By: Ricky Rinaldi )*
National economic development is not solely determined by the growth of large industries and economic activity in urban areas. Indonesia’s economic strength also rests on villages as centers of food production, natural resources, and home to millions of people. Therefore, efforts to strengthen the village economy are a crucial strategy implemented by the government through the Red and White Village/Sub-district Cooperative program. This program goes beyond establishing new business entities, but is designed as an instrument to strengthen community economic independence through professional, transparent, and sustainable governance.
President Prabowo Subianto has positioned cooperatives as a key pillar of people’s economic development from the outset. Through the Red and White Cooperative, the government aims to establish an economic institution capable of connecting village potential with access to capital, distribution of goods, business services, and improving community welfare. The presence of cooperatives is expected to reduce community dependence on detrimental economic practices such as loan sharks, middlemen, and informal loans, which have long been obstacles to the development of village businesses.
Minister of Cooperatives Ferry Juliantono emphasized that the success of the Red and White Cooperative is determined not only by the number of cooperatives established, but also by the quality of their management. Therefore, the government is placing significant emphasis on the professionalism of cooperative management through various training and mentoring programs. He believes that cooperatives must be managed with strong leadership skills, modern management, and strong financial discipline to develop into economic institutions trusted by the community.
This professional approach is a key differentiator compared to various cooperative programs in the past. Many cooperatives have struggled to develop due to weak governance, a lack of human resource capacity, and minimal oversight. The government is working to address these issues by building a stronger institutional system from the outset. Cooperative administrators, supervisors, and managers are trained to be able to manage their businesses accountably, so that cooperatives truly become a tool for community economic empowerment.
In addition to emphasizing professionalism, the government is also encouraging cooperatives to develop business models tailored to the needs of local communities. Each village has distinct economic characteristics, so the development of cooperative business units must be tailored to local potential. In agricultural areas, cooperatives can serve as providers of production inputs, absorbers of harvested crops, and liaisons with broader markets. In coastal areas, cooperatives can serve as distribution centers for fishery products and strengthen supply chains. Thus, cooperatives are not merely administrative institutions but truly driving forces behind village economic activity.
Government support for this program is also evident in the integration of the Red and White Cooperative into the national development agenda. The program has even been included as one of the 2026 National Strategic Projects. This step demonstrates the government’s positioning of cooperatives as a crucial instrument for strengthening the people’s economy while reducing the development gap between rural and urban areas. With the support of national policies, cooperatives gain certainty in their development direction and greater opportunities for institutional support and financing.
Minister of National Development Planning/Head of Bappenas, Rachmat Pambudy, also prioritizes strengthening the people’s economy as a national development priority. By integrating the Red and White Cooperative into development planning, the government aims to ensure that economic growth is not limited to certain groups but is felt equally, down to the village level. The presence of cooperatives serves as a means to expand community participation in productive economic activities, thereby ensuring that the benefits of development are more widely shared.
Another important aspect is strengthening synergies between cooperatives and various supporting institutions. The government encourages cooperation between cooperatives and banks, state-owned enterprises, logistics institutions, and various institutions that can assist in the development of community businesses. This collaboration allows cooperatives to gain better access to financing, marketing, technology, and distribution networks. With this support, cooperatives no longer operate in isolation but become part of a larger, integrated economic ecosystem.
The existence of professionally managed cooperatives also has the potential to create new jobs at the village level. Developing cooperative business units requires management, administration, marketing, and operational personnel who can absorb the local workforce. The economic impact
The resulting benefits not only increase the income of cooperative members but also encourage the growth of new economic activities that have a multiplier effect on the surrounding community.
Furthermore, strengthening cooperatives is a strategic step in building national economic resilience. When villages have strong economic institutions, community productivity increases and resilience to economic shocks improves. Cooperatives can serve as an economic buffer for communities when facing challenges, while also serving as a means to accelerate economic recovery at the grassroots level.
With various policy supports, institutional strengthening, and a focus on professional management, the Red and White Cooperative has a significant opportunity to become a driving force for the village economy. This program demonstrates the government’s commitment to delivering more inclusive, equitable, and welfare-oriented development. If managed consistently and accountably, the Red and White Cooperative will not only be a symbol of the people’s economy but also a crucial foundation for realizing independent, productive, and prosperous villages as part of an increasingly advanced Indonesia.
*)Strategic Issues Observer