THE USA JOURNALS
THE AMERICAN JOURNAL OF POLITICAL SCIENCE LAW AND CRIMINOLOGY (ISSN- 2693-0803)
VOLUME 06 ISSUE10
59
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PUBLISHED DATE: - 25-10-2024
DOI: -
https://doi.org/10.37547/tajpslc/Volume06Issue10-09
PAGE NO.: - 59-63
IMPORTANCE OF INTERNATIONAL
PRINCIPLES OF COOPERATIVE ACTIVITY IN
CLUSTER ACTIVITIES
Kholbaev Sobir Boratovich
Head Of The Department Of The Higher School Of Judges Under The
Supreme Council Of Judges Of The Republic Of Uzbekistan, Associate
Professor, Candidate Of Legal Sciences, Uzbekistan
INTRODUCTION
One of the important steps towards the
development of the market economy based on
modern requirements is the introduction of the
cluster model. Globalization has significantly
increased the role of clusters in the regional
economy and accelerated their development.
Companies have expanded their choice of location,
which has allowed them to take advantage of the
region's business environment for specific tasks.
Countries actively using cluster strategies have
succeeded in increasing their GDP from 75% to
90%. As markets globalize, more and more
resources are flowing into attractive regions,
increasing the role of clusters as a factor in regional
specialization. Therefore, the clusters themselves
are becoming more specialized and interconnected
with other clusters, ensuring the complementation
of each other's activities .
According to research conducted by the European
Union, regional companies have indicated the
following positive aspects of participation in the
cluster initiatives: improved connections with
research centers, cooperation with other
companies, the availability of the best services
related to the support of research, technology and
innovation activities, availability of funds for joint
projects, availability of services to enter the
international market, more .
The policy of implementing and developing the
cluster model is not the same everywhere. That is,
each country implements this policy based on its
internal and external capabilities, the level of
development of its economy, the creation of social
infrastructure, the extent to which its legal base is
formed, the demographic status of its population,
RESEARCH ARTICLE
Open Access
Abstract
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the availability of raw materials and other similar
factors.
As confirmed by years of experience in foreign
countries, there are principles that must be
followed in entrepreneurship based on mutual
cooperation and collaboration, particularly in
cluster activities, and the more fully these
principles are followed, the higher the efficiency
and productivity in work. Otherwise, such
entrepreneurship will only exist on paper, losing its
essence, and this situation will negatively impact
the state's economic policy.
These principles can primarily be identified as
those developed by the International Cooperative
Alliance (ICA).
The
international
cooperative
principles
developed by this organization are as follows:
1.
Voluntary and open membership;
2.
Democratic governance;
3.
Economic participation of members in
cooperative activities;
4.
Independence and autonomy from external
management;
5.
Education,
professional
training
and
information;
6.
Cooperation among cooperatives;
7.
Care about the interest of the cooperative
society.
Many foreign countries extensively use these
general principles in the development of their
cooperation policies. Because the more they are
followed and adhered to appropriately, the higher
the efficiency of cooperative development will be.
We would like to briefly discuss the importance of
some of these international principles in the
effective implementation of the clustering policy in
the Republic of Uzbekistan.
According to the principle of voluntary and open
membership, any individual should be able to join
and leave the cooperative in accordance with the
applicable legislation and the cooperative’s
charter. This rule is applied equally to all members.
However, this principle does not mean that any
person can be a member. A cooperative also has an
obligation other than a right. For example, there
are the property obligation to pay membership fees
and the labor obligation to participate in
cooperative work. If a member of a cooperative or
a candidate for membership cannot fulfill these
obligations, he cannot automatically claim
membership .
This principle is crucial in the establishment of
clusters and the conduct of their activities. In
foreign countries, clustering initiatives can be
either top-down or bottom-up. That is if the
proposal to create a cluster is made by republican
bodies or local government bodies, such an
initiative is considered “top
-
down”, if it is made by
business entities intending to directly participate
in the cluster, such an initiative is regarded as
“bottom
-
up”.
In our opinion, both methods can be applied in
Uzbekistan. This is because, from the perspective of
solving issues such as increasing competition in the
market, producing more goods for export and
thereby increasing foreign currency inflows,
developing social infrastructure in various regions,
and providing employment opportunities, the state
authorities or local government bodies can act as
interested parties and initiate the establishment of
clusters. For example, the proposal to establish the
“Tashkent Pharma Park” innovative scientific
-
production pharmaceutical cluster in the Zangiota
District of Tashkent Region, put forward by
relevant organizations, was approved by the
Presidential Decree of the Republic of Uzbekistan
№4574 “On the establishment of the “Tashkent
Pharma Park” innovative scientific
-production
pharmaceutical cluster” dated January 28, 2020.
The decree defined the participants of the cluster,
its main objectives and areas of activity, the
concept of its establishment, and the plan of
practical measures, as well as the program for the
development
of
transport,
engineering-
communication, and production infrastructure in
the cluster's territory .
It is noteworthy that these regulatory-legal
documents were adopted with the aim of
developing
the
pharmaceutical
industry,
establishing the production of high-quality
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medicines, medical supplies, and medical
equipment, and meeting the population's demand
for these products. At the same time, in our opinion,
instead of the state outlining every specific
measure, concrete plans, and tasks for the
establishment of a particular cluster, it would be
appropriate if the goals and necessity of
establishing clusters in the industry, the conditions
and opportunities that would be created, as well as
the types of support, benefits, and privileges that
may be provided by the state, were announced.
Additionally, it would be beneficial to send
invitations to business entities to join these
clusters based on these terms.
According to the democratic governance principle
of cooperatives, every member of the cooperative
has one vote in making general decisions.
Cooperative members with a larger share do not
have any advantage over others. In this case, the
possibility of the wealthiest shareholder
controlling the cooperative is excluded. All
members of the cooperative actively participate in
the development of its policies, management, and
control procedures. Shareholders are granted
equal access to the cooperative’s goods and
services according to laws and generally accepted
rules. The managers of the cooperative regularly
report to the general meeting of shareholders and,
if their performance does not meet the demands of
the shareholders, they may be dismissed from their
positions .
According to the legislation of most foreign
countries, the voting procedures for participants
(members) of clusters differ from those of owners,
shareholders, and participants of other commercial
organizations such as joint-stock companies,
limited liability companies, partnerships, and other
enterprises in different organizational and legal
forms. In these aforementioned commercial
organizations, members have voting rights
proportional to their contributed shares when
addressing certain matters. However, in cluster
formation, much like in cooperatives, each member
has only one vote, regardless of the size of their
contribution. We believe that this very procedure
should be included in the special law on cluster
activity, which is planned to be adopted in our
republic.
This procedure has proven its effectiveness and
efficiency over several years of cluster
development, being a form of democratic
management within the cluster. Since each
participant has equal voting rights, no member can
gain an advantage over others in matters related to
cluster activities that fall within the authority of the
general meeting of participants. Consequently,
participants are obliged to listen to and consider
the opinions of others.
Another important aspect of the democratic
governance principle is that no preferential
treatment is given to any individual when it comes
to the use of state-granted privileges and
advantages provided to the cluster or its members.
As property owners, participants are entitled to
request information on any matter related to
cluster activities from the executive authorities, as
well as demand the creation of safe working
conditions and a favorable investment and
business environment.
The principle of members' economic participation
in cooperative activities dictates that all
shareholders must be accountable for the
development of the cooperative's business
activities. In a cooperative, there can be no
"freeloaders" who do not contribute funds for its
growth but only benefit from its goods and
services. Economic participation in cooperative
activities begins with membership and the
introduction of a share. From that moment, the
shareholder becomes a member of the cooperative.
Economic participation can be carried out through
various resources: labor, financial contributions,
property, consulting, and other forms .
According to Articles 28 and 29 of the Law of the
Republic of Uzbekistan “On business partnerships,”
alongside participants (general partners) who
conduct entrepreneurial activities on behalf of the
partnership and are liable for its obligations with
all their assets, there may also be one or more
participants (contributors, limited partners) who
are liable for the partnership's losses only within
the limits of their contributions and do not
participate in its entrepreneurial activities. Such a
partnership is referred to as a limited partnership
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(commandite partnership).
Contributors do not have the right to participate in
the management of the limited partnership or act
on its behalf in any way without power of attorney.
They are also not entitled to challenge the actions
of the general partners regarding the management
and conduct of the partnership's affairs .
From the content of these rules, it can be
understood that although contributors in a limited
partnership are considered participants, they do
not possess the wide-ranging powers of general
partners, such as managing the partnership,
distributing profits and losses, or overseeing
bookkeeping. At the same time, contributors'
liability for the partnership's economic obligations
is limited compared to that of the general partners.
In a cluster, however, as in a cooperative, each
participant has equal rights and authority in the
financial and business activities of the cluster. They
actively and fully participate in achieving the
cluster's goals and objectives, have equal voting
rights in resolving any management-related issues,
and, when necessary, take responsibility for the
property and financial obligations of the cluster.
In Uzbekistan, since cluster participants assume
economic responsibility arising from the cluster's
financial and business activities, it is advisable that
no
participant,
including
the
organizing
participant,
be
granted
excessive
or
disproportionate powers. Profits and losses should
be distributed in proportion to the degree of their
According to the principle of independence and
autonomy
from
external
management,
cooperatives
are
considered
autonomous
organizations, and any external interference in
their economic activities is prohibited. Although
this principle is not directly stated in national
legislation, several laws and subordinate
regulations related to the legal guarantees of
business entities contain numerous legal norms
that correspond to its essence and meet relevant
requirements. For example, Articles 65, 66, and 67
of the Constitution of the Republic of Uzbekistan
state that the government creates conditions for
the development of market relations and fair
competition, guaranteeing freedom of economic
activity, entrepreneurship, and labor, taking into
account the priority of consumer rights.
The Republic of Uzbekistan ensures equal rights
and legal protection for all forms of ownership. The
owner has the right to own, use, and dispose of
their property at their discretion.
The government ensures a favorable investment
and business environment. In the territory of the
Republic of Uzbekistan, the unity of the economic
space, and the free movement of goods, services,
labor resources, and financial assets are
guaranteed .
Most importantly, full compliance with such
provisions,
comprehensive
support
for
entrepreneurs, and the creation of all economic,
legal, and social conditions for them to freely
operate is crucial.
However, in practice, despite the legal guarantees
enshrined in the Constitution and current
legislation, there are unfortunate instances in
certain regions where the principle of
independence and autonomy from external
management of business entities, including
clusters and their participants, is violated. Their
activities are subject to interference, various forms
of pressure are applied, and certain restrictions are
imposed.
Meanwhile, Article 34 of the Law of the Republic of
Uzbekistan “On guarantees of freedom of
entrepreneurial activity” and Ar
ticle 22 of the Law
“On
farming
enterprises”
stipulate
that
government bodies, other organizations, and their
officials are not entitled to interfere with the lawful
activities of business entities, including farming
enterprises.
On January 26, 2023, the President of the Republic
of Uzbekistan issued Resolution №23 “On
additional measures to further support the
activities of cotton raw material producers.” Its
first provision strictly prohibits local government
authorities from illegally interfering in the
activities of cotton-textile clusters, summoning
their founders to meetings and other events, and
influencing their relations with farmers. Officials
who impose restrictions on the placement of crops
and the use of land and water resources that are
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not provided for by law are subject to liability
according
to
the
established
procedure.
Additionally, imposing obligations beyond those
set by the four-party agreement on cotton-textile
clusters and product producers was banned.
To prevent such negative consequences, it is
important to establish the principle of
independence and autonomy from external
management in the special law regulating cluster
activities that is planned to be adopted in
Uzbekistan.
In conclusion, it should be emphasized that no
matter how fair, legal, and democratic the
principles may be, if they are not properly
observed and if relevant authorities, organizations,
business entities, and their officials do not feel
responsible and accountable, or if these principles
do not apply equally to everyone, the cluster model
will remain ineffective, and trust in it will continue
to diminish.
REFERENCES
1.
E.A. Belousova. Trends in the Development of
European Innovation Clusters // Economic
Sciences. No. 4(137), 2016. p. 116.
2.
Cluster programmes in Europe and beyond,
European Observatory for Clusters and
Industrial
Change,
may
2019,
URL:
https://www
.eucluster2019
.eu/files/events/4538/files/
eocic-cluster-
programme-report
3.
https://studbooks.net/1988130/ekonomika/
ponyatie_printsipy_kooperatsii.
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https://studbooks.net/1988130/ekonomika/
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www.lex.uz.
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https://studbooks.net/1988130/ekonomika/
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https://studbooks.net/1988130/ekonomika/
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