Academic journal article Asian Social Science

The Contribution of Cooperative Law to Economic Development in Malaysia

Academic journal article Asian Social Science

The Contribution of Cooperative Law to Economic Development in Malaysia

Article excerpt


Since the cooperative movement was first introduced in Malaysia approximately eighty five years ago, there is no doubt that it has had a positive impact on Malaysia's economic development. The characteristic of being community-centered and catering to those most vulnerable to economic vagaries has rendered cooperatives as valuable institutions in promoting agricultural development and trade, the creation of employment opportunities and in advancing the social and economic positions of societies in general. This paper evaluates the policies of cooperatives and their programs and performances in boosting the economy of Malaysia as well as investigates the function of cooperative societies in the growth of economic development. It concludes by stating that to be effective and successful, cooperative institutions must adhere to the principles and precepts provided for by the government as in the Cooperatives Societies Act 1993.

Keywords: cooperative law, economic development, cooperative organizations, cooperative legislation, challenges

1. Introduction

Co-operative organizations as they exist today have deep historical roots in the economy that go a long way back, and "the Rochdale Equitable Pioneers' Society" founded in 1844, has generally been recognized as the precursor to the modern co-operative movement. Most literature define cooperatives as independent and autonomous non-government organization founded, operated and managed by volunteer members to reach their common economic and social objectives. The "International Co-operative Alliance (ICA)", defines a co-operative in its statement of co-operative identity (ISCI) 1995 as, " autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise." (Othman, 2008).

The President of the United Nation's General Assembly, Nassir Abdulaziz Al Nasser, in opening the plenary session at the launching the 2012 International Year of Cooperatives themed "Cooperative enterprises build a better world" noted that "People must be at the centre of the social and economic development agenda" and that "No country can develop unless the people themselves are developed." (United Nations Launches 2012 International Year of Cooperatives, 2011)

Basically, enterprises structured on the cooperative principles of "self-help, democracy, equality, equity and solidarity" (United Nations Launches 2012 International Year of Cooperatives, 2011), contribute much to the reduction of poverty, help create employment opportunities, and enhance the process of social integration. In principle they abide by the belief in the traditional values of "openness, honesty, social responsibility and community caring" (United Nations Launches 2012 International Year of Cooperatives, 2011). Conducted properly and based on these tenets, cooperatives play an invaluable role developing equitable economic objectives. With its over 150-year history, the cooperative movement in many countries have in general succeeded in progressing the United Nations development agenda, as well as achieving the "Millennium Development Goals" (United Nations Launches 2012 International Year of Cooperatives, 2011) and 2012 was entitled "the International Year of Cooperatives by the United Nations". The "International Year of Cooperatives" provided the "opportunity to raise public awareness of cooperatives, promote their formation and encourage governments to establish policies" (United Nations Launches 2012 International Year of Cooperatives, 2011) favorable to their development. Cooperatives have been recognized as having "lifted millions out of poverty with dignity", and have proven their ability to compete effectively with other business enterprises and economic forms. There is much evidence that cooperatives have had a significant impact on the environment, banking, agriculture and other areas in many countries. …

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