Forum focuses on collective economy

February 02, 2024 | 19:00
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On February 2, 2024, the Forum on Collective Economy and Cooperatives with the theme "Completing the State's supporting policies according to Resolution No.20-NQ/TW - A motivation to promote collective economy and cooperatives in the new period" took place under the chairing of Prime Minister Pham Minh Chinh.
Research on credit packages specifically for the collective economy sector: PM
Deputy Minister of Planning and Investment Do Thanh Trung

Deputy Minister of Planning and Investment Do Thanh Trung said that one of the core tasks of Resolution 20 was to amend the 2012 Law on Cooperatives with specific policy groups to improve policies of encouraging and supporting collective economic development. These have been specified in the Cooperative Law (amended) that was passed by the National Assembly (in 2023).

"Some outstanding new points of the Law include eliminating regulations that hinder market entry, expand the market, and improve the mobilisation of capital as a motivation for cooperatives development; completing and improving the efficiency of cooperative management and administration; expanding types of collective economy and improving regulations; and improving the effectiveness and efficiency of state management in collective economy," Trung said.

Chairman of the Vietnam Cooperative Alliance Cao Xuan Thu Van said that in 2021-2023, over 71 per cent of newly established cooperatives had young founders (aged 27-40), who were enthusiastic with skills in entrepreneurship, technologies and resources such as human resources, capital, and credit.

"Some new services and commerce models that meet the capabilities and strengths of members to suit market needs have been developed to contribute to local socioeconomic development," Van said.

Minister of Agriculture and Rural Development Le Minh Hoan said that they were implementing a pilot project on building standard agricultural and forestry raw material areas for domestic consumption and export in 2022-2025 across 14 provinces.

"In 2022, in 13 provinces with raw material areas, localities have supported the establishment of 70 new agricultural cooperatives and 1 union of cooperatives, raising the total number of agricultural cooperatives in raw material areas in 13 provinces to 320 cooperatives," Hoan said.

"The Ministry of Agriculture and Rural Development is currently developing a project on 1 million ha of high-quality rice in the Mekong River Delta that will support 937 cooperatives participating in the rice chain in the region."

Research on credit packages specifically for the collective economy sector: PM

Shawn Steil, Canadian Ambassador to Vietnam said that cooperatives were an important vehicle for mobilising entrepreneurship and ensuring on one is left behind.

"Cooperatives generate jobs and growth. For example, in 2021, there were more than 5,600 active non-financial cooperatives in Canada. They held $47.3 billion in total assets, employed 100,755 people and paid $2.7 billion in salaries and wages," he said.

The ambassador pointed out some witnessed challenges to the cooperative sector globally and in Vietnam related to access to capital; building and maintaining good infrastructure (whether it is processing, storage or distribution); scaling up to remain competitive and sustainable; and keeping the membership truly engaged.

"Legal recognition of the socioeconomic value of cooperatives is crucial. It is really well accomplished in Vietnam with the issuance of Resolution 20 and revision of the 2023 Law on Cooperative," he said.

He also suggested lower corporate income tax rates for cooperatives, and mandatory contributions to a social fund or cooperative federations to provide services and capital to cooperatives to enable their success and increase their impact.

Deirdre Ni Fhalluin, Irish Ambassador to Vietnam, recognised the importances of cooperatives and the need to provide a modern legal framework to help the cooperative sector grow.

"At the end of 2022, the Irish government agreed to commence drafting a new cooperative societies bill to modernise existing provisions for this sector. This bill - when finalised - aims to introduce modern corporate governance, financial reporting and compliance requirements, thereby making cooperatives more attractive to investors," she said.

Prime Minister Pham Minh Chinh said that Vietnam's collective economic sector had not yet developed as expected and required.

"The growth rate of this sector is only half the overall growth rate of the economy. The proportion of the collective economy sector and cooperatives in the country's GDP is decreasing on-year, (from 8.06 to 3.62 per cent in 2001-2020," the PM warned.

He said that the collective economy and cooperatives must change drastically in both thinking and action with the application of modern sci-tech, green transformation, digital transformation, circular economy, knowledge economy, and sharing economy.

All quantity and quality of members and workforce; the efficiency of capital use, labour productivity, linkage in value chains, supply chains, and production chains should be improved.

Therefore, the PM requested the Ministry of Planning and Investment to complete the master plan on collective economy development in 2026-2030.

The State Bank of Vietnam will have to research and improve regulations on internal lending in cooperatives and cooperative unions to support employees and cooperative members in eliminating 'black' credit in agricultural areas.

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