Let cooperatives grow undisturbed, chief Herlambang says<\/p>\n
By Rita A. Widiadana<\/p>\n
JAKARTA (JP): Today, Indonesians mark the 51st National
\nCooperatives Day in observance of the First National Cooperative
\nCongress in Tasikmalaya, West Java, on July 12, 1947.<\/p>\n
The cooperative's founding father, economist and first vice
\npresident Mohammad Hatta, stipulated the cooperative system was
\nthe most appropriate economic means to promote people's welfare
\nand living conditions.<\/p>\n
The cooperative system, originally adopted from the concept of
\nthe British Cooperative Wholesale Society in Rochdale, England,
\nwas modified in each country to adjust to its social, economic
\nand political conditions.<\/p>\n
Hatta believed cooperatives could counterbalance capitalism,
\nwhich he viewed as only benefiting a few of the ruling elite,
\nparticularly those who reaped riches from hundreds of years of
\nDutch colonial rule.<\/p>\n
After 51 years of existence, cooperatives are still struggling
\nto secure a strong foothold in the economy here.<\/p>\n
Chairman of the Indonesian Cooperative Council Sri Mulyono
\nHerlambang recently shared his views on the development and
\npresent activities of the Indonesian cooperatives. Excerpts:<\/p>\n
Question: Do you believe that Mohammad Hatta's ideas on the
\ncooperative system still hold potential in today's crisis?<\/p>\n
Answer: Absolutely. We are watching how the crisis has
\ncrippled business activities, dominated mostly by large scale
\nenterprises... In the past 30 years, policies generally favored
\nthese big companies, which relied mostly on foreign capital and
\nimported materials.<\/p>\n
...The government ignored the potential of small and medium
\nenterprises including cooperatives... Local conglomerates...
\nwere easily shaken up by the crisis because their business
\nfoundations were fragile...<\/p>\n
When the rupiah's value depreciated more than 80 percent
\nagainst the U.S. dollar, large Indonesian corporations were
\nburdened with mountainous debts, some bigger than their assets.<\/p>\n
On the other hand, cooperatives and other small and medium
\nbusinesses would likely survive more because they empower
\ndomestic capitals and local human and natural resources.<\/p>\n
Q: So, how are cooperatives dealing with the crisis?<\/p>\n
A: This is actually a good momentum for local cooperatives to
\nshow their teeth. Currently, the Indonesian Cooperative Council
\nhas registered its members to become major distributors of
\nessential commodities to secure the distribution of foodstuffs.<\/p>\n
Thousands of cooperatives across the country have been ready
\nto provide foodstuffs and other basic goods at lower prices.<\/p>\n
We also set up special programs for young and dynamic
\nprofessionals, especially lay-off victims, to work at
\ncooperatives.<\/p>\n
Some financial institutions have already provided low-
\ninterest loans and grants to be distributed to cooperative
\nmembers and those who badly need fresh capital to continue
\nbusiness.<\/p>\n
We have to prepare ourselves to take over many positions,
\nincluding the business distribution chains, currently left by
\nlarge corporations.<\/p>\n
Previously, we had little chance of doing such activities
\nbecause our business capabilities have always been underestimated
\nby many parties.<\/p>\n
Q: But why haven't cooperatives and small\/medium enterprises been
\nunable to play more significant roles despite tax leniency and
\neasy access to credit schemes, as well as partnerships with large
\ncorporations?<\/p>\n
A: It's true that the government has launched affirmative
\naction measures. For instance, it obliged state and private banks
\nto allocate 20 percent of their credits to small and medium
\nenterprises, but many cooperative members were unable to obtain
\nsuch credits for various reasons.<\/p>\n
State-owned companies have to allocate five percent of their
\nprofits to assist small and medium businesses, while private
\nfirms have to set up partnerships with cooperatives and small
\nbusinesses if they want to bid government contracts.<\/p>\n
Prominent conglomerates, known as the Jimbaran Group, also
\nagreed to help. In reality, such measures were difficult to
\nenforce because of the government's lack of consistency and
\ntransparency.<\/p>\n
Q: How were such measures ineffective?<\/p>\n
A: Some affirmative action programs to improve cooperatives and
\nsmall and medium businesses were theoretically excellent. But,
\nthere was no mechanism to control and monitor the programs.<\/p>\n
We discovered many irregularities in partnerships with state-
\nowned and private firms. In bidding for a government contract,
\nfor instance, large private firms had frequently chosen
\n\"inactive\" cooperatives as their silent partners.<\/p>\n
Unfortunately, we have also found many irresponsible
\ncooperative officials who abused opportunities for their own
\nbenefit. These officials have repeatedly received delivery orders
\nfrom big firms but they preferred to subcontract them in return
\nfor a small amount of fees.<\/p>\n
They are lazy people who use cooperatives as business tools.
\nThese are actually the persons who have tarnished the image of
\ncooperatives.<\/p>\n
Q: In certain ways, you cannot fully blame the government or the
\nprivate sectors for failing to accelerate the programs...<\/p>\n
A: ...Insiders are also responsible for hampering the
\ncooperative developments. We are now struggling to solve our
\ninternal problems, including lack of human resources and capital.<\/p>\n
Also, we cannot deny that many cooperatives here are not
\nmanaged professionally. Many are run by people lacking
\nentrepreneurship, management skills and integrity.<\/p>\n
Ideally, a cooperative should be both a social organization
\nand a business enterprise. In the past, a cooperative had always
\nbeen regarded as nonprofit organization, but time has changed.<\/p>\n
A cooperative must now grow quickly and professionally to
\nmatch the economic strength of state-owned and private companies
\nwithout ignoring its mission to improve the welfare of its
\nmembers and the people in general. It must also be strong enough
\nto actively take part in national development programs.<\/p>\n
Q: Is there any effort to improve the quality and the working
\nperformance of cooperatives?<\/p>\n
A: The Indonesian Cooperative Council has set up a joint program
\nwith Denmark's Cooperative Agency to train local cooperative
\nofficials...<\/p>\n
We are also working with cooperative councils from the United
\nStates, Canada, Australia, Vietnam, Malaysia and other countries
\nto set up a strong global marketing network.<\/p>\n
We are continuously convincing people that they can improve
\ntheir living conditions by joining cooperatives, and results are
\nquite encouraging.<\/p>\n
The number of cooperatives between 1993 and 1996 increased
\n15.5 percent, from 41,903 to 48,391, and membership has increased
\nfrom 24.65 million to 27.17 million.<\/p>\n
Assets have increased from Rp 3.57 trillion to Rp 6.58
\ntrillion, while turnover increased from Rp 9.5 trillion to 12.58
\ntrillion.<\/p>\n
Q: In this \"reform\" era, do you see any beneficial government
\npolicy?<\/p>\n
A: We are in a wait-and-see position. However, the new minister
\nof cooperatives and small industries (Adi Sasono) has started to
\nrevise old regulations, including the existence of village
\ncooperative units (KUDs) and it seems that the cooperatives and
\nsmall\/medium businesses would be given greater roles in the
\nnational economy.<\/p>\n
But, more importantly, the government should stop its
\nintervention in the operation of cooperatives. In the new order
\nperiod, the government's intervention made the cooperatives so
\nweak and dependent. It also created a fertile source of
\ncorruption and collusion among related parties.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/let-cooperatives-grow-undisturbed-chief-herlambang-says-1447893297",
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