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Govt to provide legal backing for establishing, operating co-ops

The government has completed a draft of a prime ministerial decree, which aims to provide legal back up for the establishment and facilitation of farming and commercial groups in Laos.
As part of the legal document development process, the government has posted the draft of the decree on cooperatives on the National Gazette website, one of the government channels mandated to disseminate the contents of draft decrees, laws and other legal documents so that relevant stakeholders can provide feedback.
The participation of relevant stakeholders in the establishment of the decree, laws and government legal documents is one of the policy processes to help ensure effective governance.
According to the draft decree on cooperatives, its purpose is to provide rules and conditions on the establishment and operation of cooperatives. The government views the organisations serving as channels for farmers, traders and other professionals to help each other, share experiences, knowledge and resources to increase their production capacity.
On top of that, cooperatives will help farmers to access financial resources so they can expand their businesses as well as serve as a tool to ensure the protection of rights and interests of the group members.    
To establish a cooperative, a Lao citizen over 18 can propose the registration of a cooperative via the relevant authorities at district and provincial levels.
The proposal review process by technical staff should not take more than seven days while proposal approval by the district governor should be completed within five days.
If authorities reject the proposal, an official explanation must be provided within five working days. The validity of a cooperative licence is five years, according to the draft decree.
The cooperative founding committee must consist of three people with support from at least five members from different families.   To establish a cooperative with more than 10 members, a proper work venue must be declared and certified by the village authorities.
According to the decree draft, cooperatives could provide microfinance services allowing members to deposit and borrow funds for their business operations, expansion and development.
Under the draft of the decree, the government would only promote, not force people to establish cooperatives. For recruitment, members must volunteer to join.  
In the past, under Laos’ centrally planned economy, the country had a large number of collective farms. Under this economic system, each collective farm had to produce goods in accordance with the state plan.
The egalitarian distribution of income and benefits to group members led to poor productivity and the failure of collective farms. 


By Times Reporters
(Latest Update July 9, 2020)

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