By Ahmad Hajaji (With photos) KUWAIT, Sept 5 (KUNA) -- Dominating up to 70 percent of the country's retail trade, co-operative societies are believed to play an essential social and economic role in Kuwait.
A Co-Op is a huge trade complex that includes a central market where the family can find all their needs in each residential area.
Affiliated to the central market are shops and offices that offer various services a Kuwaiti citizen or a resident badly needs, such as bakeries, snack restaurants, flight booking offices, bookstores, bank branches, auto spare parts, and much more.
Kuwait has about 50 co-ops, affiliated to which are 70 central markets and about 3,000 sub-markets offering their services to more than 2.5 million Kuwaitis and residents.
"Cooperative work in deeply rooted in the Kuwaiti character," Undersecretary of the Ministry of Social Affairs, the authority in charge of the co-ops, Mohammad Al-Kandari told KUNA.
According to Al-Kandari, the direct and indirect support by the state is a chief reason for the co-ops' success. Another factor is that they are built within residential areas so people can easily attain their needs at reasonable prices.
"In addition, people feel that they own the society ... no society is founded unless there are the shareholders who manage it through an elected board," Al-Kandari said.
One significant aspect of Kuwait's co-ops is that they allocate 25 percent of their annual profits for social activities in the local area such as organizing Hajj and Ommrah trips, offering schools and hospitals some of their needs, and providing computer and Quran recitation courses, besides sponsoring youth activities.
One leading project by the country's co-ops has been setting up a specialized cardiology hospital with total cost of KD 15 million (USD 53 million).
According to statistics by the Ministry of Social Affairs and Labor, co-ops shareholders hit 443,000 in 2005, almost half the country's population (million people).
Every year one third of the society's board members is re-elected.
Moreover, co-ops are considered important civil society institutions.
"It happened one day that half the members of the Kuwaiti National Assembly (Parliament) were once co-op board members," Al-Kandari said.
In 2005, co-op sales hit KD 442 million (USD1,547 billion), about 70 percent of the country's retail trade. Net profits then reached KD 45 million (USD 157.5 million).
"The bulk of the co-op profits is not realized through trade but through the interest over the deposits they own besides hiring out some of their areas and shops they own," he said.
The most important reason for the success of the co-ops in Kuwait is that the state does not interfere in their affairs, Chairman of the Union of Consumer Cooperative Society Mohammad Amer Al-Mutairi said.
"A further corroboration for the success of the co-ops in Kuwait is that the Union was elected secretary general of the Arab Cooperative Societies Federation," he added.
Al-Mutairi expected that the Kuwaiti co-ops sales would hit KD 800 million by the end of the year (USD 2.8 billion) and to exceed KD billion in 2009.(end) ahj.msa KUNA 051048 Sep 07NNNN