The role of the social economy

The labour market and the commercial market have many similar features in the sense that both are governed by the supply and demand side.

The state has to ensure that there is a continuous equilibrium in the labour market between the two sides. A disequilibrium between the two results in unemployment.

The economic policy of the state is therefore geared to harness all the resources to create activities that generate a demand for jobs, while at the same time, through its educational and social policy, the state provides an educated and healthy workforce with the skills and knowledge commensurate with those demanded by the labour market.

On the demand side, the state has to rely on the investment and initiatives of entrepreneurs and local and foreign companies to set up viable work organisations that generate employment. This market economy, through its private and public faces, tries to satisfy the diverse needs of society.

Yet, however well-developed the market economy may be, its public and private sectors do not succeed in satisfying all the needs of society. Very often it is civil society, through its sustainable initiatives, that can fulfil these unmet needs. There is thus a third way in the economy that tends to supplement and complement the private and the public sector of the economy. This third way is defined as the social economy.

The social economy refers to those organised activities independent of the public and private sectors whose driving force need not necessarily be profit.

It is one of the means by which civil society is activated by involving a substantial amount of voluntary work. At the European Forum on Local Development and Employment, organised by the Greek Presidency of the European Union on the Greek island of Rhodes (May 16-17) the contribution of the social economy to job creation was acknowledged.

The activities associated with the social economy are very often those that stem from local and regional areas and include initiatives such as cooperatives, credit unions, child care centres and other small-scale viable activities.

Very often these activities are labour intensive and client based. But they can serve as a platform of developing the employability skills of the unemployed and the socially excluded. Indeed, the intended or unintended effects of the social economy can be to provide pathways to employment within the mainstream culture.

At the forum, governments in the EU member states were urged to recognise the positive contribution of the social economy to job creation in the light of the 1997 Luxembourg EU summit.

National governments were also urged to define it from a fiscal and functional point of view and make it more visible. It was recommended that a special task force, or national observatory for social economy, be set up in EU member states to facilitate a continuous dialogue between government and relevant authorities.

What about Malta? The social economy may not seem to be conspicuous in the Maltese socio-economic landscape. The Social Action Movement (MAS) - a body with close affinities with the Church and pioneered by a Catholic diocesan priest - made a notable effort in this field by setting up two consumer cooperatives some 40 years ago. The Respite Homes and other institutions, set up mainly by the Church, to help the elderly, drug addicts, ex-convicts and the socially excluded, can be defined as ventures in the social economy by civil society.

The General Workers' Union had also set up a committee that had to work in collaboration with other constituted bodies to tackle the problem of unemployment. Perhaps the trade unions in Malta can emulate their counterparts in Italy where trade unions have been the main promoters of cooperatives. Indeed, the cooperative movement in Italy is associated with the three large trade union organisations.

An initiative by civil society which can serve as a prototype for projects in social economy is the Cooperative for Fair Trade.

This cooperative is bound by its statute to invest its profits in projects that would ease the plight of the poor and improve the social conditions of workers in developing countries.

The funds earned from its sales of products, imported from Third World countries, are to be channelled towards people in need in these same locations.

It has set the following targets: increase its sales tenfold within three years, organise educational programmes in 10 secondary schools over the next three years and open a shop for fair trading in a more prominent place than its current one in St John Street, Valletta.

The cooperative is far from being inward-looking. Since its inception in 1996, it had depended heavily on voluntary work. But it now employs two part-time workers.

Other similar ventures in the cooperative movement are the Eden Cooperative Society which through its various activities tries to integrate the disabled into the world of work and the Kooperativa Socjali Franco SI which provides disabled people with all the necessary help and resources to help them work in the agricultural sector.

More is needed to make the social economy more visible and recognised in Malta. The local councils, Church, the Apex Federation of Cooperatives, trade unions and non-government organisations can, together or separately, strive to initiate more ventures in the social economy.

The Employment Training Corporations can set up a branch to promote and support the social economy as well act as a national observatory to monitor its progress and contribution to the economy. It can indeed be part of its activation policy of getting the unemployed back on the labour market.

Mr Rizzo took part in the European forum on local development and employment' held in Rhodes as a representative of the Workers' Development Centre of the University of Malta