An expert says that the poor regulatory environment in Indonesia has been a setback for the country’s cooperatives despite the fact that they have fostered people’s resilience during crisis.
Simel Esim, the program manager of cooperatives branch at the International Labor Organization (ILO)’s job creation and enterprise development department, said Tuesday that cooperatives had not been so popular in the eyes of people around the world, including in Indonesia, as many of them adopted poor regulatory management systems.
“If you are not properly regulating any institutions by, for example, conducting financial audits and reviews, there will be some mistakes, some of which may be unintentional mistakes while others are possibly intentional,” she told a workshop on cooperatives held by the ILO and the Cooperatives and Small and Medium-scale Enterprises Ministry at SME Tower in Jakarta to celebrate 2012 International Year of Cooperatives.
ILO data records that globally over a billion people have become members of cooperatives. The amount of turnover resulted from top 300 cooperatives has exceeded US$1.6 trillion. Those cooperatives also create over 100 million jobs worldwide. Financial cooperatives have served over 857 million people members, or 13 percent of the world population.
Esim said Indonesia was unlikely to have its “renaissance” of cooperatives unless it created a proper regulatory environment for the country’s cooperatives.
“There were cases affecting cooperatives in Indonesia and around the world caused by poor financial book-keeping which is not up to standard,” she said.
Adopting proper policies and regulations will be key to revitalize cooperatives in Indonesia. However, those policies also need to be continuously updated and upgraded. Providing cooperative staffers with proper training on management systems will be important as well.
“You need to give proper training for both cooperative auditors and the Cooperatives Ministry’s extension workers so they can have better capacity, not only in registering the cooperatives but also in working on the financial management system,” said Esim, adding that the ILO was promoting the “renaissance” of cooperatives in Indonesia by providing the guidelines it needed to revamp its policies and legislation on cooperatives.
According to the Cooperatives and Small and Medium-scale Enterprises Ministry, Indonesia now has 192,000 cooperatives with a total 32 million members.
Cooperatives and Small and Medium-scale Enterprises Minister Syarief Hasan said cooperatives had helped foster the resilience of Indonesian people during difficult economic times. Therefore, the government would continue to promote a conducive environment for cooperatives in the country.
“One of the simplest supports we are now providing is adopting easier procedures for establishing a cooperative. You may obtain a cooperative license without having to go through complicated procedures or visiting different offices anymore,” he said, adding that the government also continued to closely monitor the cooperatives’ performance.