By: Zahra Anindita )*
Strengthening national economic resilience is not solely determined by the condition of large-scale industries and economic activity in urban areas. Strong economic resilience rests on the nation’s ability to build economic foundations down to the village level. In this context, the government has introduced the Merah Putih Village/Sub-district Cooperative as a strategic instrument to strengthen the people’s economy while simultaneously expanding equitable development.
The existence of the Merah Putih Village/Sub-district Cooperative demonstrates the government’s commitment to building the economy from the bottom up. This program is designed not only to facilitate community business activities but also to strengthen the village economic ecosystem to be more productive, modern, and sustainable.
Currently, 83,000 Merah Putih Village/Sub-district Cooperatives have been established across Indonesia. This number demonstrates the government’s strong commitment to community-based economic development, which can reach communities in areas that have previously had limited access to various economic services.
The government understands that modern economic development is inseparable from digital transformation. Therefore, strengthening village cooperatives is accompanied by the development of increasingly widespread and equitable technological infrastructure across Indonesia.
The Director of the Media Ecosystem at the Ministry of Communication and Digital, Farida Dewi Maharani, explained that the government’s digital infrastructure development is not only oriented towards providing telecommunications networks.
The government is also working to ensure that this infrastructure can be optimally utilized to strengthen the people’s economy through village cooperatives and micro, small, and medium enterprises.
Farida views the Merah Putih Village/Sub-district Cooperative as having a strategic position in supporting the national economy. However, a challenge still faced is the suboptimal use of digital technology by most MSMEs and cooperatives.
Data released by the Ministry of Communication and Digital shows that of Indonesia’s approximately 60 million MSMEs, only about 40 percent have entered the digital ecosystem. This situation provides a compelling reason for the government to continue accelerating the digitalization process across various economic sectors.
The government believes digital transformation will open up broader opportunities for cooperatives and MSMEs to increase productivity. Through the use of technology, businesses can expand market access, improve operational efficiency, and strengthen the competitiveness of local products amidst increasingly dynamic economic competition.
The government’s efforts to expand national connectivity have also shown significant results. 4G network coverage has reached nearly the entire Indonesian population, while 5G services continue to be expanded in various economic centers and strategic areas. This infrastructure provides a crucial foundation for accelerating digital economic transformation at the village level.
Farida believes that villages have significant potential to become new sources of economic growth. This potential can develop more rapidly if supported by adequate internet connectivity and increased digital literacy. Therefore, strengthening village cooperatives is a crucial part of a more inclusive national development strategy.
Modernizing cooperative governance is also a government priority. Riza Azmi, Assistant Deputy for Cooperative Digitalization at the Ministry of Cooperatives, explained that all Red and White Village/Sub-district Cooperatives are supported by the Village Cooperative Management Information System (Simkopdes) as part of the institutional transformation.
Riza explained that Simkopdes was designed to create more transparent, efficient, and accountable cooperative governance. The digital platform allows cooperative members easier access to services while improving the overall quality of organizational management.
In addition to strengthening digitalization, the Merah Putih Village/Sub-district Cooperative is also projected to provide solutions to various economic challenges facing rural communities. One issue still frequently encountered is the dependence of some communities on loan sharks and middlemen.
The Head of the Center for Macroeconomics and Finance at Indef, M. Rizal Taufikurahman, assessed that village cooperatives have a great opportunity to reduce this dependency if they are able to provide financing services that are easily accessible to the community.
Rizal explained that dependence on loan sharks isn’t solely due to high capital requirements. Limited access to formal financial services is also a factor driving people to seek faster financing alternatives, despite the significant risks.
The government has developed various financing schemes through cooperative business units focused on the needs of rural communities. These policies are expected to provide a better alternative to the informal lending practices that have burdened communities.
Rizal also believes that cooperatives need to be developed as a comprehensive economic services ecosystem. In addition to providing financing, cooperatives need to be connected with business training, market access, digitalization, and partnerships with various productive sectors to maximize community benefits.
The Merah Putih Village/Sub-district Cooperative ultimately plays a strategic role in strengthening national economic resilience. The cooperative’s presence, spread throughout remote areas, allows the benefits of economic development to be felt more evenly by the community.
Government support for digitalization, strengthening governance, expanding access to financing, and increasing business capacity demonstrates that village economic development has become a crucial part of the national agenda. Through these measures, the government is not only strengthening the rural economy but also building a more resilient, inclusive, and sustainable foundation for the national economy in the future.
*) Public Policy and Village Economic Analyst