The Red and White Village Cooperative is the Main Instrument for National Economic Equality
By: Juanda Syah)*
The government continues to strengthen its commitment to promoting national economic equality through the development of village cooperatives as new epicenters of community economic activity. This initiative is realized through the operation of the Merah Putih Village/Sub-district Cooperative (Kopdes/Kel) which is aimed at not only serving as an institution that distributes basic community needs but also as a driving force for a productive economy at the grassroots level. This strategic step is concrete evidence of the government’s commitment to building the village economy, not just from the top down, but from the bottom up in an inclusive and sustainable manner.
President Prabowo Subianto’s explicit instructions position village cooperatives as the center for managing local production and as distribution hubs for subsidized staple goods. With this new paradigm, cooperatives are no longer treated merely as administrative institutions, but rather as professional and competitive community-based businesses. This transformation paves the way for village communities to become more than just recipients of aid, but also independent economic actors, collectively managing their region’s potential.
Minister of Cooperatives, Ferry Juliantono, stated that cross-sector consolidation was carried out to ensure that each Red and White Village Cooperative (Kopdes Merah Putih) is equipped with adequate and standardized supporting infrastructure. The availability of storage warehouses and sales outlets is an absolute prerequisite for cooperatives to fulfill their dual function of collecting agricultural products and providing for the community. Thus, village cooperatives not only regulate the flow of incoming goods but also the flow of outgoing goods, thereby maintaining economic added value within the village itself.
Ferry Julianto emphasized that the government is targeting the establishment and funding of 1,000 cooperatives, with financial support from member banks of the Association of State-Owned Banks (Himbara) and the Revolving Fund Management Institution (LPDB). This financing scheme covers not only working capital but also physical investments in the form of warehouse construction, outlets, and operational facilities. Cross-institutional synergy is also solid. The Ministry of Finance has prepared a supporting budget, state-owned banks are ready to disburse loans for cooperative development, and various State-Owned Enterprises (SOEs) are assisting in the procurement of supporting infrastructure.
More than 10,000 cooperatives have registered with the Simkopdes system, and most have submitted financing proposals. However, the government is now implementing new standards requiring each proposal to include a physical investment plan to ensure the cooperative truly fulfills its intended function. This policy marks a shift in the orientation of cooperatives from merely managing revolving capital to economic institutions with a robust structure and tangible assets.
In addition to financial and infrastructure support, the government is also strengthening human resources. The Ministry of Cooperatives is partnering with Government Employees with Work Agreements (P3K), sub-district task forces, and regional coordinators from various ministries to ensure intensive support at every stage of cooperative formation. Training for cooperative administrators is a priority to ensure that the institution’s management is not merely administrative but also based on efficient and accountable professional management. In this way, village cooperatives will grow into modern business entities managed transparently and generating profits for their members and the surrounding community.
Support for the Red and White Village Cooperatives (Kopdes Merah Putih) program also comes from the investment sector. Danantara’s Chief Operating Officer, Dony Oskaria, expressed his readiness to develop a viable and sustainable cooperative business model. Through synergy with PT Agrinas Pangan Nusantara (Persero), a state-owned food enterprise, Danantara is designing a cooperative business ecosystem that not only relies on a single commodity but also integrates production, distribution, and processing. With this business model, village cooperatives will not only be small business units but will grow as local economic centers capable of competing in the national supply chain.
This cooperative ecosystem development plan also includes the establishment of networks between cooperatives in various regions, creating mutually reinforcing economies of scale. Cooperatives in food-producing areas can partner with cooperatives in consumption areas, while processing cooperatives can partner with raw material supply cooperatives. This connectivity pattern will reduce village dependence on middlemen and shorten the distribution chain, a major obstacle for farmers and micro-entrepreneurs in rural areas.
Moreover, the presence of the Red and White Village Cooperative is believed to foster a new sense of pride among village communities. Until now, most villagers felt like recipients of policies without control over their own economic destiny. With the establishment of a strong and independent village cooperative, the community not only has a collective platform for business but also the space to make decisions and determine the direction of their own village development. This is a true manifestation of people’s economic sovereignty.
The Red and White Village Cooperative Program also has significant potential for creating new local jobs. From cooperative administrators and logistics staff to warehouse managers and outlet staff, all require human resources from the local villages. Village economies, previously reliant on seasonal agricultural activities, will now be strengthened by sustainable year-round trade, services, and processing activities. This multiplier effect will encourage the formation of new businesses, such as local transportation, product packaging, and digital services supporting online marketing.
With all the supporting elements carefully prepared, the Red and White Village Cooperatives (Kopdes Merah Putih) program has a great potential to become a key instrument for national economic equality. Villages will no longer be viewed as underdeveloped areas, but as the starting point for people’s economic revival. Transforming village cooperatives into modern business institutions will lay the foundation for fairer and more equitable economic growth, while strengthening the nation’s social resilience.
This step confirms that economic equality is not just a slogan, but a concrete strategy implemented through collaboration between the government, financial institutions, state-owned enterprises, and village communities. With solid synergy and clear policy direction, the Merah Putih Village Cooperative is poised to become a new face of Indonesia’s economic independence.
)* The author is a Jakarta student living in Bandung
