The foreign bureaucrats drafted the cooperative laws in colonial Asian countries. As in the case of UK, Germany, and other European countries, cooperatives and cooperators were not involved. Thus, in the framing of cooperative laws the main consideration was: “what is ‘good’ as considered by the rulers, and not by the members or the people”. The cooperatives looked towards the Government Departments and not to their members for guidance and working procedures. The post of Registrar, copied from the United Kingdom, under the Friendly Societies Act and later on under Prudence and Industrial Society Act, was concerned with the registration and dissolution of cooperative societies, and collection of annual returns of their activities only. In Margaret Digby's “Agricultural Cooperative in Commonwealth” about the enactment of Cooperative law in India it is stated: “It soon became apparent, however, that in a country like India, where rural leaders were few, and over 90 percent of the population was illiterate, the Registrar would have to do more than record and correct. Registrars and their staff would initiate, educate, organize and supervise, and both their numbers and importance was to be greater than had been anticipated from the study of European models”. This was the British argument or excuse to change the spirit of English Cooperative Law in India.
Mr. Asnavi Hassan in “Development of Cooperative Legislation in Indonesia” states: “The Netherlands Indies Government suspected the cooperatives as an organization which could be utilized as a political level and encourage the people to live independently in the economic field and not on the colonial government”. Thus the Registrar was called “the Friend, Philosopher and Guide” and no cooperative could afford to go against his wishes. Under these laws there is no obligation on the society to deal with members only, as is the case in Japan and Australia. In Japan, a cooperative can do business with only members and only to a limited extent business with non-members is permitted under the cooperative law. Similarly under the Australian federal law on taxation if the business in a cooperative is less than 90 percent from member driven no tax benefits are given.
Thus in the first half of the 20th century colonial governments in most countries in Asia tried to control local cooperative leadership and people. No faith was put in state favoured leadership and in the Government, the growth of cooperatives remained rather slow. In Japan and South Korea during Second World War cooperatives were replaced by farmers associations and here too agricultural cooperative were set back.
The situation changed considerably in the second half of the present century when most countries got freedom and national governments took over. Practically in all countries cooperatives were considered as an instrument of bringing socio-economic development and particularly agricultural production and rural development. Governments provided liberal financial assistance and support to the cooperatives. In the process while the number of cooperatives and cooperative initiatives grew manifold, the cooperative movement suffered in quality terms. In many countries cooperatives lost their basic character and became more of a state agencies. In many countries cooperatives laws were modified to vest increasing arbitrary powers in cooperative department. The situation further worsened as these powers were used for the benefit of politician and bureaucrats. The Royal Commission on the cooperative movement of Ceylon in this regard stated the following:
“It is notorious and scandalous that cooperative societies and the cooperative movement
generally in Ceylon have been outrageously misused by certain politicians to serve their
own ends. In some places their machinations have gone far to undermine two levels of
organization. In many societies the politicians are in almost absolute control of the
movement with the result that non-political initiative and leadership have been pushed
into the background and silenced. In such a situation neither cooperators nor government
can play their respective roles properly and the whole system suffers.”
The above observations are relevant not only to Ceylon, but to a number of developing
countries in the region.
To define a solution to these unfortunate Asian paths of cooperative development and to work out a collaborative strategy for the growth of cooperatives in the right direction, the ICA-Regional Office for Asia and the Pacific (ROAP) decided to convene periodical conferences of Cooperative Ministers, Cooperative Leaders and UN agencies interested in the development of cooperatives. The first conference was held in Sydney in February 1990, and the conference made exhaustive recommendations. The subject of the role of government action towards cooperatives was again considered by the second Cooperative Ministers' Conference, held in Jakarta in February 1992. The Third Cooperative Ministers was held in Colombo in July 1994. Many important recommendations related to cooperative laws were undertaken at all three conferences.
