In order to promote and encourage a better efficiency of cooperatives in the country, the deputies of the Legislative Assembly approved, with 56 votes, the Law for the Dissolution, liquidation and Transfer of Functions of the Salvadoran Institute for the Development of Cooperatives (INSAFOCOOP).
This Regulation will allow the decentralization of the activities carried out by the institution (created in 1969 as the rector of cooperatives in El Salvador) and the redistribution of its powers and powers to specialized entities that are part of the administrative organization of the State.
That is to say, by sharing the activities of INSAFOCOOP it will be possible to improve operational efficiency, maintain competitiveness and strengthen the legal, organizational, economic and public management regime of the entire cooperative system.
The deputies indicated that the specificities and needs of each productive sector will be taken into account with this approval today. In addition, adequate legal tools will be provided to the public administration to effectively serve the public interest.
INSAFOCOOP must cooperate with the Supervision of the Financial system (SSF) by sending all the necessary details about the cooperatives, as established by the approved regulations, which contain 22 articles.
What are the benefits of INSAFOCOOP decentralization?
In the discussion held in the legislative plenary session, at least three advantages of distributing the functions of the institution were specified, and until today the only advantage was the supervision of cooperatives. at the national level.
- More specialized attention will be given depending on the economic field to which the cooperative is committed, which strengthens the control of the entities.
- Cooperative integration will be further promoted, since the development and implementation of a policy to promote and develop cooperatives will be established with the support of various State entities.
- It will establish special provisions regarding savings and credit cooperatives, which will be under the control of BCR and under the supervision of SSF.
How will INSAFOCOOP powers be distributed?
article 8 of the law states that other entities will take over the powers of this institution after the decentralization of INSAFOCOOP.
the powers and powers of this institution over the Associations and the Federation of Cooperatives will pass to the following state entities: the Ministry of Agriculture and Livestock (MAG), the National Commission for Micro and Small Businesses (CONAMYPE), the Ministry of Housing and the Ministry of Education, Science and Technology.
For example,the Central Reserve Bank will regulate and the Supervision will supervise savings and credit cooperatives and insurance cooperatives; and CONAMYPE will supervise the cooperatives of craft production,professionals,industrial production or agro-industrial marketing; and so by sectors.
What are the potential challenges cooperatives may face due to the decentralization of INSAFOCOOP in El Salvador?
Interview: The Decentralization of INSAFOCOOP and Its Implications for Cooperatives in el Salvador
Time.news editor: Today, we are joined by Dr. clara Mendoza, an expert in cooperative economics and public policy, to discuss the recent legislative changes affecting the Salvadoran Institute for the development of cooperatives (INSAFOCOOP). Dr. Mendoza, thank you for being here.
Dr. Clara Mendoza: thank you for having me. It’s a crucial time for cooperatives in El Salvador.
Editor: Let’s dive right in. The Legislative Assembly recently approved a law to dissolve INSAFOCOOP. What prompted this decision?
Dr. Mendoza: The decision stems from a need to enhance the efficiency of cooperatives across the country. By decentralizing the operations of INSAFOCOOP, the government aims to redistribute its powers to specialized entities that can offer more targeted support depending on the economic sector involved.
Editor: Captivating. Can you elaborate on the benefits of this decentralization for cooperatives?
Dr.Mendoza: Certainly. There are three primary advantages. First, cooperatives will receive more specialized attention based on their economic field, which is likely to improve operational oversight. Second,this shift fosters cooperative integration,as it establishes a coordinated policy for the development of cooperatives,supported by various state entities. it creates special provisions for savings and credit cooperatives, placing them under the regulation of the Central Reserve Bank and supervision of the Supervision of the Financial system (SSF).
Editor: You mentioned specialized attention. How will the powers of INSAFOCOOP be distributed among other entities, and what does that mean for cooperatives?
Dr.Mendoza: Under the new law, specified entities will take over INSAFOCOOP’s responsibilities. For instance, the Ministry of Agriculture will handle agricultural cooperatives, while CONAMYPE will supervise those involved in craft production and small businesses. This specialized oversight is expected to meet the unique needs of different cooperative sectors more effectively.
Editor: That sounds like a significant restructuring. How do you think this will impact the legal and organizational framework of cooperatives in El salvador?
Dr. Mendoza: The restructuring is highly likely to strengthen the overall legal and organizational framework. By distributing powers across various ministries, there will be a more robust system of checks and balances, which can better protect the interests of cooperatives and ensure compliance with national regulations. Moreover, this decentralization will provide adequate legal tools to promote efficient public management, benefitting the cooperative sector as a whole.
Editor: With these changes in play, what practical advice would you give to cooperative managers and operators?
Dr. Mendoza: I advise cooperative managers to stay informed about the new regulations and understand which entity will oversee their operations. They should engage actively with regulatory bodies to voice their needs and concerns. Moreover,embracing partnerships across sectors can led to better resource sharing and collaborative opportunities that improve their competitive edge in the market.
Editor: Thank you, Dr. Mendoza, for sharing your insights on this crucial development in the cooperative sector in El Salvador. As the landscape evolves, it’s vital for cooperatives to adapt and thrive.
Dr. Mendoza: Thank you for having me! It’s an exciting time, and I look forward to seeing how cooperatives leverage these changes for their growth and sustainability.
Keywords: INSAFOCOOP,cooperatives in El Salvador,decentralization,Ministry of Agriculture,CONAMYPE,regulatory changes,cooperative efficiency,public administration,cooperative management.
