Indef: Rp100 Million Penalty for 'Red and White' Cooperative Manager Selection Could Deter Applicants

The Institute for Development of Economics and Finance (Indef) considers the National Selection Committee’s (Panselnas) decision to cancel the Rp100 million penalty provision for prospective managers of the ‘Red and White’ Village Cooperatives (KDMP) to be appropriate. Head of the Macroeconomics and Finance Centre at Indef, M. Rizal Taufikurrahman, stated that an approach based on incentives and professional employment contracts is far more effective.

“Regarding the cancellation of the Rp100 million penalty for managers who resign, this step is more appropriate from an institutional economics perspective,” Rizal said in an official statement in Jakarta on Wednesday (17/6/2026).

Rizal explained that although the penalty’s initial purpose was to ensure participants’ commitment after receiving state-funded training, the sanction had the potential to reduce interest from competent experts. He stressed that the success of the ‘Red and White’ Cooperatives depends heavily on the quality of the human resources managing them.

“An approach based on incentives and professional employment contracts is more effective than a punishment that could potentially reduce the interest of the best talent,” he added. He urged that the selection process be designed professionally to retain high-capacity management personnel.

Previously, Panselnas, through Announcement Number 09 of 2026 signed by the Deputy Head of the State-Owned Enterprise Regulatory Body, Tedi Bharata, officially revoked the Rp100 million penalty provision for prospective ‘Red and White’ Cooperative managers. This decision applies to participants in the 2026 KDMP and ‘Red and White’ Fishermen’s Village human resources selection, removing point 13 in Appendix I of the Statement Letter which previously mandated financial consequences for participants who withdrew.