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The Role of Credit in Employment Growth in Cooperative: The Case of Iran

By Zahra Karimi

October 25, 2005

Abstract

Credit schemes have formed an essential part of the programs for establishing cooperatives in all economic sectors in Iran. Inspired by the Constitution of the Islamic Republic of Iran, cooperative movement has been escalated right after the 1979 Revolution. According to article 44 of the Islamic Republic Constitution, cooperative sector is ranked as the second most important economic sector of the national economy. The spirit of the Constitution is to exercise comprehensive social justice throughout society, by helping the unemployed to set up cooperatives with equal share in ownership and decision making. Despite the Constitution’s emphasis on cooperative sector and considering the fact that the Constitution is now a quarter century old, cooperative sector is still a weak part of the national economy. The Iranian government has implemented different supportive measures to persuade establishing new cooperatives and help active ones. However, our study has revealed that many formally registered cooperatives are in practice anything but private companies that have changed apparently to cooperatives for using credit facilities and other government's support and escaping taxes. To answer the question how successful cooperatives have been in their expected task of job creating, the specific case of women’s cooperatives in Mazandaran province has been studied, besides investigating the cooperative laws and related formal and informal information and statistics, through questionnaire and direct interview with manager of cooperatives and the experts in the cooperative offices. Our study shows that cooperative sector has not been successful in creating job opportunities for poor unemployed.

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Read More: Agriculture, Governance, Jobs, Poverty, Iran, Middle East