KANO STATE POLYTECHNIC

SCHOOL OF MANAGEMENT STUDIES

DEPARTMENT OF COOPERATIVE AND ECONOMIC MANAGEMENT
Course: Introduction of Economic Cooperative
Group “B” Assignment
By
ND II
S/NO NAMES REG. NUMBER
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.

QUESTION:

1. Discuss the role in development cooperative

2. Discuss the role in economic development
3. Discuss the role of foreign investment in development economic

1
Discuss the role in development cooperative

Cooperative Society is an organisation formed to provide financial assistance to its

members. The members are responsible for raising capital to help those in need. It mainly

protects the weaker sections within rural communities from exploitation by wealthy

individuals and companies. Our rural economy needs faster and more sustainable

development to cater to the needs of its population. The Cooperative Societies have a

responsibility to play a constructive role in this area.

The role in development cooperatives can be very significant and beneficial for the rural

economy. We will discuss their role in the below paragraphs:

 Provide credit facilities – Cooperative societies can help their members –

individuals or small businesses – in rural areas with financial assistance. Credit

Cooperative societies are involved in disbursing loans at low rates of interest and

flexible repayment terms. The role of cooperatives in rural development is crucial

as they protect their members from private moneylenders who give loans at very

high-interest rates. Credit cooperatives rarely raise large amounts of capital due to

the limited financial resources of their members. However, they play a vital role in

sustaining the viability of both agrarian and non-agrarian occupations in a rural

economy.

 Housing facilities for lower-income groups – Housing cooperative societies in

rural areas assist their members in getting a place to live. They are primarily

2
 involved in helping people from lower-income groups get housing facilities at

affordable rates.

 Help consumers get affordable products – Several Consumer Cooperative

Societies help rural households get products at relatively cheaper rates. They

purchase products directly from the manufacturer and sell them to their members

below market price, thus removing the involvement of intermediaries. Anyone

who wants to buy a product at these rates becomes a member of Consumer

Cooperative Societies.

 Assist small businesses to stay profitable – Cooperative Societies help small

scale entrepreneurs procure raw materials at cheaper rates to reduce their cost of

production. They also provide producers with a platform to sell their products

directly to consumers. Removing intermediaries helps to cut down the selling price

and ensure higher sales and profits for producers.

 Share Profits among members – Cooperatives were established to serve the

economically weaker sections of rural communities. They distribute profits from

the operations among their members as a dividend. These earnings are vital for the

sustenance of rural households.

Discuss the role in economic development

economic development, the process whereby simple, low-income national economies

are transformed into modern industrial economies. Although the term is sometimes used

3
as a synonym for economic growth, generally it is employed to describe a change in a

country’s economy involving qualitative as well as quantitative improvements. The

theory of economic development—how primitive and poor economies can evolve into

sophisticated and relatively prosperous ones—is of critical importance to underdeveloped

countries, and it is usually in this context that the issues of economic development are

discussed.

Economic development first became a major concern after World War II. As the era of

European colonialism ended, many former colonies and other countries with low living

standards came to be termed underdeveloped countries, to contrast their economies with

those of the developed countries, which were understood to be Canada, the United States,

those of western Europe, most eastern European countries, the then Soviet Union, Japan,

South Africa, Australia, and New Zealand. As living standards in most poor countries

began to rise in subsequent decades, they were renamed the developing countries.

There is no universally accepted definition of what a developing country is; neither is

there one of what constitutes the process of economic development. Developing countries

are usually categorized by a per capita income criterion, and economic development is

usually thought to occur as per capita incomes rise. A country’s per capita income (which

is almost synonymous with per capita output) is the best available measure of the value of

the goods and services available, per person, to the society per year. Although there are a

number of problems of measurement of both the level of per capita income and its rate of

4
growth, these two indicators are the best available to provide estimates of the level of

economic well-being within a country and of its economic growth.

It is well to consider some of the statistical and conceptual difficulties of using the

conventional criterion of underdevelopment before analyzing the causes of

underdevelopment. The statistical difficulties are well known. To begin with, there are

the awkward borderline cases. Even if analysis is confined to the underdeveloped and

developing countries in Asia, Africa, and Latin America, there are rich oil countries that

have per capita incomes well above the rest but that are otherwise underdeveloped in

their general economic characteristics. Second, there are a number of technical

difficulties that make the per capita incomes of many underdeveloped countries

(expressed in terms of an international currency, such as the U.S. dollar) a very crude

measure of their per capita real income. These difficulties include the defectiveness of the

basic national income and population statistics, the inappropriateness of the official

exchange rates at which the national incomes in terms of the respective domestic

currencies are converted into the common denominator of the U.S. dollar, and the

problems of estimating the value of the noncash components of real incomes in the

underdeveloped countries. Finally, there are conceptual problems in interpreting the

meaning of the international differences in the per capita income levels.

Although the difficulties with income measures are well established, measures of per

capita income correlate reasonably well with other measures of economic well-being,

such as life expectancy, infant mortality rates, and literacy rates. Other indicators, such as

5
nutritional status and the per capita availability of hospital beds, physicians, and teachers,

are also closely related to per capita income levels. While a difference of, say, 10 percent

in per capita incomes between two countries would not be regarded as necessarily

indicative of a difference in living standards between them, actual observed differences

are of a much larger magnitude. India’s per capita income, for example, was estimated at

$270 in 1985. In contrast, Brazil’s was estimated to be $1,640, and Italy’s was $6,520.

While economists have cited a number of reasons why the implication that Italy’s living

standard was 24 times greater than India’s might be biased upward, no one would doubt

that the Italian living standard was significantly higher than that of Brazil, which in turn

was higher than India’s by a wide margin.

The interpretation of a low per capita income level as an index of poverty in a material

sense may be accepted with two qualifications. First, the level of material living depends

not on per capita income as such but on per capita consumption. The two may differ

considerably when a large proportion of the national income is diverted from

consumption to other purposes; for example, through a policy of forced saving. Second,

the poverty of a country is more faithfully reflected by the representative standard of

living of the great mass of its people. This may be well below the simple arithmetic

average of per capita income or consumption when national income is very unequally

distributed and there is a wide gap in the standard of living between the rich and the poor.

Discuss the role of foreign investment in development economic

6
Foreign direct investment (FDI) is an ownership stake in a foreign company or project

made by an investor, company, or government from another country.

Generally, the term is used to describe a business decision to acquire a substantial stake

in a foreign business or to buy it outright to expand operations to a new region. The term

is usually not used to describe a stock investment in a foreign company alone. FDI is a

key element in international economic integration because it creates stable and long-

lasting links between economies.

Foreign direct investment (FDI) and its impact on the host economy has been the topic of

many works. The problem is that, in many instances, there is a certain degree of

discrepancy between theoretical and empirical studies [Nair-Reichert, Weinhold, 2001;

McGrattan, 2011; Iamsiraroj, Ulubaşoğ, 2016].