Do Merah Putih Village Cooperatives Actually Need Pick-Up Trucks?

The plan to procure 105,000 pick-up trucks for the Merah Putih Village/Urban Cooperative, with a value of approximately IDR 24.66 trillion, is a significant policy that will have a broad impact on villages and the national economy.

Therefore, this policy should not be assessed solely on its good intentions. It needs to be evaluated through two important lenses: needs assessment and prioritising the strengthening of domestic industry.

Needs Assessment

In the science of planning and organisational development, every public policy should ideally begin with a needs assessment, which is the process of identifying and prioritising needs objectively, based on data, and involving stakeholders. Without this stage, the policy risks jumping directly to solutions without ensuring that the root of the problem is addressed.

The question is simple but fundamental: do the Merah Putih village cooperatives actually need pick-up trucks?

Indonesia has more than 70,000 villages with very diverse socio-economic conditions. Some are agricultural villages with high volumes of crop distribution. Others are coastal villages with logistical needs for fisheries. However, there are also villages with limited economic activity, and which may not require large-scale goods distribution.

Many village cooperatives face more fundamental problems: weak governance, limited management literacy, limited working capital, and a lack of access to markets.

In this context, vehicles are not the primary need. Therefore, before talking about pick-up trucks, it is much more important to formulate a clear business model for the cooperative.

The principles of cooperatives are often summarised as ‘from members, by members, for members’, which emphasises that cooperatives exist to meet the real needs and participation of their members.

Bung Hatta himself emphasised that cooperatives are joint ventures based on the principle of kinship, built to create community prosperity. Essentially, cooperatives are not just organisations that own assets, but economic tools that must be relevant to the needs of their members.

The history of village development provides us with a mirror. In the past, the government established KUDs (Village Unit Cooperatives) as economic instruments for rural areas. Some were successful because they had clear functions in distributing fertiliser, purchasing crops, and providing financial support.

However, many KUDs stagnated because they lost the relevance of their business models. In the era of village autonomy, we know BUMDes (Village-Owned Enterprises) as business entities owned by the village government.

Many BUMDes have grown rapidly because they have been able to identify local potential – tourism, trade, services, or processing of agricultural products. However, some only exist on paper or stop at physical development without business sustainability.

The experience of KUDs and BUMDes shows one important lesson: success is not determined by the existence of assets, but by the appropriateness of the business model and the quality of governance.

We must not end up with buildings standing, facilities complete, and pick-up trucks available, but the cooperative’s business model not working. Even when there are logistical needs, the decision does not automatically mean vehicle ownership.

From a financial management perspective, purchasing pick-up trucks is a capital expenditure (CAPEX) – a large initial investment.

However, the burden does not stop at the purchase. There is operation and maintenance (O&M): that is, the costs of maintenance, spare parts, taxes, insurance, depreciation, and the risk of damage.

In addition, there are costs for permanent drivers if the cooperative is not managed on a voluntary basis. If the frequency of use is low, the cost per transaction will be high. Assets that are not used optimally will burden the cooperative’s balance sheet.

Therefore, it is necessary to compare rationally: is it more efficient to buy, rent, or partner with local transport operators?

Is a three-wheeled cargo motorcycle sufficient for a particular village? In fact, for some villages, vehicle ownership may not be necessary at all.

Needs assessment requires that these questions be answered first before a solution is decided upon.

Public Spending and Strengthening Domestic Industry

The second equally important aspect is the policy choice regarding domestic production. With a value of IDR 24.66 trillion, the procurement of 105,000 vehicles is not just an operational decision for the cooperative. It is a macroeconomic policy with a large potential multiplier effect.

The national automotive industry has established production capacity, including in the light commercial vehicle segment. This sector employs a large number of workers and drives the supply chain of components – from metals, glass, and plastics, to supporting small and medium-sized industries.

If the vehicles are produced domestically, this public spending can increase the utilisation of factories, expand employment opportunities, and strengthen the national industrial structure.

Every rupiah of public spending has the potential to circulate within the country, creating a layered effect for the economy. Conversely, large-scale imports have the potential to transfer added value abroad. In the current competitive global context, many countries are using fiscal policy and public procurement to strengthen their domestic industries.

Therefore, the question of imports becomes relevant: is the domestic industry really unable to meet the need?

If the capacity is available, then prioritising domestic production is not just a technical choice, but a national development strategy.

Public spending should work twice: to meet the needs of villages and at the same time strengthen the nation’s economy.

Conclusion

We certainly want the Merah Putih Village Cooperative to be the locomotive of the village economy. However, a locomotive does not run because of the number of assets, but because its engine is strong and its track is right.

In this context, the engine is the cooperative’s relevant business model and professional governance. The track is an honest and data-driven needs assessment. The vehicle is just a tool – its relevance must be proven.