President of the Republic of Indonesia, Prabowo Subianto, has officially launched the operation of Merah Putih Village/Sub-district Cooperatives (Kopdes Merah Putih/KDMP) across Indonesia. The inauguration also marked the beginning of a trial phase for institutional sales and distribution involving 80,000 cooperatives, with 103 of them selected as pilot models.
The program was launched under Presidential Instruction No. 9 of 2025 on the Acceleration of Establishing Merah Putih Village Cooperatives.
It aims to strengthen the rural economy, improve national food security, and reduce communities’ dependence on illegal loans, intermediaries, and predatory lenders.
Responding to the initiative, Dr. Amirullah Setya Hardi, an economist from Universitas Gadjah Mada (UGM), stated that this move is a strategic step to empower rural economies.
“Activating the economic potential of villages is one of the most crucial tasks. There is immense potential, with an additional challenge involving around 8 million cooperative members across Indonesia. This is certainly a significant number to expand the cooperative movement,” he explained on Monday, Aug. 4, 2025.
However, Dr. Hardi cautioned that the main challenge lies not in the number of cooperatives but in their ability to uphold universal cooperative principles.
“Cooperatives differ from other business entities because they prioritize member welfare. Principles such as independence, active member participation, and business sustainability must be truly implemented so that these cooperatives do not remain merely on paper,” he elaborated.
He also emphasized the need for innovation so cooperatives can compete with other accessible financial sources, such as online loans and loan sharks.
“Cooperatives must emerge as a safe, fast, and truly empowering alternative for rural communities. They should ensure the provision of financial services, basic food items, fertilizers, and other essential needs,” he added.
Dr. Hardi expressed hope that the mass establishment of cooperatives would not remain a short-term project but evolve into a collective movement that actively involves rural communities.
“If cooperatives can operate based on their founding principles, with active member participation and government support in supplying goods and business capital, the welfare of rural communities can be achieved. Ultimately, this will also have a positive impact on the national economy,” he concluded.
Author: Kezia Dwina Nathania
Editor: Gusti Grehenson
Post-editor: Lintang Andwyna
Illustration: Gemapos