ILO's Fact-Finding Mission Highlights Growth Potential and Recommendations for Saudi Arabia's Cooperative Sector

The Cooperative Societies Council (CSC) has played a pivotal role in promoting and regulating cooperatives in Saudi Arabia.

The International Labour Organization (ILO) recently conducted a fact-finding mission in Saudi Arabia to assess the current landscape of cooperatives, their challenges, and growth opportunities. The mission included consultations and interviews with key stakeholders across government ministries, development funds, international organizations, and cooperative sectors.

The ILO team engaged with representatives from various ministries such as:

Ministry of Human Resources and Social Development

Ministry of Agriculture

Ministry of Housing

Additionally, discussions were held with:

Development Funds – Including the Agricultural Development Fund and the Social Development Fund

The Small and Medium Enterprises (SME) General Authority

The Food and Agriculture Organization (FAO)

Cooperatives across sectors – Agriculture, digital economy, and fisheries

Through these engagements, the ILO gathered critical insights on the state of cooperative development, the role of the Cooperative Societies Council (CSC), and its interaction with the broader cooperative movement.

Preliminary Findings from the ILO Assessment

1. Strong Government Support for Cooperatives

The Saudi government actively supports cooperative development through:

Training programs to build capacity

Dedicated funding mechanisms across ministries

Institutional backing to facilitate cooperative expansion

This reflects the government’s commitment to fostering a sustainable cooperative sector that contributes to the country's economic and social development.

2. Steady Development with Opportunities for Growth

Cooperatives in Saudi Arabia have witnessed steady progress, with strong governmental and institutional support. The cooperative model remains dominant in traditional sectors such as agriculture and retail, yet significant opportunities exist in emerging sectors, including:

Technology and digital industries

Green and renewable energy sectors

Care and social services

These emerging industries present new opportunities for younger entrepreneurs and greater inclusion of women in cooperative enterprises. Additionally, the social sector could benefit from a stronger role for cooperatives, complementing the work of civil society organizations.

3. Expanding the Potential of the Cooperative Model

Saudi Arabia’s cooperative landscape is largely based on a shareholder-driven model, which has been instrumental in sectoral growth. However, the ILO recommends shifting towards more member-driven cooperative structures to:

Increase engagement and participation of cooperative members

Encourage stronger collaboration between cooperatives

Enhance the sector’s overall contribution to economic and social development

A transition toward a more participatory, community-driven model would make cooperatives more sustainable and impactful in the long run.

4. Strengthening the Role of the Cooperative Societies Council (CSC)

The Cooperative Societies Council (CSC) has played a pivotal role in promoting and regulating cooperatives in Saudi Arabia. The ILO’s assessment identifies key areas for strengthening the CSC’s impact:

Enhancing member engagement – Establishing regional council structures to improve communication and representation.

Financial sustainability – Exploring alternative funding models to reduce reliance on government support and foster a self-sustaining cooperative ecosystem.

Capacity building – Expanding training and advisory services to help cooperatives adopt best practices and modernize operations.

Next Steps: Institutional Strengthening and Strategic Planning

The ILO will finalize its institutional assessment of the CSC and prepare a comprehensive report outlining key findings and recommendations. The report will be validated by key stakeholders to ensure alignment and consensus.

Building on these findings, the ILO will support the development of a strategic action plan, focusing on:

Capacity building initiatives for cooperatives 

Addressing key challenges in governance and financial sustainability 

Enhancing the CSC’s role as a key driver of cooperative development 

Promoting innovation and diversification within the cooperative sector

SSE Legislation and Policy Development

The mission’s findings will also inform future legislative and policy changes to create a more enabling environment for cooperatives. Key policy areas include:

Strengthening legal frameworks governing cooperatives

Ensuring alignment with Saudi Arabia’s Vision 2030 goals

Expanding support mechanisms for new and emerging cooperative models

Through these efforts, the ILO aims to position cooperatives as a vital contributor to Saudi Arabia’s economic diversification, job creation, and social progress.