Empowering Cooperatives for The New Era

Cooperatives have undeniably played a crucial role in helping Malaysia to develop the entrepreneurial among societies and more extensively in the rural community. In 1922, when the first cooperative was established, the entrepreneurial movement was realised to uplift rural communities and eliminate indebtedness among the residents.

Today lead by the Ministry of Entrepreneur Development and Cooperatives (KUSKOP), its minister YB Tan Sri Noh Omar speaks proudly on the success of Cooperatives in Malaysia and its contribution to the country’s economy. 

Tan Sri speaks to BusinessToday, on the 100 year celebration of Cooperative movement in the country and the role the Ministry plays in developing entrepreneurship. 

BT: What is the Ministry’s vision in developing the cooperative sector in Malaysia?

The Ministry’s role is to make entrepreneurship as one of the main agenda of the country by creating a holistic and conducive ecosystem and our vision is for the country to be superior entrepreneurial nation that is united, prosperous and dignified. 

For me this is a second opportunity to give and develop the field of entrepreneurship and cooperatives in the country. (Tan Sri Noh was in the Ministry in 2008-2009)

The role of the cooperative sector in the national economy is no less important as that of other private sectors. Cooperatives can be used as a medium to help the Government implement various programs to ensure the country’s economic growth remains sustainable and the distribution of wealth is made transparent, fair and equitable.

As an organization that has existed for the longest time in the country (100 years from 1922), we have gone through many ups and downs, the Covid-19 pandemic and current economic uncertainty has seriously challenged the performance of the cooperative movement.

However, the Government through KUSKOP and its agency, the Malaysian Cooperative Commission (SKM) have taken proactive steps by introducing specific stimulus packages to the affected cooperative movements. Among the initiatives introduced is the Cooperative Economic Recovery Intervention Package with a total incentive of RM30 million (RM20 million in 2021 and RM10 million in 2022) to rehabilitate the affected cooperative businesses, especially those involved in the tourism sector. Apart from that, the Government has also allocated RM70 million and RM100 million, in 2021 and 2022 respectively, through the MGS Revolving Capital Fund Financing to provide revolving capital to the cooperatives involved to start and rehabilitate their affected businesses.

Apart from short-term solution measures, the Government has also prepared medium and long-term plans through the implementation of the 12th Malaysia Plan (12MP). A total of RM35 million has been allocated to the cooperative movement under the 12MP for the implementation of two main programs, namely the Business Development Program through Cooperatives with an allocation of RM25 million and the Cooperative Supply Chain Empowerment Program of RM10 million.

Under the 12Malaysia Plan, the Government through KUSKOP has also drafted the Malaysian Cooperative Transformation Plan (TransKoM) 2021-2025 as a strategy to empower cooperatives as a catalyst for balanced, inclusive, progressive and sustainable Malaysian socio-economic growth. A total of Five Thrust Areas was established under the policy. Namely, Application of Shared Prosperity Values, Strengthening the Legal System and Governance Structure, Strengthening Talents and Human Capital Development, The Creation of a Sustainable and Sustainable Business Environment; and Empowerment of Parent Bodies and Delivery Systems

With the initiatives outlined under the 12MP, the Government is optimistic that the cooperative movement will be able to help the country achieve the goal of the National Entrepreneurship Policy 2030 (DKN 2030) which is that Malaysia becomes a Superior Entrepreneurial Nation by 2030 with cooperative income worth RM100 billion.

BT: How can Cooperatives be seen to assist the Government in improving the country’s food security as well as to help control the increase in prices of goods, especially food products?

 Based on the current cooperative movement statistics (June 2021) of 14,657 cooperatives have been registered with a total membership of 7.04 million people and a strength of share capital/fees of RM16.336 billion and total assets of RM152.16 billion, the cooperative sector is seen to be a major player in helping the government controls the price of goods.

Basically, the cooperative movement has a large purchasing power, able to be competitive through a well -organized infrastructure and a comprehensive business network as well as a strong and diverse source of human capital by prioritizing the principle of inclusiveness.

I also think the cooperative institution is quite unique in contrast to a regular company. This is because of the principles and concepts practiced in the cooperative itself where the main objective is not merely profit but also safeguarding the interests and welfare of its members. The principle of democracy in a cooperative show that all members have equal voice and rights in determining the rise and fall of a cooperative.

As announced by the Prime Minister recently, the selection of the cooperative sector as one of the mediums to fight against “middlemen” by playing a more significant role in strengthening the country’s food security agenda is very right. Thus, a fund of RM100 million has been allocated to cooperatives through SKM to develop the agro -food industry, especially poultry farming.

The four agricultural sub-sectors that will be focused on are livestock (poultry, cattle and goats, vegetables and fruits, fisheries and aquaculture as well as paddy and rice. In addition, this program will also be mobilised in strategic collaboration with the Ministry of Agriculture and Agro-Based Industry (MAFI). 

It is clear that the Government’s intention to choose the cooperative sector to dominate the value chain system and at the same time play a role in improving the country’s food security as well as helping the Government to control the increase in prices of goods is accurate and relevant.

BT: What is Tan Sri’s hopes for Cooperative Movement in the country since they have reached the milestone of 100 years?

My hopes are the cooperatives will attract from Malaysians to join and eventually provide higher returns to its members, perhaps even in the region of 10-12%. Cooperatives should also be seen beyond its current role of just encouraging entrepreneurship in the rural community but also an agency that play a bigger role in the import and export arena. 

Under the rebranding of all cooperative outlets as COOP, these centres can start becoming major players in importing poultry or other food stock for instance. They can eliminate the need for middlemen and sell the goods much cheaper than other retailers.

As SKM, the agency with has its own Act and under the administration of the King is acknowledged for its role is assisting Cooperatives and their activities. The cooperatives of today have evolved and gone beyond just issuing dividends or supporting its members, they have contributed in education, CSR and even in religious affairs. These are recognition that need to be admired and noted, as the efforts must be encouraged and continued in the coming years. 

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