following:
1.- Restate and formalize a regulatory framework that allows Cooperatives to raise funds in short, medium and long term by Attracting Deposits, Issuing Bonds in the Capital Market, among other funds accessible to Commercial Financial Institutions.
2.- Strengthen the Effective Equity by steadily increasing contributions and capitalize up to 100%, if necessary, of the annual dividends with rules enforcing this internal funding with a clear LEGAL FRAMEWORK in favor of real and effective Cooperative self-financing.
For the achievement of both strategies, Cooperative Organizations are required to PRIORITIZE the following three critical factors in order to optimize Comprehensive Cooperative Development:
a) Turn Corporate and financial management efforts into professional activity in order to guarantee cooperative development with higher performance and a comprehensive risk management covering all contingencies.
b) Design and implement a custom-made Financial Management, to steadily prove proper levels of liquidity and solvency.
c) Prioritize Research and Development emphasizing science and technology, as a dynamic factor for Cooperative business strategy, making Innovation a rule of institutional life to promote sustainable.

Cooperative members have the opportunity to show the whole world that we DO CAN consolidate the Cooperative difference; and we should not only concern but, with passion and commitment, TAKE RESPONSIBILITY. The point is to accept it and make it, not only want it without achieving it. Fair and honest men recognize the range of existent weaknesses that limit the achievement of real comprehensive development of Cooperativism in order to be more competitive. Therefore, in the new AGENDA 2020, we have to consolidate Cooperative values with economic efficiency at all levels. Let us DO NOT forget the wise message we were given at the Panama Cooperative Summit on May 2012, by Dame Pauline Green, President of the World ICA, “we are before the big challenge of maximizing the value of the International Year of Cooperatives. This year is an opportunity to make the Cooperative difference. But we will only achieve this if we work TOGETHER: Let us make everybody understand Cooperation is the best initiative in the world to reduce Poverty”.

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