Modern Retail Store Closures to Support Village Cooperatives Risk Rising Unemployment, Experts Warn

The policy is also feared to increase unemployment and create social issues in society. Labour market analyst from BPJS Watch, Timboel Siregar, said that positioning modern retail outlets as competitors to the Village Cooperative (KDMP) could lead to widespread economic impacts if not thoroughly assessed. “With this government policy, more job losses will occur. Amid rising unemployment due to the government’s inability to create jobs, this policy towards modern retail outlets will only add to the number of unemployed,” Timboel told Kompas.com on Wednesday, 27 May 2026. He noted that all previous licensing processes had undergone local government checks. “If they were deemed to violate regulations from the start, permits would not have been issued. In reality, these outlets have been operating and providing economic benefits to the community,” he said. Timboel stated that modern retail has long been a significant absorber of formal employment, especially for young workers. The sector not only creates jobs. Modern retail also provides income certainty, working hours, social security protections, and tax contributions to the state. “Modern retail outlets offer formal jobs with guaranteed fair wages, social security, workplace safety, and contribute to national revenue through both employee and business taxes,” he added. Both business models can coexist and compete healthily to deliver the best services to the public. “Let modern retail outlets and KDMP operate and compete healthily. The public will then decide based on service quality and product prices,” Timboel said.