Robust cooperatives Backbone of economy

NARAYAN P ARYAL

Though the cooperative form of business organization began during the Industrial Revolution, throughout human history people have been working together for their mutual benefit. In those days, cooperatives were useful for promoting the interests of the less powerful members of society like workers, farmers, consumers, and producers. They found that they could accomplish their needs more collectively than individually. The main theme of the cooperatives is “all for one and one for all”.

Nowadays, cooperatives are known as private business organizations formed to meet the specific objectives of the people. These organizations are owned and controlled by the people who use their services, products, or supplies. Cooperatives have become very effective tools for the mobilization of hidden social capital in a more efficient manner. This sector has been considered the backbone of social economy. There is the possibility of establishing all kinds of industries through cooperatives. It is realized that cooperative are the only sector which could contribute to economic, social, and cultural development of the nation through enhancement of industries based on this system.

The world cooperative movement is more than two hundred years old. About three billion people residing throughout the globe are now incorporated in cooperatives. Realizing the importance of this sector, more than half a million cooperatives are formed in India. Ninety nine percent of Indian villages and seventy one percent of the total rural households are covered by cooperatives. The cooperative style of working has been a part of the life of Indian people. Some of the cooperatives are so strong that they have deposits of more than five billion rupees and are working in the sector of big infrastructures like airport, technology transfer etc. Cooperative institutions are functioning in all the spheres of socio-economy in India.

The General Assembly of United Nations (UN) held on February 2010, has declared 2012 as the International Year of Cooperatives, highlighting the contribution of cooperatives to socio-economic development, particularly their impact on poverty reduction, employment generation and social integration. The UN has declared this year with a high-valued theme of “Cooperative Enterprises Build a Better World”. According to the UN, this year seeks to encourage the growth and establishment of cooperatives all over the world. It also encourages individuals, communities and governments to recognize the agency of cooperatives in helping to achieve internationally agreed upon development goals.

Though, we have the tendency of working collectively for mutual benefit since the very beginning, only a sixty years long history of cooperatives in Nepal is found. The Department of Cooperatives was established in 2010 B.S. for the promotion, development and monitoring of this sector. “Bakhan”, an organization established in Chitwan in 2013 B.S., was the first cooperative in Nepal. Though we can find thousands of cooperatives established in the regime of Panchayat, they lack meaningful participation of the people and effecting monitoring. After the establishment of democracy in 1990, people were encouraged to form cooperatives for the accomplishment of their needs. The Interim Constitution of Nepal, 2007, has given high priority to the contribution of cooperatives in socio-economic development. Article 35(2) of the Constitution has stated that the state shall pursue a policy of developing the economy of the country through governmental, cooperative and private sectors. Through the documents like periodic plan and annual budgets, the Governments have accepted the cooperatives not only as the backbone of economy but also as one of the most viable pillars of Nepalese economy and development. Though the trend of establishing cooperative organizations is increasing, the part of monitoring and evaluation is very weak. The newly established Ministry of Cooperatives and Poverty Alleviation is trying to grasp a right track. The Department of Cooperatives lacks trained, competent and committed personnel. Due to the political intervention, inadequacy of resources and lack of committed leadership, National Cooperatives Development Board is unable to perform to the extent it could. The primary cooperative organizations and their different associations are not interested in following the basic principles of cooperatives. A kind of anarchism could be observed especially in the organizations active in the field of saving and loaning. Because of the unusual tendency of violating the prevailing cooperative laws, the sector is attacked regularly with severe type of criticisms, which is demoting its value too. It is also politicized in an immensely like the other sectors of development. This sector lacks appropriate laws, effective enforcement of existing laws and a separate cooperative policy which are very crucial. Though integrity and commitment are awesome, we lack both of them. From the realistic analysis it is clear that if we don’t work aggressively through the right pathway, it will take long to establish the cooperative sector as the real backbone of Nepalese economy.

The writer is with Ministry of Cooperatives and

Poverty Alleviation