My blog

Sultanate’s cooperative sector 3rd most important engine of growth (BB - 7/4/07)

THE 8th Minister's Conference on Co-operative Legislation and Policy, themed, 'Fair Globalization through Co-operatives', was held at the Kuala Lumpur Convention Centre, from the 12th to 15th March, 2007. It was organized by the Ministry of Entrepreneur and Co-operative Development (MECD) of Malaysia.

The purpose of the conference is to catalyze multi-faceted growth and diversification of co-operatives, to analyze the effectiveness of government support to co-operatives in the form of capital, state subsidies, capacity building and infrastructural development as well as to guard autonomy of co-operatives in the garb of over dependence and complacency in co-operatives.

The international event was attended by representatives from government and co-operative movement from over thirty countries and was officiated by Dato' Seri Abdullah Haji Ahmad Badawi, Prime Minister of Malaysia. It was participated by delegates from 32 countries representing ICA member countries, ministers from selected countries and observers from Afghanistan, Brunei Darussalam, Bhutan, Cambodia, Fiji, Laos, Mauritius, Mongolia, Palestine and United Arab Emirates.

Brunei Darussalam was represented at the conference by the Minister of Industry and Primary Resources, Pehin Dr. Haji Ahmad Haji Jumat. Accompanying him was the Permanent Secretary, Dato Paduka Haji Mohd Hamid Haji Mohd Jaafar, Acting Director of BINA, Pg Sharifuddin Pg Hj Matali and several senior officers of the ministry.

In his opening speech, Datuk Seri Abdullah Ahmad Badawi said to ensure the long-term survival and relevance as a socio-economic movement, cooperatives must address several concerns such as a lack of uniformity in the development of cooperatives among the various sub-regions and countries of the Asia Pacific region.

He said although some cooperatives were global in their reach, they might not have fully addressed the effect of globalizations through the effective use of networking, the prime minister said. This resulted in cooperatives being unable to grow in size and operation to take advantage of the economies of scale which could then be translated into providing better service to members and the community at large, he added.

Ultimately, a significant number of cooperatives suffered from a serious lack of competitive, resilient and sustainable business operations. He said cooperatives must undertake specific measures to overcome several weaknesses such as adhering to basic administrative requirements which included holding general meetings and timely audit of accounts.

He further added that there must be a clear separation between the roles of the board which should concentrate on policy and the management which should focus on running the daily operation of the enterprise.

Meanwhile, in his speech, Pehin Dr. Haji Ahmad said co-operative sector in Brunei Darussalam has been recognized as the third most important engine of growth after the public and private sectors in Brunei’s national economy. Albeit small in its statistical figures in terms of the number of registered co-operatives, memberships, shares and capitals, Brunei will continue to undertake efforts to making co-operatives more competitive and grow them into a real and significant contributor to national economy.

In this regards, he said the ministry’s main focus of strategy was to provide an environment conducive to their success and development that would contribute to enhancing the socio-political stability of the country.

However, strengthening co-operatives was a challenging task, he added. The leadership of the co-operatives movement needs to be made aware of the many opportunities to develop their businesses. Co-operatives must leverage on their strengths and at the same time, they remained flexible and swift in responding to the domestic and global challenges. They must adhere to the core principles but professionally managed like any other global corporations.

On the other hand, a right balanced policy must be drawn for co-operative development that will not adversely disadvantage to other players in the economy such as SMEs, Pehin Dr. Haji Ahmad said. To support co-operative sector, His Majesty’s Government is providing various schemes for co-operatives to access loans and programs which will be periodically reviewed to ascertain their effectiveness. On the context of joining ICA (Geneva-based International Co-operative Alliance), Pehin Dr. Haji Ahmad was happy to note that the unification of co-operative movement has been facilitated through the proposed of the Brunei National Co-operative Federation (BNCF). The BNCF was scheduled to be officially launched sometimes in the middle of this year. In this respect, the ministry is grateful if ICA could extend its full support and assistance to pave the way for Brunei Darussalam to joint ICA in the near future.

On the sideline of the conference, Pehin Dr. Haji Ahmad and his Malaysian counterpart, Dato Seri Mohamed Khalid Nordin, Minister of Entrepreneur and Co-operative Development (MECD) took the opportunity to hold discussions on the possibility of forging joint cooperation between Co-operative College of Malaysia (CCM) and Brunei Industrial Development Authority (BINA) through Memorandum of Understanding (MOU).

The groundwork of the MOU has been discussed by CCM and BINA officials when both agencies exchanged working visits in August and December 2006. (CCM is under the Ministry of Entrepreneur and Co-operative Development (MECD) and BINA is under the Ministry of Industry and Primary Resources (MIPR).

With the signing of the MOU, CCM will provide assistance and expertise in areas of trainings for BINA officials as well as local co-operative bodies. With the availability of CCM branches in neighboring of Sarawak and Sabah, it is cost-effective for Bruneians to send their officials and staff to attend courses, workshops and seminars in these two countries once the MOU is inked.

The closing ceremony was officiated by Datuk Seri Mohamed Khaled Nordin, MECD’s Minister. In his closing remarks, he said advised co-operatives to look to the global markets and exert their global potential or risk being left on the sidelines.

He said enlightened co-operative members and leaders, enhanced entrepreneurship and a conducive environment were fundamental necessities to ensure that co-operatives continue to move forward. He added in order to compete in the global market, the-co-operatives, being business enterprises, should conform to the highest standards of professionalism and corporate governance. Therefore, new approaches should be introduced to ensure that co-operatives survive in the ever changing and challenging business environment such as forging strategic alliances with other parties to help promoting the interests of the co-operatives and its members.

Pehin Dr.Hj Ahmad with Dato Khalid Nordin at a dinner reception

At the end of the conference, a KL declaration was adopted and read out by the Secretary-general of the Entrepreneur Co-operative Development Ministry of Malaysia, Datuk Mangsor Saad.The declaration addresses:

1. The need to increase the participation of women and youths in the co-operative sector in efforts to ensure that co-operative movement contributes effectively to economic development. It also exhorts co-operative and government to strengthen management capacity, participatory governance and fair business relationship in ensuring the healthy functioning of the co-operative system through innovative strategies.

2. It also urges governments to catalyze the process or re-orienteering legislation and policy to strengthen the political and autonomous character of co-operatives and to provide a level playing field to enable them to compete in the global market.

3. Considering the dynamic changes and trends emerging in national economies, the Declaration also calls on both regional governments and co-operatives to periodically review the effectiveness of the legislation and policy and to introduce appropriate reforms.

4. The Declaration also affirms the participants' support to encourage co-operative entrepreneurship by inculcating entrepreneurial spirit and skills among the members, leaders and managers through education and training.

5. It confirms the participants' support for the co-operative movement as a sustainable and efficient institution through the attainment of economy of scale and strategic business alliances among co-operatives domestically and internationally.

6. It also states that there should be role clarity among different tiers to enhance the impact of the co-operative movement, besides harnessing the gains of fair globalization and liberalization for the benefit of members.

A cultural show