Deputy PM asks for strengthened support for collective economic development

Wednesday, 2017-12-06 10:59:06
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Deputy PM Vuong Dinh Hue (C) speaks at the teleconference. (Credit: VGP)
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NDO – Relevant ministries, sectors and localities need to continue bringing the Cooperative Law to life, with strengthened support and policy mechanisms to tackle difficulties and create favourable conditions for the development of new cooperative modes.

Deputy Prime Minister Vuong Dinh Hue made the above requirement while chairing a teleconference on December 6 with relevant central authorities and localities across the nation to review the implementation of the 2012 Cooperative Law.

The law was passed by the National Assembly on November 20, 2012 and officially took effect from July 1, 2013. After five years of implementation, the cooperative sector has made positive progress. Reports from the Ministry of Planning and Investment said that from 2013 to the end of 2016, 5,641 new cooperatives were established; only in 2016, there were 2,030 newly-established cooperatives, double compared to that of the end of 2013. In addition, the number of dissolved cooperatives was at 4,832.

As of December 31, 2016, the country had more than 19,500 cooperatives, up about 3.07% compared with December 31, 2013 and the cooperatives have increased in all three economic sectors namely industry-construction, agriculture and services, of which, agricultural cooperatives account for over 50%. The country has over 6.2 million cooperative members.

Of the total number of old cooperatives, 15,606 have to switch to the new operating model in accordance with the 2012 Cooperatives Law, of which 13,094 cooperatives have converted and re-registered, accounting for 83.9%. More than 2,000 cooperatives have not transacted under the law due to problems in property or debts.

After the transition, the cooperative activities have been improved, with 2016 average revenue reaching over VND3billion/cooperative that year, up VND498.3 million compared to 2013; the average profit of a cooperative increased from VND155 million in 2013 to VND196 million in 2016; average income of a regular worker in the cooperative increased from VND22.8 million to VND31.3 million/person/year. The cooperative sector contributes to about 4% per year to the country’s GDP.

The cooperative activities have been improved after five years of implementation of the law; however, there are still difficulties that need to be solved. (Credit: VGP)

Looking back on the five years of implementation of the law, the new cooperative model has initially shifted towards a higher quality and increase in income for employees. However, there are still difficulties that need to be solved.

According to the Minister of Planning and Investment Nguyen Chi Dung, in the market economy, small household businesses with fragmented production and non-standard goods will struggle to survive and joining cooperative is the optimal model in supporting households to develop efficient production and create an equal position with the other economic sectors in the market. The minister said that it is necessary to propagate and persuade people to participate voluntarily in the cooperatives. "Participation in cooperatives is an indispensable requirement to support the household economy towards developing sustainably and the ability to compete equally in the market economy," Dung affirmed.

Secretary of the Ho Chi Minh City Party Committee Nguyen Thien Nhan also asserted that it is a requirement for small household production to join cooperatives to increase income, as the difference of income between household businesses in and outside the cooperative is at 35%. At the same time, enterprises who want access to stable good sources with quality assurance cannot connect with all small production households, but rather through the cooperatives. Secretary Nhan also proposed to continue improving policies on credit and science and technology to boost the development of this economic component.

Deputy PM Hue said that the key criterion in evaluating the effectiveness of the new cooperative model is the economic efficiency of household businesses. The new type of cooperatives must be associated with the restructuring of agriculture and the construction of modern rural areas, he added.

The government official urged relevant authorities to promote the role of the Fatherland Front Committee and its members in the propagation of the law. Localities should focus on directing and orienting the implementation of mechanisms to tackle difficulties and obstacles for new cooperatives’ development, together with support policies on capital, taxes, and agricultural insurance for their sustainable development.

"New cooperatives need new thinking," Deputy PM Hue insisted, adding that it is important to raise awareness on the role of cooperative and cooperative economics, especially in agriculture, which is closely linked to the restructuring of the agricultural sector, the construction of new rural areas and sustainable poverty reduction.