Seoul fosters cooperatives to boost local economy

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Seoul fosters cooperatives to boost local economy

The Seoul city government will support citizens who are interested in establishing cooperatives as a measure to revive the regional economy and create more jobs.

Mayor Park Won-soon from the Seoul Metropolitan Government held a press briefing yesterday at City Hall in Jung District, central Seoul, and presented a master plan to foster the establishment of cooperatives to media.

A cooperative is a small-sized company that can be established with at least five people. Each member of the cooperative has a vote in every management decision, thus guaranteeing more stable rights to members than workers in private companies.

Even though a cooperative experiences money problems, it can generally keep the number of workers by reducing its members’ wages rather than firing people. Spanish football club FC Barcelona, which is owned by its 175,000 cooperative members, is an example.

The plan says: to give methodical education and consulting support in establishing cooperatives in order to foster them as a competitive business; to create an environment where those cooperatives can survive; to support seven business sectors, including child care service and traditional markets, as well as health care service that can vitalize the city’s local economy.

“Creating more cooperatives can contribute to reducing the economic gap among citizens as it can create a number of stable jobs, and it is more stable than running a private business,” Park said in the briefing.

“We will expand the number of cooperatives up to 8,000 in the next 10 years. We expect that the economy of cooperatives will amount to about 14.37 trillion won [$13.22 billion], about 5 percent of Seoul’s gross regional domestic product.”

The city government will bring the ordinance to the Seoul city council as early as next week to implement the project.

“We will open total support centers in May for the citizens who are interested in establishing cooperatives in order to give them detailed support from the processes of establishment to operation, including management and marketing,” Park said.

The city government will raise up to 50 billion won that is necessary for the project in cooperation with other government agencies and private corporations such as the Korean Federation of Credit Guarantee Foundations, Nonghyup (the National Agricultural Cooperative Federation) as well as the Korean Federation of Community Credit Cooperatives.

It will provide a maximum of 180 million won to those who are establishing a cooperative after verifying applications.

“We judge that citizens could benefit and also have more jobs if more cooperatives are established,” the mayor said.


By Kwon Sang-soo [sakwon80@joongang.co.kr]

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