Associations: Unaware of their economic potential

The association of hawkers is very active these days. It is fighting for the rights of its members, estimated at about two thousand. Other associations, like those similarly aim to promote their members’ welfare. However, in most cases, these associations are unaware of the economic power they can derive from their collective force. The Constitution of Mauritius guarantees the freedom to form associations. Freedom of association is the right to form, join and refuse to join an association. The country has about 14,000 associations registered with the Registrar of Associations, the public institution that governs associations. According to official figures, from January to March 2016, there were 119 new registered associations. Moreover, there are about 370 registered trade unions in the country. The associations are commonly called NGOs (Non Governmental Organisations).

Collective Projects

An association is a contract between a number of people who decide to pool their knowledge or activity to achieve a collective project for a purpose other than generating profits. There are various types of associations, such as voluntary associations, professional associations, etc. Voluntary associations are often engaged in social causes while professional associations seek to protect and promote the rights and interests of their members engaged in the same profession. Whilst most often, associations have no profit motive, this does not mean that an association cannot have lucrative activities (that is to say which allow it to make profits), but these activities and revenues generated only serve to finance the object of the association. To exist, organisations need financial resources. They usually seek the help of the state, individuals or businesses. Membership fees are not enough to meet costs. In Mauritius the government subsidises several types of associations, such as consumer associations or religious organisations. Other NGOs receive funding from private companies through the Corporate Social Responsibility (CSR). Each year, companies are required to pay the equivalent of 2% of their profits to non-governmental organizations recognized by the National CSR Committee. The various types of associations rather use traditional tools to ensure the interests of their members. For example, they seek the help and intervention of the state for funding, grants or incentives for them. Associations also often lobby the authorities in various forms, even resorting to hunger strike to further their cause. Yet, associations and other social groups could play a greater role and solve their problems themselves if they were better organised, more innovative and evolve with time. But there are also legal obstacles caused by the legislation governing associations that need to be updated. [[{"type":"media","view_mode":"media_large","fid":"16705","attributes":{"class":"media-image aligncenter wp-image-28243","typeof":"foaf:Image","style":"","width":"566","height":"318","alt":"marchands-ambulants"}}]]  

Economic policy

With the budget fast approaching, it would be interesting if the Ministry of Finance comes up with incentives to help NGOs and associations to further tap into their economic potential. Perhaps it is also time for donors to benefit from tax deduction to encourage donations. Social enterprises must be considered as a means of job creation. Associations and social enterprises must benefit from more banking facilities to finance their projects. Just like small entrepreneurs face less bureaucracy, associations and other NGOs should also be spared administrative burden in their day to day management.

Cooperatives

Cooperatives are entities that can open new horizons for their members, but innovation is still miles ahead. Fortunately, the government has decided to review the sector completely, starting with a review of the legislation in order to boost the sector. The objective is to engage cooperatives in new sectors such as bio-farming, aquaculture, and the green economy. Traditional cooperatives do not realise the opportunities available to them. They do not use their combined strength to make profits or further their interests. A simple example: Cooperative societies regrouping individual bus owners always complain of rising operational costs and often demand (and sometimes rightly) either subsidies on fuel, or a hike of bus fares. Yet these cooperatives could have easily made additional profits through huge savings if they had really been operating with a cooperative spirit. For example, they can benefit from economies of scale on the bulk purchase of tyres, spare parts and diesel. The cooperatives could also engage in parallel economic activities, such as providing maintenance services for buses and other vehicles, the import of their own buses, etc. There is already the example of cooperatives in the agricultural sector that import their own fertilisers. Similarly, if small cooperative breeders regroup and become more efficient, they could import their own cattle feed, which would cost them a lot lower than what they currently purchase on the market. Collective bargaining could also make them negotiate better prices from local manufacturers, but the situation is the other way round, where the suppliers impose their price!