GLASGOW, Scotland-During the World Council of Credit Unions' World CU Conference here, CUJ asked former U.K. Prime Minister Gordon Brown the following questions:
The world's credit unions have nearly 200 million members worldwide and nearly $1.5 trillion (U.S.) in total assets, and have now come to the UK for their global meeting, yet in the U.K. cooperative finance has a very limited presence. Why?
Brown: Cooperative finance is very successful in the U.K. The Co-operative Bank, the CEO of which Peter Marks, is speaking at this conference, is one of the U.K.'s top 10 financial institutions and represents one of the many building societies that's operating in the cooperative financial sector for over a hundred years. The U.K.'s building society sector survived the recent financial crash without needing bailout assistance from any government. Today, much of the net mortgage lending in the U.K. is carried out by these mutual and co-operative banks.The credit union sector is smaller in the UK, so when I became Chancellor of the Exchequer we sought to broaden the definition of the common bond-the social connection between members of a credit union-to allow the sector to grow. The government partnered with credit unions to tackle financial exclusion and extend affordable credit to the unbanked in the U.K. which lead to an increase in the number of bank accounts.
Much of the discussion at the World Credit Union meeting-not surprisingly-focused on the global economy. What is your forecast for a recovery, if you foresee one?
Brown: We are living through the fastest change to the global economy since the Industrial Revolution. For the past 200 years, the majority of the world's investment, production and consumption took place in America and Europe. In the last 20 years, there has been an unprecedented shift in production and investment to the East; the West is now only pre-eminent in consumption. However, we are about to witness an enormous growth in consumption in developing countries; by 2020 we will see 40 percent of the world's consumption in Asia alone.
This could represent both an enormous reduction in poverty around the world, and an opportunity for Western companies to grow their exports to meet the demands of these expanding consumer countries. But this will only happen if we all recognize the potential opportunity for shared wealth creation coupled with an unstinting determination to tackle poverty.
