The UAE’s Ministry of Economy has joined forces with the International Co-operative Alliance — the largest global co-operative organisation — to boost the performance of the country’s co-operative sector and increase its contribution to the national economy.
The agreement will help raise the work environment in the country's co-operative sector to new levels, Abdullah Al Saleh, undersecretary of the Ministry of Economy, said.
Under the partnership, joint actions will be taken to contribute to the development of “flexible and proactive legislation” that will empower the co-operative model and regulate its governance.
“The co-operative sector plays a pivotal role in achieving the UAE’s sustainable economic and social development goals and is an important asset to the competitiveness and diversity of the national economy,” Mr Al Saleh said.
In February, the UAE Cabinet approved a decision to let co-operative associations trade their shares on the local financial markets.
Listings will allow co-operatives, which are primarily supermarkets and retail businesses, to raise new capital from outside and expand their portfolios. Access to capital markets will also boost the co-operatives' contribution to the national economy, improve their competitiveness and help the industry profit.
Mr Al Saleh said the UAE is one of the first countries in the region to allow the regulation and trading of co-operative shares in its financial markets.
“We continue our efforts today to complete the co-operative sector development strategy in order to enable the sector to take its rightful role as one of the drivers of diversity, sustainability, innovation, high productivity and transition towards a future economy in the UAE,” he added.
Under the strategy, the ministry will help train the entities that supervise the co-operative sector and will educate them about the latest international practices and methods.
It is also set to launch a joint committee with the membership of co-operatives, as well as federal and local entities that supervise the sector, to oversee the implementation of the strategy, in collaboration with the Ministry
The UAE had 42 co-operatives with 200 branches operating across the country, with a total capital of more than Dh3.1 billion ($840 million) and net profit of Dh1bn as of the end of 2020, state news agency Wam said.
The country intends to increase their contribution to the gross domestic product to more than 5 per cent by 2031 from less than 1 per cent in 2018.
“Through this agreement, we aspire to provide the UAE’s co-operative sector with the highest international practices, following the footprints of leading examples from countries all over the world,” said Balasubramanian Iyer, regional director of the alliance, on behalf of the ICA.