Co-op power

Strong and viable alternative

COOPERATIVES are good business. Globally, they earn “big money” with annual turnover running into the trillions. Consider the top 300 cooperatives around the world — their total turnover last year was over US$2 trillion (RM8.3 trillion), according to the 2018 World Cooperative Monitor. One of them is our very own Islamic cooperative bank, Bank Kerjasama Rakyat Malaysia Bhd (Bank Rakyat), with 892,468 members and total shares and subscriptions of RM2.99 billion. Its turnover last year was RM27.67 billion. Bank Rakyat is also No. 1 in the top 100 best cooperatives in Malaysia as reported by the Cooperative Societies Commission of Malaysia.

It makes sense that we should take note of how cooperatives can help spur Malaysia’s economic growth, with total assets in excess of RM100 billion and combined revenues of over RM30 billion. There are currently 14,236 cooperatives with 6.5 million members — they form quite an economic force. This Leader has many reasons for expressing such confidence. Kooperasi New Straits Times Press (Malaysia) Bhd is one of them; it is in 34th place, with 2,611 members and a turnover of RM25.65 million last year. A cooperative is a business or other organisation, owned and run jointly by its members, who share the profits or benefits. Cooperatives largely are incorporated to help manage and raise the living standard of members. The social and economic benefits can have far-reaching impact. Web portal researchgate.net says cooperatives create employment opportunities, particularly in rural areas, and allow disadvantaged groups to be organised for social and economic benefit. In Western countries, cooperatives have been around for some 200 years; in Malaysia, the cooperative movement was introduced by the British in 1909 in the then Malaya. It took root in 1922 in response to rural problems relating to credit and indebtness, said Universiti Malaya’s former deputy vice-chancellor L.J. Fredericks in his 1973 book, Cooperative Structure and Government Policy in Malaysia.

Prime Minister Tun Dr Mahathir Mohamad had recently urged cooperatives to play a bigger role in helping low-income (B40) households cope with the rising cost of living. Cooperatives’ contribution, he said, was not just to increase the country’s gross domestic product, but also to increase the people’s purchasing power towards achieving the shared prosperity vision.

Indeed, cooperatives can and should play a key role as creative enterprises. In today’s economic uncertainty, where people may feel powerless to change their lives, cooperatives represent a strong, vibrant and viable economic alternative. The “power” is in the people’s hands to fix reasonable prices to goods according to quality. Cooperatives can control the market segment by supplying products at reasonable prices. Japan’s Consumer Cooperative Union, comprising 320 consumer cooperatives with 29 million members, for instance, not only controls the market segment by supplying essential goods, it also offers a sustainable environment to local communities.

Can’t Malaysian cooperatives do likewise? The Armed Forces Cooperative (fourth among the top 100), for example, has a chain of convenience stores serving members, with goods affordably priced. Other cooperatives which have ventured into this also deserve mention. Consider also ventures in financial technology (fintech), halal products, logistics and agriculture — for the cooperative movement to reach the targeted revenue of RM55 billion next year.

In Western countries, cooperatives have been around for some 200 years...