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Official Gazette

Tuesday, November 29, 2022

Prime Minister highlights opportunities for cooperatives

Updated: 09:00’ - 16/02/2022
Chairing a conference on the collective economy and cooperatives, Prime Minister Pham Minh Chinh said the country had recorded important achievements after more than 35 years of "Doi moi" (Renewal).

These achievements have raised the position and stature of Vietnam, resulting in continuous economic growth.

The conference, held on January 15, aimed to assess 20 years' implementation of Resolution No. 13-NQ/TW on the collective economy, as well as 10 years' implementing the Law on Cooperatives.

Speaking to attendees, Minister of Planning and Investment Nguyen Chi Dung said small household businesses would struggle to survive amid the Fourth Industrial Revolution as they have low competitiveness. Dung who is also Deputy Head of the National Steering Committee for the Development of the Collective Economy and Cooperatives, said the Party, State and the Government of Vietnam issued guidelines and policies to promote collective economic development and cooperatives.
The national online conference on the collective economy was held on Tuesday__Photo: Duong Giang

For further development of the collective economy and cooperatives, the participation of society was needed. Heads of ministries, branches and localities must be fully aware of the spirit of the Resolution, as well as the role and position of the collective economic sector and cooperatives in national socio-economic development, Dung said.

“Cooperation is inevitable for mutual development,” he said.

Over the past 20 years, along with the process of economic renewal and international economic integration, the collective economic sector underwent different stages of development with advantages and challenges, Dung said.

He added that the most prominent change was the shift from the inefficient cooperative model to the self-responsible and autonomous cooperative model.

“The collective economic sector has partially overcome long-standing weaknesses, gradually innovating following market mechanisms, becoming the main contributor to the economy and ensuring social security and economic development of the country,” Dung said.

The transformation and reorganization of businesses in accordance with the Law on Cooperatives has been completed.

Newly-established cooperatives are mainly in the fields of agriculture, industry-handicrafts, commerce and services. They are concentrated in big cities, the Southern and North Central provinces and some Northern midland and mountainous province and the Central Highlands.

As of December 31, 2021, the whole country had 27,342 cooperatives, 2.5 times higher than in 2001. The cooperatives have nearly six million members and create jobs for about one million workers.

The average annual income of regular workers in cooperatives has increased, from VND 44.6 million in 2017 to VND 52.8 million in 2019, equaling 44.8 percent and 47.3 percent of the income of a worker in the private sector, respectively.

However, Dung said that after 20 years of implementing the Resolution, the collective economic sector made positive changes but it had not yet fully promoted its potential and it had not become a foundation of the economy.

For example, a number of objectives and tasks set by the Resolution had not been achieved or fully implemented. Specifically, the growth rate of the collective economic sector was still low and its contribution to GDP had decreased, failing to achieve the target set.

In the last 20 years, the growth rate of the collective economic sector and cooperatives was only about half that of the national economy. The collective economic economy contributed 8.06 percent to national GDP in 2001 and decreased by 3.62 percent in 2020.

Moreover, theoretical research on cooperatives was not systematic. Vietnam had few organizations that conduct in-depth studies or offer training on co-operatives as well as the effectiveness and contribution of the collective economy in the economy.

Only the contribution of cooperatives to GDP was calculated, not including the contribution of cooperative groups and cooperative members. The omission in the calculation of the collective economy's contribution to GDP led to a reduction in the role and position of the collective economic sector in the country's economy, Dung said.

After 20 years of implementing the Resolution, the organization of the state management apparatus of the collective economy has not met requirements.

Additionally, the legal framework and policies on co-operatives still have shortcomings that hinder development. For example, regulations and policies are not in line with the development of various types of collective economies. The country has not determined a management mechanism that could help ensure transparency and equality.

“The deepening participation in globalization and international integration with commitments to open markets for trade in goods, services and investment under bilateral and multilateral free trade agreements together with the Fourth Industrial Revolution has created opportunities and challenges for the collective economic sector and cooperatives,” Prime Minister Chinh said at the conference.

He emphasized that there were opportunities for the collective economy and cooperatives to thrive, especially those in agriculture.

“A large and experienced workforce, together with infrastructure, especially in rural areas, will be the foundation for promoting the application of advanced and modern technologies and production methods," he said.

“We have a domestic market with nearly 100 million people, the international market continues to expand after 17 free trade agreements were signed and negotiated. Moreover, we have many appropriate mechanisms and policies to attract investment, encourage innovative thinking, update new knowledge, boldly apply science and technology to improve productivity, quality, and efficiency and be deeply involved in the value chain,” Chinh said.

The PM said that it was necessary to study and complete a legal framework to identify the nature of cooperatives and types of collective economic organizations.

“The autonomy and self-responsibility of each cooperative must be promoted. Transparency and efficiency in management and administration of cooperatives must be improved to create motivation for the cooperative sector to develop," he said, asking for further attention to be paid to accounting and auditing issues and digital transformation to properly adapt to the Fourth Industrial Revolution and climate change.- (VNS/VLLF)

Minister of Planning and Investment Nguyen Chi Dung recommended eight groups of solutions for the collective economy to adapt to the rapid urbanization process, improve living standards and avoid potential risks.
  1. Unify and raise awareness about the collective economy because it is an indispensable requirement and objective trend in the process of developing a socialist-oriented market economy in Vietnam.
  2. Strengthen the role of Party committees and local authorities, the coordination of ministries, sectors and organizations in directing the development of the collective economy and cooperatives.
  3. Improve institutions; create a favorable legal environment for the development of the collective economy. Accordingly, the State manages cooperative economic organizations through laws and mechanisms and policies and does not directly interfere in the operation of cooperative economic organizations.
  4.  Strengthen the organizational structure of the state management agencies relating to the collective economy.
  5.  Promote innovation and improve the operational efficiency of collective economic organizations. It’s necessary to completely solve outstanding problems of the collective economy including long-standing debts in cooperatives. The relations relating to assets in old-style cooperatives, especially those related to land, must be solved in a transparent way.
  6.  Build new models of collective economy suitable to the context of the Fourth Industrial Revolution and international economic integration.
  7.  Strengthen international cooperation on the development of the collective economy.
  8.  Improve the roles and responsibilities of the Fatherland Front, mass organizations, associations, and the Cooperative Union at all levels in developing the collective economy and cooperatives.


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