ALOR SETAR, 26 JANUARY, 2012: Dishonesty involving the management or members of cooperatives is the main cause of the cooperatives' financial failure, says former prime minister Tun Dr Mahathir Mohamad.

"I understand that there are more than 8,000 cooperatives in this country but only 20 per cent are able to manage their business properly.

"If there are unsuccessful cooperatives and when investigated, their failure is found to be due to the stated problem (dishonesty). When you accept responsibilities, you must carry them out properly," he said.

Speaking at a talk session held in conjunction with the International Year of Cooperatives 2012 celebration, here, today, Dr Mahathir added that it was very difficult to find individuals who were really honest as many tended to succumb to temptations when dealing with money.

He said there must be honesty and efficiency on the part of the cooperatives' management and members in managing money to ensure success of their business activities.

Dr Mahathir said managing a business based on the cooperative concept was not easy as it depended on people who were willing to work for a small payment, while the operating costs must be kept low in order to earn bigger profits.

Later when met by reporters, Dr Mahathir said there were already many opportunities provided for Bumiputeras to do business and if these opportunities were well-tapped, they would be able to control 60 per cent of the economy.

"We give the Malay Bumiputeras the opportunity to do business in the town areas through the franchise system since they don't know how to do it on their own while only a small capital is required and the promotions already there.

"But they are not interested. Perhaps it's because it's a small business, hence a small profit to be gained. They want to go big, but if they don't want to start small, then we'll find mostly the Chinese doing business," he said.

On another note, Dr Mahathir said the government needed to find better markets than Europe due to the economic downturn there.

He was of the opinion that Europe would not recover in the next few years and was unable to compete with China, Japan and Korea.

"Europe is our trading partner, their trade with us is more than 20 per cent, but if they have no money to buy our goods, we cannot get the revenue.

"And if we are not careful, if we don't work hard but only asking for higher pay with no increased productivity, we will be like Europe," he said.

- Bernama