Indonesia Accelerates Village Cooperatives Development

Ambitious Targets and Key Challenges

The Indonesian government has set an ambitious target to fully operationalize 80,000 Village Cooperatives (Kopdes Merah Putih) by March 2026. Minister of Cooperatives, Ferry Juliantono, revealed that despite the ambitious plans, several significant challenges have emerged during implementation. The most pressing issues include the lack of electricity in thousands of villages and limited internet connectivity affecting tens of thousands more.

Addressing Infrastructure Gaps

To overcome these challenges, the government has initiated coordination with key state-owned enterprises. PT PLN (Persero) has been roped in to develop mini power plants in villages lacking electricity, addressing one of the fundamental infrastructure needs for the cooperatives. Simultaneously, Telkom is working on improving internet connectivity in remote areas, which is crucial for the operational efficiency of the Kopdes Merah Putih.

Implementation Strategy

The development of Kopdes Merah Putih is part of a broader strategy to strengthen rural economic infrastructure. The Minister highlighted that during the physical development of these cooperatives, several unforeseen issues came to light, particularly the basic infrastructure deficits. The government is now working to synchronize the cooperative development program with infrastructure development initiatives.

Economic Implications

The successful implementation of this initiative could significantly boost rural economic activities by providing institutional financial support through the cooperatives. Once fully operational, these cooperatives are expected to enhance financial inclusion and provide economic opportunities in rural areas.