'Cooperatives need to focus on profits'<\/p>\n
JAKARTA (JP): Cooperatives need to focus their operations on
\nmaking profits rather than on social ends in order to increase
\ntheir contribution to the country's economic development, experts
\nsaid on Saturday.<\/p>\n
\"Cooperatives, which are expected to operate as the backbone
\nof the country's economy under the Constitution of 1945, have
\nplayed a minor role in the economic development because they have
\nplaced too much emphasis on their social missions,\" the director
\nof Trisakti University's Postgraduate Program, Thoby Mutis, told
\na seminar.<\/p>\n
He said that the names of cooperatives, referring to women,
\nyouths, Islamic schools and the Armed Forces, for example,
\nindicated that they were more socially-oriented than profit-
\noriented.<\/p>\n
Dawam Rahardjo, director of the Postgraduate Program of
\nMuhammadiyah University in Malang, East Java, told the seminar
\nthat the role of cooperatives in economic development over the
\npast 25 years had been greatly overshadowed by the contribution
\nof both private and state-owned companies.<\/p>\n
He said that statistical data indicated that in 1994 the total
\nnumber of cooperatives in Indonesia was about 44,000, with 25
\nmillion members.<\/p>\n
Dawam said that, compared with cooperatives in Japan, which
\ncan provide loans to companies, Indonesian cooperatives were
\ngenerally concerned with merely peripheral businesses.<\/p>\n
Interest<\/p>\n
A former director general of cooperatives, Sularso, told the
\nseminar that cooperatives should operate, not only for the
\ninterests of their members, but also for the interests of
\ninvestors, management and customers.<\/p>\n
He said the government's policies favoring the development of
\ncooperatives had made them inefficient and less competitive than
\nother business institutions.<\/p>\n
The government has required state-owned companies and
\npublicly-listed firms to set aside up to five percent of their
\nnet profits for the development of cooperatives, while
\nconglomerates have been required to sell part of their shares to
\ncooperatives at nominal prices with payments taken from their
\nfuture dividends. Commercial banks, meanwhile, have had to
\nallocate a minimum of 20 percent of their loans for cooperatives
\nand small businesses.<\/p>\n
Sularso said the government had provided additional privileges
\nto cooperatives in the form of monopolies over certain goods,
\nincluding cloves and fresh milk.<\/p>\n
\"Such policies extending to cooperatives monopolistic rights
\nmay invite protests from other countries because they are
\nregarded as non-tariff barriers which are against the principles
\nof the General Agreement on Tariffs and Trade (GATT),\" he said.<\/p>\n
He said that, under GATT, such policies should be gradually
\nabolished over the next 10 years. (kod)<\/p>",
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