Hanoi to boost performance of cooperatives

10:32 | 18/06/2019 Economy- Society

(VEN) - More than 15 years after the Central Party Committee issued a landmark resolution on renewal and development of the collective economy, cooperatives in Hanoi are operating effectively. They have made important contributions to poverty reduction and socio-economic development in the city and to agricultural and rural restructuring.

hanoi to boost performance of cooperatives
A high quality rice growing model in Thanh Oai district, Hanoi - Photo: hanoimoi

Cooperative leader

Hanoi currently has the biggest number of cooperatives in Vietnam, accounting for 9.9 percent of the total number of cooperatives in Vietnam. Hanoi currently has 1,867 cooperatives and people’s credit funds. The total capital of cooperatives exceeds VND13.5 trillion, a 380 percent increase against 15 years ago. The total asset value of cooperatives exceeds VND2.5 trillion. The average profit is VND168 million/year/cooperative, an increase of 175.41 percent compared to 2003, when the resolution took effect.

Since 2003, and especially since the Cooperative Law took effect in 2012, cooperatives have strengthened the organization of their management apparatus. Some cooperatives have registered production according to food safety standards, using environmentally friendly technologies for production and processing. Many cooperatives operate effectively, building models with high economic value, such as Dan Hoai Cooperative, Thang Long Hi-Tech Agricultural Development Cooperative, Hong Thai Fruit and Vegetable Cooperative, Red River Agricultural Cooperative, and Da Ton General Service Cooperative.

Beside the achievements, however, challenges persist. More specifically, the number of cooperatives and the total number of production and business households in the collective economic sector are still small and their average income is low compared to other economic sectors. The number of cooperatives with capital of less than VND5 billion is still high, about 76.6 percent. Some cooperatives are slow to adapt to market mechanisms and urbanization, offering limited supplies of goods. Some cooperatives exist only by name and have not been reorganized according to the 2012 Cooperative Law.

Varied development models

According to Nguyen Quoc Hung - Vice Chairman of Hanoi People’s Committee, Hanoi will develop its collective economy using diverse forms and base it on the application of science and technology, improved management, production and business. The goal is to develop high value-added products, services and traditional key products.

By 2025, the city will strive to establish an additional 250-300 cooperatives, and two cooperative unions. It also plans to ensure that all cooperatives operate under the law and that 70 percent of cooperatives preserve their capital and make profits, with the rate of these to increase to 90 percent by 2030.

Deputy Head of the Central Economic Committee, Cao Duc Phat, emphasized that Hanoi continues to adjust and supplement new policies to encourage and support the collective economy. Cao Duc Phat added that Hanoi will propose more specific policy recommendations and amending the law on collective economic development, especially the issues related to land and finance.

The number of effective cooperatives has increased over the years, from 46 percent of the total number of

cooperatives in Hanoi in 2003 to 60 percent in 2018.

Lan Anh