Economy, Domestic Economy

Cooperative Sector Still Shy

Cooperative Sector Still Shy Cooperative Sector Still Shy

According to Article 44 of the Iranian Constitution, amended in 2004, the economy of Iran is to consist of three sectors: state, cooperative, and private. The article explicitly underlines the role and significance of the cooperative sector when it says that public sector operations should be limited to a certain extent and that the cooperative sector is complementary to the public and private sectors.  Also, the general policies outlined in Article 44 of the Constitution are aimed at increasing the share of the cooperative sector in the national economy to 25 percent by the end of the Fifth Five-Year Economic Development Plan (2011-2016).

In a bid to help increase the share of the cooperative sector in economy to 25 percent, the ‘Cooperatives Development Document’ was declared by the cabinet of ministers in December 2012, compelling seven ministries, the Central Bank of Iran (CBI), Vice President for Planning and Strategic Supervision, and the Vice President of Management Development and Human Resources to plan towards achieving the objective by the end of the current Iranian year (March 20, 2016).

Moreover, the Statistical Center of Iran, the CBI and the Islamic Republic of Iran Customs Administration were mandated to prepare their statistical and economic reports in three categories comprising of private, public and cooperative sectors. The Ministry of Cooperatives, Labor and Social Affairs was made in charge of supervising the proper implementation of this document and forwarding annual performance reports to the president.

 Short of Objectives

But despite all efforts and provisions made towards achieving the national objective, the 25 percent share of cooperative sector in the economy has not yet been realized as we approach the end of the Fifth Five-Year Development Plan (FYDP). Persian Daily Ta’adol has investigated the issue, asking the lawmakers and experts in the cooperative sector to share their opinions about the reason for the plan’s failure, in a bid to avoid similar shortcomings in drafting the sixth FYDP.

The experts interviewed mentioned multiple hurdles that prevented the cooperative sector from achieving the envisioned objectives, among them: the unfavorable economic conditions which have adversely affected the cooperative sector; internal problems within the cooperative sector and the administrative departments working for the sector; improper implementation of the privatization law which led to handing over government entities to semi-governmental organization instead of to the public through cooperatives; and a general lack of trust by the people in the cooperatives resulting from some unsuccessful cooperation in the past.

 Lack of Trust

Deputy minister of cooperatives, labor and social affairs, Hamid Kalantari considers the lack of “uniform and coordinated understanding among policymakers in the cooperative sector” as responsible for the sector falling short of its goals, noting that: “As the people involved in the cooperative sector did not have faith in their abilities and failed to cooperate and interact in an effective way, the cooperative sector did not receive due attention and funding.”

Head of Iran’s Central Chamber of Cooperatives, Bahman Abdollahi also believes that lack of trust in the cooperative sector by policymakers and authorities, in addition to shortage of funds allocated towards implementing the sector’s plans and structural defects in the sector’s legal and administrative system are among factors that contribute to the current deficiencies in the sector.

 Custodian Missing

Meanwhile, Iraj Nadimi, head of the parliamentary group for cooperatives, maintains that what is missing in the cooperative sector is a “caring custodian,” recalling that in 2011 the [then] ministry of cooperatives was merged with two other ministries, namely the ministry of labor and social affairs and the ministry of  welfare and social security. According to Nadimi, the move resulted in the cooperative sector not receiving its due attention among the multiple tasks entrusted with the [now] ministry of cooperatives, labor and social affairs.