Improving Transparency of Red and White Cooperatives: Effective Supervisory Steps for Sustainability
By: Indriani Nova )*
Transparency is one of the main foundations in healthy and sustainable institutional governance, including in membership-based business entities such as cooperatives. The Red and White Village Cooperative which will be launched on July 12, 2025 by the government of President Prabowo Subianto brings new hopes as well as major challenges in efforts to build the national economy from the grassroots level.
Minister of Cooperatives (Menkop), Budi Arie Setiadi said that the Red and White Village Cooperative must be managed transparently, accountably, and professionally. When transparency weakens, the risk of information inequality, abuse of authority, and weakened accountability increases, which can ultimately damage trust and endanger the sustainability of the cooperative itself. Therefore, building an effective monitoring system is a strategic step that cannot be postponed.
Meanwhile, Minister of Home Affairs, Tito Karnavian said that the Red and White Village Cooperative could be the starting point for the birth of rural industrialization rooted in the principles of the Pancasila economy. He considered cooperatives not only a tool to strengthen the traditional economic sector, but also a means to build a modern ecosystem that is able to integrate local wisdom values with the dynamics and needs of the global economy.
Tito emphasized that village cooperatives should not continue to operate in the consumption or savings and loans sector as has been the case so far. Instead, cooperatives need to evolve into key actors in the production and distribution chain, and be able to penetrate the export market. Thus, cooperatives can play a more strategic role in the national economic structure.
In terms of financing, Tito also highlighted the importance of the role of the Danantara institution which is tasked with consolidating and maximizing the use of state assets for the benefit of the wider community. He proposed that Danantara not operate separately, but be directly involved as a strategic partner in village cooperatives. This synergy, according to him, will strengthen the bargaining position of cooperatives, accelerate access to capital, and make village cooperatives the main driving force for people’s economic development.
Furthermore, Tito proposed that these cooperatives be directly connected to the Financial Services Authority (OJK) supervision mechanism. This is considered important to ensure transparency and accountability, while also encouraging the implementation of modern governance as has been proven effective in the financial sector.
Transparency in the context of cooperatives includes openness of information related to finance, decision-making, program planning, and accountability of management. However, transparency is not only limited to administrative openness, but also concerns aspects of organizational culture. Transparent cooperatives create an environment where members feel actively involved in the decision-making process and have adequate access to important information.
Youth Cooperative Figure and former Head of Kokesma ITB, Turino Yulianto highlighted the ideological aspect inherent in the Red and White Village Cooperative initiative. He said this program was a strategic step by President Prabowo in carrying out a comprehensive transformation of the national economic structure. According to Turino, village cooperatives are an important instrument for shifting the economic order that tends to be oligarchic towards a more just and equitable people’s economic system.
In the context of the inequality in the distribution of assets and access to economic opportunities which are still major problems in Indonesia, Turino believes that village cooperatives can play a significant role as a tool for correcting structural injustices that have so far hampered equitable national development.
He explained that village cooperatives have great potential in improving the local trade system, especially in rural areas. Through the management of superior village potential, fertilizer distribution, to the development of various village-based business units, this cooperative is expected to be the most effective means of realizing equal welfare for the community.
Active participation of members is also an important element in building transparency and supervision. A healthy cooperative is a cooperative whose members have a high awareness to be involved in deliberations, decision-making, and monitoring of program implementation. Therefore, educating members about their rights and responsibilities, as well as the importance of active involvement in cooperative activities, is a long-term investment that determines the quality of economic democracy in cooperatives.
The sustainability of cooperatives is ultimately determined by trust. When members feel confident that their cooperative is managed honestly, openly, and responsibly, their commitment to remain active and loyal will also increase. On the other hand, cooperatives that are closed and prone to corrupt practices tend to experience decreased member participation, internal conflict, and even dissolution.
Building transparency also means building justice. When all members have access to information and can participate in decision-making, the distribution of cooperative benefits becomes more equitable. There is no longer the dominance of certain groups or administrators who make unilateral decisions. Inclusivity will be created, and the cooperative truly belongs to all.
With a collective commitment to strengthen the monitoring system and cultivate transparency, the Red and White Cooperative will be able to answer the challenges of the times while maintaining its identity as a fair, democratic, and sustainable people’s economic institution. This is not only about managing the organization efficiently, but about maintaining the trust of millions of members who place their hopes in cooperatives as a path to the nation’s economic independence.
)* The author is an economic journalist at PT SCE Investama Tbk
