Government to Utilise Cooperatives as Primary Instrument to Pursue 8% Economic Growth

The government is committed to making cooperatives the primary instrument for driving the 8% economic growth target. Deputy Minister of Cooperatives Farida Farichah stated that high economic growth would lack significance without equitable distribution. Consequently, cooperatives, such as the Merah Putih Village/Sub-district Cooperatives (KDKMP), are viewed as the most appropriate tools to achieve this balance.

Farida noted that there are currently 222,000 active cooperative units nationwide, including 83,000 KDKMP units. The cooperative sector currently serves approximately 31 million active members, with accumulated capital of around Rp300 trillion, total assets of Rp325 trillion, and accumulated surplus of nearly Rp8 trillion. To maximise their role, the Deputy Minister emphasised that cooperatives must be encouraged to re-enter the production sector to increase the multiplier effect on the economy. This requires institutional consolidation, human resource capacity building, and broader access to financing.

The government is also promoting technology adoption and digitalisation to strengthen governance. Farida suggested two main approaches: incubating small-scale cooperatives and strengthening large-scale production cooperatives. The Ministry of Cooperatives will strengthen regulation, facilitation, and guidance, collaborating with stakeholders such as the Financial Services Authority (OJK) and the revolving fund agency (LPDB) to ensure cooperatives can grow and compete.

In the livestock sector, the Director General of Livestock and Animal Health at the Ministry of Agriculture, Agung Suganda, identified significant potential for cooperatives. He noted that national milk production currently meets only 20% of domestic demand, necessitating annual imports worth approximately Rp25 trillion. With the implementation of the Free Nutritious Meal (MBG) programme, demand is expected to rise, presenting an opportunity for cooperatives to boost productivity and reduce import dependency.

Furthermore, the government has initiated a national recruitment process for 35,476 positions to manage KDKMP and Merah Putih Fishing Villages (KNMP). There is also a target for 20,000 KDKMP units to receive financing in 2025 as part of the effort to accelerate the operations of 80,000 KDKMP units.