ASIA PACIFIC CO-OPERATIVE MINISTERS’ CONFERENCE

A REPORT ON THE 4th CRITICAL STUDY

Mr. RANGAN DUTTA Senior Consultant – ICA - AP

UN Could not have chosen a more appropriate year than 2012 as the I Y C because:

Continuing Slowdown of the global economy, Unemployment and High Prices, Crisis in the Euro Zone and unsettling experience of the market driven economy suggest that the potential of Co-operatives as a balancing sector.

UN has asked countries to review the co-operative laws to transform them to Prescriptive to Enabling. It follows that coop policies have to Proactive and NOT just Supportive to enable the co-operatives to occupy an expanding space in the economy – Developed as well as developing countries.

This is also in line with the Kuala Lumpur Declaration at the 8 th Co-operative Ministers’ Conference convened by ICA-AP calling upon countries to adopt proactive laws and Policies to deal with impact of Globalization

4th CRITICAL STUDY : OBJECTIVES

This is a Doctrinal Research and NOT to a Status Report But, an Objective Analysis of laws and policies to assess:

(1) Capability of the sector,

(2) Constraints on attaining efficiency and Delivery of services and is thus in the nature of a Strategic

Review. This Study was somewhat contraint because of the fact that responses for the Questionnaire were received only from a few.

FINDINGS

Finding raise more issues than answers as summarized below:

1. Need for a policy shift to form a multi purpose co-operatives at the primary level. To Serve as a ‘One Stop Shop’ for meetings villagers’ needs of credit and support services with at least 1000 members.

2. Inclusion of SHG and MFI movements viewed as pre co-operatives or Non-Formal Co-operatives by Experts within the ambit of co-operatives would expand the base of co-operatives and to avoid competition within the same space

3. There is a case for one Comprehensive Co-operative Code for all sectors for more effective policy making and governance.

FINDINGS contd…

4. Policies are more effective when embodied in statutes and concrete plans rather than independent policy statements issued from time to time. EXAMPLE: Article 44 of the Iranian Constitution and the Philippines Co-operative Code of 2009.

5. Co-operatives could better be made a part of President’s or Prime Minister’s Office to accord it the due importance

6. To provide Co-ordinate Policy and Financial support, a Central Institutional Authority might help. EXAMPLE: Co-operative Development Authority in Philippines, ICCC and CORC in IRAN, Co-operative League of Thailand, National Co-operative Council of Sri Lanka.

FINDINGS Contd…7. Stricter laws to prevent demutualization and adoption of a cautious

approach to strategic alliance with the corporate sector are recommended. Experience of co-operatives in Japan in floating subsidiary companies or corporatization of value added activities of co-operatives are in the interest of the co-operative sector

8. To harmonize members control aspect of co-operatives with rights of non member share holders and depositors requires an innovative business model that ensures return of investment on non members without reducing members control.

9. Board of Directors be allowed to take responsibility and unencumbered by supervision and audit committees interference in management and make BOD accountable to to General Body.

FINANCING CO-OPERATIVES

Central Bank is to play a larger role by setting up a consortium to assist the co-operative banks to finance co-operatives to get into emerging areas.

Tax and other incentives for co-operatives should be a package for a long term compared to what is provided to corporates.

CONCLUSION

Rabindranath Tagore on co-operatives – He initiated with Leonard K. Elmhirst still hold good

“ Unless the Bank shows more enterprise in helping in organize and advance money to various types of co-operative societies, I’ m afraid there is not much justification for members to take it…

“Consolidation and expansion of co-operatives is the basis of rural development”