SUSTAINED high growth for years is welcome, but the poor remains left behind, unless more teeth are imposed for reforms on fast-tracking cooperative organizing for the poor, thus empowering them to compete in the dog-eat-dog marketplace and share fairly from the benefits of growth.
• Cooperatives, key to poverty elimination. Increasing the economic pie solves half the problem, but distributing the pie fairly is the other half, which cannot be done the communist way through seizure of property or through dole-outs that only encourage dependence and demeaning mendicancy while distorting markets.
The only effective strategy is involving the poor themselves in increasing the pie through cooperativism, providing genuine empowerment and dignity.
• Without cooperatives, poor can’t beat market. As we end October as Cooperative Month, it is fitting to highlight cooperatives as the only organizational structure appropriate for the poor that’s both a manifestation of the means and ends of development.
Without cooperatives, the poor as mere individuals can hardly fend for themselves in the ruthless free market, where they get clobbered by unscrupulous traders. Traders have no loyalty to producers, being margin players, whose interest is to maximize profits, at least cost and least effort, and they wont hesitate to import than buy locally to profit more.
As individuals, farmers can never be efficient and competitive. They cannot afford mechanization, and it’s impractical to operate tractors on small plots. As cooperatives, however, farmers can afford better technologies, postharvest equipment, trucks and cold-storage facilities to bolster production, achieve economies of scale, benefit from the full value chain and engage competitively in direct marketing.
• Co-op entry barriers too stringent. While it takes a day or two to get registered with the Securities and Exchange Commission (SEC), it takes six to 12 months to get registered with the Cooperative Development Authority (CDA) as experienced by jeepney groups.
Getting a seminar schedule alone takes two to three months, after CDA declared earlier that all seminars be handled by CDA itself, and no longer by the cooperative development offices of local government units.
Other barriers include the unrealistic “economic survey-business plan” requirement; uniform but required committees that are not functional, more so for start-ups and ironically also because there are 21 types of cooperatives demanding different types of committees.
• Simplify the complex. The CDA can learn from SEC, which approves registration in one to three days, and requires pledges of undertakings for future accomplishment, if there are remaining minor corrections or pending requirements.
Decades back, I met an American businessman, whose business in the United States only took him $11 and three minutes to get registered, but took him nine months in the Philippines, as he was required ridiculous unnecessary details.
We need not simplify too much, but just get rid of unnecessary redundancy. For transport groups, practical seminars on maintenance, running vehicle-service centers, supply parts business, etc., and how to access the Bangko Sentral ng Pilipinas’s concessional noncollaterized financing called Credit Surety Fund are more important. Seminars can be programmed after registration.
• PUJ modernization’s success rests on cooperatives? Success of the public-utility jeepney (PUJ) modernization rests much on cooperativism for many reasons, which I can’t all explain here. Cooperatives enjoy tax exemptions, thus a 12-percent value-added tax exemption on a P50/liter diesel alone means savings of P6/liter, or what Piston earlier demanded in fuel discounts.
Laudable are the initiatives of even less-known groups like Taguig Transport Cooperative, chaired by Fredie Hernandez, that embraced jeepney modernization, despite the expensive P2.4 million mini-bus. His cooperative was awarded 279 units with 30 so far delivered.
Interest is 6 percent and amortization is P1,300, which is manageable as, on top of the 23 seats, it can take as many as 17 standing passengers, thus maximizing revenues. With aircons, they charge a higher minimum fare of P10, similar to FX/AUV. The group also welcomes modern maintenance systems, which can generate 10 to 30 percent in fuel savings.
• Molar support from Ubuntu lore? As more teeth are needed in policy reforms, I guess cooperatives need more molar support.
Perhaps, it is worth learning from Ubuntu, African lore, that “we can never be happy, if others are sad,” which was discovered by an anthropologist after Ubuntu African children refused to play a “winner-take- all game,” but instead cooperatively joined hands to take and share the reward together.
E-mail: mikealunan@yahoo.com