Pathology of Cooperatives in Iran: Solutions Based on International Experiences

The cooperative sector in Iran holds a significant position within the country's constitution and is outlined as a strategic industry in key national documents. Despite concerted efforts, the state of the cooperative sector in Iran manifests a dual nature. On one hand, relative to other nations, particularly those in the region and the Middle East, Iran's cooperative sector has demonstrated a commendable performance. On the other hand, it falls short of the envisioned ideal model stipulated in strategic documents.

In 2013, the executive branch proposed a bill to amend the cooperative sector law to the Islamic Council, aiming for fundamental changes in the industry's direction. However, this bill did not garner consensus among sector stakeholders and the Islamic Council. This article seeks to explore the imperative for this review. To achieve this, an initial analysis of the cooperative sector's situation was conducted, considering the definitions and concepts outlined in industry laws and documents. The assessment of goal attainment as per official statistics was also carried out. Subsequently, a systematic review of prior research on cooperatives and their operational hindrances was performed. Finally, recommendations were formulated based on successful international practices, considering extant legislative and executive efforts in various countries. These suggestions are intended for presentation to policymakers and legislators in Iran.

The survey results indicate that Iran's cooperative sector grapples with definitional ambiguity, a lack of competitiveness vis-à-vis the private sector, inadequate understanding of cooperatives, a shortage of skilled human resources, administrative weaknesses, financing challenges, government dependence, and regulatory institution inefficiencies. Proposed solutions encompass redefining cooperatives in alignment with international standards, harnessing the potential of new-generation cooperatives, embracing diverse shareholding patterns, utilizing crowdfunding, establishing a credit union for cooperatives, fortifying internal oversight institutions like supervisory unions, adjusting the minimum founding member criteria, reevaluating cooperative education in legislation, permitting the involvement of specialized "non-member experts" on cooperative boards of directors, revitalizing cooperative affairs management programs by mandating relevant professional qualifications for managers, and integrating international experiences that address the aforementioned issues. Notably, some solutions pertain to legal aspects, while others necessitate reevaluating cooperative department management within the executive branch, depending on each specific proposal.