Turkish Co-operatives Strategy and Action Plan 2012-2016

In response to the United Nations mandated International Year of Co-operatives in 2012, the MoCT, via the Directorate General of Co-operatives, undertook a broad assessment and information gathering campaign in order to develop the Turkish Co-operatives Strategy and Action Plan 2012-2016. The Action Plan identifies that a co-operatives’ mandate is to provide socially responsible free enterprise while upholding civic values. The Action Plan also asserts that the progress of the co-operative sector in a given country is tied to its “membership culture,” which also reflects back on the progress of the society as a whole. Finally, the Action Plan highlights that Turkish co-operatives have, for the most part, “failed to achieve the desired economic and social functions”(MoCT, 2012:4).

The Action Plan proposes that co-operatives have an increasingly significant role to play in strategies for alleviating poverty and towards achieving a variety of benefits in Turkey. These benefits include expanding access to finance, creating new jobs, improving market regulation, and increasing social capital. Although these aims are very broad, the Plan puts forward a strategic framework, outlining the problem areas and some general remedies that can be employed to achieve its targets.

5.3.1 Public organization and the provision of co-operative services

The Action Plan suggests that one of the underlying factors that has hampered the development and success of Turkish co-operatives is the limited ability of public institutions, or governmental agencies, to provide co-operatives with the support and programs they need to thrive. The proposed relief for this is threefold:

1)Increase the monitoring capacity of the ministerial authorities,

2) Task some of the super-organizations to deliver services to co-operatives, and 3) Implement a data collection and analysis system to provide greater accuracy and performance of remedial interventions in the future.

5.3.2 Training, consulting, information and research programs

The subjects identified in the heading have as a common element the aim to provide better education for the co-operative sector. The deficiency identified here is a lacking infrastructure resulting in misconceptions or poor execution among individuals involved in co-operatives. The proposed solution is the creation of the KGEP (Training Project of Co-operative Entrepreneurship), an institution that takes a holistic and long term strategy to increase the overall knowledge base from which co-operators may draw upon, and to impart this knowledge on children in primary schools, to co-operators through training programs and through trade unions, and to co-operative supervisors and board members through a specialized training program that will result in the granting of a certificate. Additionally, the Action Plan calls for the implementation of an annual reporting scheme for the co-operative sector with reportssupplied nationally.

5.3.3 Organization and co-operation among co-operatives

The Action Plan identifies a lack of coordination and operation amongst co-operatives, as well as a generally poor uptake of integration initiatives. Rather than passively accommodating the proliferation of insular co-operatives, the mandate here is to take measures to ensure co-operatives begin working together and they have the institutional and government support to facilitate this. To achieve better co-operation the Plan proposes the establishment of new super-organizations, the promotion of co-operative mergers, increased focus on multi-purpose co-operative enterprise, and extending co-operation outside the national borders by working with international co-operatives. There is also an identified need to explore sectors where there is currently little to no co-operative, where activities may be conducive to the co-operative model, and to make a concerted effort to encourage the spread of co-operatives into these fields.

5.3.4 Enhance access to capital

As mentioned above in sections 3.5 and 5.2.6, Turkish co-operatives are primarily capitalized by the members. In the case of agricultural co-operatives, there is a long history of institutional financial support from the state and their utilization to bolster development and modernization. For a period of time construction co-operatives were supported by governmental institutions as well, but this support has since been terminated.

The Action Plan proposes an additional increase to the minimum price of members’

capital shares, while it is worth noting the current minimum value of 100 TL was a significant increase that was only made very recently. Additionally, the proposition call for the elimination of the upper limit on the number of shares that can be held by a member - currently the cap is 5,000 shares.

To assist co-operatives in obtaining external funding, the Action Plan calls for the creation of a guarantee fund for co-operative credits. This fund is to provide assurances to lending institutions and help mitigate the risks associated with funding co-operatives. The proposal also entails the creation of a lending institution specifically to support the co-operative sector.

5.3.5 Enhancing audit systems

In the Action Plan there is some discussion of corruption within co-operatives and limited knowledge of auditing practices amongst members of co-operatives.

The Plan does not detail how the current audit practices will be enhanced. It does however call for the implementation of international best practices for external audits, as well as regulatory reform to institute more effective internal audit mechanisms. The assumption is that already discussed initiatives focused on education and training would support the strengthening of current audit practices.

5.3.6 Enhancing management capacity

There is a real and apparent concern that members of co-operatives lack the training and understanding to operate and manage co-operatives successfully.

This concern extends to co-operative board members, controllers, and managers.

The solution proposed in the Action Plan calls for co-operative harmonization with principles of corporate governance. This proposition translates into a shift towards more transparency achieved by requiring large scale co-operatives to maintain an online presence, more generally increasing information sharing strategies amongst co-operative members, and the allowance for hiring non-member executives for positions on co-operative boards.

5.3.7 Legal infrastructure improvement

The Action Plan is very general on this issue. It merely calls for legal reform to bring Turkish co-operative law in line with international principles and requirements.

5.3.8 State responsibility post-2012

Although this heading does not refer to one of the listed strategic targets and activities, there is mention throughout the Action Plan of how the state must augment its approach to co-operatives. It is expected that the legal reforms will trigger a co-operative sector that is more in line with the internationally accepted co-operative principles.⁴⁹

49 R193 - “Promotion of Co-operatives Recommendation.” 2002. No. 193. Recommendation concerning promotion of co-operatives. Geneva, 90th ILC Session (20 June 2002). Accessed April 28, 2014 at http://

www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:12100:0::NO::P12100_ILO_CODE:R193. (see “Annex”

for Extract from the Statement on the Co-operative Identity, adopted by the General Assembly of the International Co-operative Alliance in 1995)

It is suggested that the state also focus its support of co-operative activities rather than co-operatives generally, this way achieving a higher level of support for objectives that have a social or public character. Finally and perhaps most importantly, the Action Plan calls on the state and stakeholders to specifically increase access to capital for disadvantaged individuals participating in co-operatives.