Cooperatives 100 Years: Key Contributors In Nation Building

The cooperative movement had its roots in addressing the indebtedness in rural areas since the early twentieth century. These micro establishment that had uplifted the communities and inculcated entrepreneurship spirit among its members, have been the third layer in developing the country’s economy for now 100 years.

Looking past on the first cooperative movement and how they have grown to super mega contributors to the nation’s Gross Domestic Product, Cooperatives are now playing an integral role in assisting the government to combat price rise issues and bringing affordable necessities to the mass consumer.

Supporting the growth of these cooperatives and ensuring initiatives by the government is rolled out appropriately is the Malaysian Cooperatives Commission or SKM. 

An agency, premised under the Ministry of Entrepreneur Development and Cooperatives (KUSKOP), SKM is tasked to enable Cooperatives to flourish and grow their capabilities beyond the current model and perhaps even move into export and import

BusinessToday caught up with SKM Chairman Tuan Haji Zazali Haron who shared insightful milestones on the Cooperatives movement in Malaysia.  

BT: This year marks, 100 years of Cooperatives movement, can Tuan Haji share the role cooperatives played in building Malaysia?

The idea of cooperatives was born in Rochdale, England in the 1840s through the establishment of the Rochdale Pioneers Society Limited in 1844. The original purpose of cooperatives introduced in Malaya back in the 1920s was to solve the problem of rural farmers oppressed by middlemen under the mismatched paddy system and the problem of indebtedness among urban civil servants at that time.

The first cooperative to be registered was Sharikat Bekerjasama-sama Jimat Cermat dan Loan Wang Pekerja-Pekerjaan Jabatan Pos dan Telekom Berhad (now known as Koperasi Telekom Malaysia Berhad) and was successfully registered on 21 July 1922. This date has become an important date which makes 21 July as the Cooperative Day Celebration in Malaysia.

As of 2021, there are 14,834 cooperatives registered with us with a total membership of 7.07 million and a share capital/fee strength of RM16.544 billion with total assets of RM154.98 billion.

Today, cooperatives are involved in various sectors and contributing extensively to the economy comprising from various levels of society. 

BT: Since 1922, how do you see the development of the cooperatives movement in Malaysia now?

From 1922 to 1957 a total of 2,243 cooperatives were successfully registered involving a membership of 267,658 people with a total share capital of RM48 million.

In 1954, Bank Persatuan Kerjasama was established and later merged with Bank Agung Kampong Bekerjasama Federation of Malaya which is now known as Bank Kerjasama Rakyat Malaysia Berhad (Bank Rakyat) In 1956, the Malaysian Cooperative College (Malaysian Cooperative Institute) was established by the Government to train officers and leaders of cooperatives.

In 1971, Angkatan Kerjasama Kebangsaan Malaysia Berhad (ANGKASA) led by Royal Professor Ungku A. Aziz Ungku Abdul Hamid was established.

The  Department which was previously known as the Cooperative Development Department was placed under various Ministries related to cooperatives including the Ministry of Entrepreneur and Cooperative Development (MeCD) in 2004, was incorporated into the Malaysian Cooperative Commission (SKM) in 2008 based on the Act. Cooperative Commission of Malaysia 2007 and the Cooperatives Act 1993.

To map the direction of cooperative development, especially to realise the desire to make the cooperative sector an important sector in national economic development in line with the direction of national development, the National Cooperative Policy (DKN) 2011-2020 was formed in 2010. The main objectives to be achieved by the cooperative sector under this basis are:

• Contribution of RM50 billion in cooperative revenue in 2020

• Improving the socio-economic status of members through Cooperatives

To ensure the continuity of the development of the cooperative movement after the National Cooperative Policy 2011-2020, a new cooperative development policy was been prepared, namely the Malaysian Cooperative Transformation Plan 2021-2025 (TransKoM) is a document a strategy that outlines the transformation measures that will be taken to strengthen the Cooperative Movement in Malaysia as a catalyst for balanced, inclusive, progressive and sustainable Malaysian socio-economic growth.

Malaysian Cooperatives have also now shown success and are recognized globally. Based on the World Cooperative Monitor 2020 Report released by the International Co-operative Alliance (ICA), Bank Rakyat has been listed as the Top 300 Cooperative by ranking 217th with the main industry which is financial services. Bank Rakyat now belongs to world-renowned cooperative-owned brands such as Credit Agricole (France), Nippon Life (Japan), Fonterra (New Zealand), Rabo Bank (Netherlands), Danish Crown (Denmark) and Sunkist (USA).

BT: What’s the outlook for Cooperatives now reaching a century in existence? 

We have planned many activities for our 100 Years of Cooperatives in Malaysia celebration. You would have seen all the promotion and branding activity around the city. Apart from that, we want to recognize the contribution of the cooperative sector to the socio-economic development of the country. Recognize cooperatives as Social Solidarity Enterprise (SSE) entities that act as agents of social and community unification; as well as Promote the concept of cooperatives as an entrepreneurial institution. 

In line with the thrust areas under TransKom 2021 – 2025, the theme of the 100 Years of Cooperatives that has been chosen is “100 Tahun Gerakan Koperasi, Membangun Keluarga Malaysia”

BT: Cooperatives remain to be a key contributor to the economic development of the country, do share more on this. 

The year 2020, began with an episode of coronavirus pandemic (COVID-19) followed by a change in the leadership of the Malaysian Government. The enforcement of the Movement Control Order (PKP) also has a negative impact on the business activities of cooperatives, which are mostly in micro and small clusters.

With the COVID-19 Assistance Program and other initiatives launched it has to some extent been successful in helping to revive the affected cooperative businesses and helping the cooperatives to recover and continue their activities and even explore new businesses in line with the new norms of post-COVID-19 life.

Cooperatives have always evolved and stayed resilient, today we are involved in various sectors of the economy and comprise of various walks of life. The concept of togetherness and justice in cooperatives is also seen as very synonymous with the main goal of the Vision for Common Prosperity 2030 (WKB 2030) policy in an effort to provide a decent standard of living for all Malaysians in 2030.

Therefore, it is appropriate for the Cooperative Movement to be a vehicle or “silver bullet” in driving the socio-economic growth of the people to achieve the goals set by the Government. The National Entrepreneurship Policy 2030 has targeted the contribution of the cooperative sector to gross domestic product (GDP) to be increased to RM100 billion by 2030. Thus, the cooperative turnover target of RM100 billion or about 5% of Malaysia’s GDP by 2030 is very relevant and can be achieved based on the impressive achievements of the cooperative sector, especially in the financial services, services sector, consumer and agriculture.

Confidence in the improvement and achievements of the cooperative sector is very positive and very prospective. This can be realized through the support shown by the Government through various promotion programs, liberalization of cooperative legislation, business development programs, capacity building, promotion and market empowerment, provision of financing facilities as well as inclusive development plans and comprehensive involving cooperatives such as the National Cooperative Policy, National Entrepreneurship Policy, Malaysian Cooperative Transformation Plan and Cooperative Digitization Plan.

All these strategic measures that have been outlined lead to the implementation of a comprehensive transformation to drive the sustainable growth of the Malaysian Cooperative Movement.

However, the success of this transformation depends on the commitment, cooperation and good efforts of all stakeholders.

Whatever it is, as the KSU responsible for the development of cooperatives in this country, I remain convinced that the Cooperative Movement in Malaysia is one of the drivers to the country’s balanced, progressive, sustainable and sustainable socio-economic growth.

BT: What are your hopes for the upcoming celebration?

I hope that with the celebration, besides giving recognition to the Cooperative Movement, it can also indirectly promote the activities and spirit of cooperation as well as open the minds of more Malaysians regarding entrepreneurship and cooperatives.

Take this opportunity to get all the info and information related to cooperatives and entrepreneurship during this celebration/program. 

I would also like to thank Business Today who together with us promoting the 100 Years of Cooperatives.

Tuan Haji was also wishful that more young generation take part in the cooperative movement and introduce new and innovative methods to expand the organisation. 

One of the legacy aspiration the Chairman would like to leave behind is a Cooperative Museum that he had visited in Rochdale, England. “Perhaps this will inspire younger Malaysians understand more on the struggles of cooperatives back in the day” he quipped.

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