Cooperatives in Argentina’s Time of Need
Beginning with immigrants from Europe at the end of the 19th century, cooperativism has a long history in Argentina as a sector which has repeatedly proven its economic viability amidst adverse conditions. This country’s historical 10-year boom and bust cycles were also times when cooperatives performed well as strategies for coping. The multiple crises of the last two years in Argentina have been yet another test of these enterprises.
In 2019, towards the end of the administration of former President Mauricio Macri, Argentina was once again in an economic collapse marked by peso devaluation, accelerating inflation, an increase in energy tariffs and a consequent fall in real wages. This government had demonstrated a dislike of cooperatives in general and Argentina’s famous empresas recuperadas (recovered businesses, many of them factories) in particular, probably because they seemed to constitute an alternative to neoliberal capitalism.
So in 2020, when Covid-19 finally hit this part of the world, the situation was already delicate. In addition to the thousands and thousands of closures of SMEs and businesses caused by the economic crisis — an alarming 10% contraction in the overall economy — there was the confinement of the population and the total closure of existing businesses due to the increase in contagion and preventive policies. In March of that year, the IMF declared Argentina’s debt unsustainable and advised deferred payments for foreign currency until 2024.
So in 2020, when Covid-19 finally hit this part of the world, the situation was already delicate. In addition to the thousands and thousands of closures of SMEs and businesses caused by the economic crisis — an alarming 10% contraction in the overall economy — there was the confinement of the population and the total closure of existing businesses due to the increase in contagion and preventive policies. In March of that year, the IMF declared Argentina’s debt unsustainable and advised deferred payments for foreign currency until 2024.
The new government of Alberto Fernández arrived as four out of ten Argentines were living below the poverty line. Remarkably, this administration was pro-cooperative, offering the sector support in the form of subsidies, preferential credit, tax relief and a national register of the recovered businesses.
Perhaps more remarkable was the fact that 10% of Argentina's GDP in 2020 was produced by the cooperative sector, which now amounts to some 20,000+ businesses.
English speakers may be familiar with some of the cooperatives which have emerged from the recovered factories movement, dating back to the 2002 crash and documented in the film The Take (2004). The movement resulted in over 300 recovered businesses, mostly centered in Buenos Aires.
One such business is Farmacoop Ltda, the first laboratory among the recovered businesses and a provider of rapid Covid tests, masks, disinfectants, and related supplies.
Textiles Pigue is also a recovered factory (relaunched in 2004) specializing in sport equipment but which also pivoted to face masks, surgical masks and uniforms when the pandemic arrived.
Another important organization in the Argentine cooperative ecosystem is FACTTIC (Argentine Federation of Technology, Innovation and Knowledge Work Cooperatives), an association of 28 co-ops focused on a broad range of technology offerings.
What is also notable about the Argentine cooperative sector is its ability to generate second- and third-tier federations in order to gain the benefits of volume purchasing, lobbying, process improvements, and responsible waste disposal.
Argentine co-ops are also known for encouraging family members to join, often to participate in a soccer team or a vocational school run by the cooperative. Notable also: the good cooperative labor relations typical in Argentina.
So, what does the sector need to gain competitiveness in the market? What are the problems/needs it faces today and what are the challenges ahead? For the future, there seem to be three challenges to growth in this area, both for conventional cooperatives and the promise of platform co-ops.
First, access to credit, a perennial problem for startups of all kinds. Second, continuous education in the form of incubators and accelerators. Third (and most importantly), the need to generate large-scale responses to this country’s growing social and economic fractures.
Finally, as we say in Spanish, la lucha sigue — the struggle continues, especially here, where cooperatives and recovered businesses face lots of legal contestation.
Editor’s note: Those interested in further study will find excellent recent analysis of these movements in Marcelo Vieta’s book Workers’ Self-Management in Argentina. Also recommended is an interview with Vieta recorded last year on the Each for All podcast.