Saturday, January 28, 2023 | Rajab 5, 1444 H
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A talk about cooperatives

Today, the government encourages investments and setting up of all sorts of cooperatives or public shareholding companies

There has been a lot of talk about setting up of cooperative societies in governorates and wilayats of the Sultanate of Oman recently. Everybody discussed their importance for the local communities and highlighted their role to promote local products. Comparisons were also made with the experiences of some other countries in the region.

Today, closed, or limited liability public companies can be established in the wilayats to manage hypermarkets or other businesses and work according to the objectives of the cooperatives which are successful with foreign investors who make huge efforts without any support.

Today, the government encourages investments and setting up of all sorts of cooperatives or public shareholding companies. This is with the vision to achieve progress in the governorates, strengthen investments there and set up private joint stock companies which are put for subscription by investors after some time. This is how national companies enter the retail market. All rules and regulations make way for this. There are no obstacles in the way. Perhaps there is a control system for joint stock companies in place which makes governance of such cooperatives more dynamic when it comes to managing assets and diversification of investments in supply and production chains. It makes local cooperatives a beehive of complementary, purposeful works of mutual benefits.

Lot of investments have been made in retail trade which achieve success and earn credibility and trust in the local markets. This is the approach which should be adopted at a larger scale to include wilayats. This is important so that there are companies which have specialisation in retail and operate hypermarkets and support shops in villages under one brand name. This can give opportunities to people of the country under a certain mechanism, auditing system and strong management. There are no hurdles in this.

Today, there are hypermarkets established by foreign investors spread everywhere in the country. They are either individual initiatives or cooperatives. They are successful. Such experiments can be made and hypermarkets are opened in all wilayats of the country in a competitive environment and freedom of trade and market economy.

Today, we want to enter into such activities by setting up cooperatives in which the government is also a partner. This is a contradiction which has surfaced after more than 50 years of practicing free economic system and encouraging investment and freedom of trade.

The system of cooperatives on which we are lamenting is not effective and successful in some countries in the region. It is not considered sound for commercial and trade practices. These cooperatives are more like charity organisations which offer prices lower than the markets or absorb products on the basis that they are national. These practices do not develop an economy and do not improve the products and services. Rather, such practices are like the worn-out socialist systems which have already been wrecked in the past as they were useless.

Of course, the government can provide facilities like investments, lands, waiver of fees, taxes and duties to private shareholding companies. But if it tries for partnerships in these cooperatives to practice trade, this is not the place or time for this at least now. We should seriously establish shareholding companies in various businesses and throw them open for subscription after a certain period as per rules and regulations.

We hope that some wilayats will start setting up such companies to work in the retail sector, operations of hypermarkets without waiting for cooperative societies to emerge. We should keep our eyes open and learn from others' experiences also. Repetition of the same experience which have already been done by others and which have led is not wise.

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