Economist stresses importance of building healthy Kopdes Merah Putih

Jakarta (ANTARA) - Yusuf Rendy Manilet, an economist from the Centre of Reform on Economics (CORE) Indonesia, has reminded the government of the importance of ensuring that the Kopdes Merah Putih cooperatives can operate healthily and sustainably as business entities, rather than merely possessing physical buildings. This statement comes amidst the government’s target to operate 20,000 to 30,000 Kopdes Merah Putih by August 2026, following the official launch of approximately 1,000 cooperatives in Central Java and East Java last month.

According to Yusuf, when contacted in Jakarta on Friday, the physical construction of cooperatives can indeed be completed relatively quickly due to supported budgets and clear deadlines. However, the greater challenge lies in building business activities capable of surviving and growing. “Building a living business requires working capital, functional supply chains, competent managers, and real demand from the community,” he said.

He added that the target of operating thousands of cooperatives in a short period must be balanced with attention to the quality of the businesses being run. He assessed that the success of the programme is ultimately not determined by the number of cooperatives established, but by the ability of the cooperatives to conduct economic activities sustainably.

Yusuf also highlighted the aspect of cooperative financing, which requires careful attention. According to him, some Kopdes Merah Putih were formed with the support of loans, meaning they must possess the ability to generate adequate revenue to meet their financial obligations.

Furthermore, he warned that past experiences show numerous village economic institutions were established with ambitious targets, only to later lose business activity due to the lack of a strong business model. As a result, he continued, the buildings and institutions remain, but their economic functions do not operate as expected.

Yusuf believes the government needs to ensure the readiness of business models, the capacity of human resource managers, supply chains, and market potential in each village so that Kopdes Merah Putih can develop into healthy economic institutions that provide long-term benefits to the community.