Village Cooperatives: Tools for Economic Empowerment – Minister
Red adn white Villages Cooperatives: Indonesia’s grassroots Economic Empowerment Engine
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Jakarta – The Indonesian people are placing their hopes on the Red and White Villages Cooperatives program to drive notable economic empowerment at the grassroots level, according to Minister of Cooperatives and Small and medium Enterprises (SMEs) Budi Arie Setiadi. the initiative is envisioned as a crucial instrument for improving public welfare and fostering thorough village advancement across the archipelago.
Minister Setiadi underscored that the Red and White Villages Cooperatives program transcends a mere initiative; it represents a strategic effort to provide tangible solutions to persistent social issues plaguing rural Indonesia. he specifically highlighted two critical challenges that the cooperative movement is poised to tackle: pervasive rural poverty and the concerningly high prevalence of stunting.
“Poverty is still widespread in villages, and the economic gap between urban and rural areas remains stark,” Minister Setiadi stated during a media doorstop following the 78th National cooperatives Day (Harcopn) ceremony. “This is why we want cooperatives to play a vital role in driving national economic growth.”
The minister pointed to recent data revealing that rural economies currently contribute a mere 14 percent to the national Gross Domestic Product (GDP), with the overwhelming majority originating from urban centers. “That’s why we need a more equitable economic distribution,” he emphasized, positioning the cooperatives as a key mechanism for achieving this balance.
Cooperative Movement: A Pillar of National Growth
indonesia boasts a robust cooperative sector, with 131,617 active cooperatives as of 2024, collectively engaging nearly 30 million members. These entities have demonstrated significant economic impact,with a total business volume reaching Rp214 trillion,contributing close to one percent to the national GDP.
The Red and White Villages Cooperatives program aims to amplify this impact by establishing a presence in villages and urban wards nationwide. Currently, approximately 80,500 villages and urban wards have successfully formed these cooperatives through special village assemblies (special Village Deliberation).
Progress and Future Outlook
The program has seen ample progress in its foundational stages. over 77,000 of the established cooperatives have secured legal status from the Ministry of Law and Human Rights, a testament to their formalization and operational readiness. Furthermore, 103 cooperatives have been identified and designated as national pilot models, poised to lead by example.
The operational rollout of these village cooperatives is slated to commence following a national launch by President Prabowo Subianto on July 19, 2025. The government’s enterprising target is to achieve their full operational deployment by October 2025, ensuring they are fully equipped to serve the diverse economic needs of local communities and contribute to a more inclusive and balanced national economy.
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