Cooperatives told to get into business

Cooperatives told to get into business

JAKARTA (JP): Chairman of the Indonesian Cooperatives Council
Sri-Edi Swasono said yesterday the country's cooperatives must
become more self reliant to serve their members effectively.

Sri-Edi said cooperatives could empower themselves by buying
shares in related companies and developing partnerships with
them.

The tobacco and clove cooperatives had achieved a degree of
self-reliance by securing shares in cigarette companies, he said.

Sri-Edi said cooperatives were often seen as social welfare
organizations without a serious economic role. They must improve
their identity, credibility and leadership to improve their
image, he said.

Armed with these mechanisms of empowerment, he said, the
cooperatives would eventually become independent, commercially
successful enterprises which could compete equally with limited-
liability companies.

Sri-Edi said the cooperatives benefited from large networks
and grass-roots customer bases which could give them economies of
scale.

Former director general of cooperatives Ibnoe Soejono said
the cooperatives required a professional management system
similar to those abroad, instead of a heavy reliance on
cooperative management boards.

Ibnoe stressed this was important for Indonesia because it
faces competition with the realization of free market policies in
2003.

He said the country's 44,458 cooperatives with assets of Rp
6.4 trillion (US$2.7 billion), in 1995, required regular audits
and clearly defined guidance to make a transition to commercial
viability.

He said cooperatives in Thailand, Malaysia and the Philippines
were offered more education, low-interest credit and tax breaks
to raise their financial independence and, eventually, become
profitable enterprises. (01)