Observer: Merah Putih Village Cooperatives' Operations Must Prioritise Business Readiness
The planned soft launch of the Merah Putih Village/Sub-district Cooperatives (KDKMP) operations in October must be accompanied by business readiness, according to Yusuf Rendy Manilet, an economist at the Centre of Reform on Economics (CORE) Indonesia.
Speaking in Jakarta on Tuesday, Yusuf stated that the completion of physical construction does not automatically indicate that the cooperatives are ready to conduct business activities. He noted that the government needs to ensure that administrative and management aspects of the KDKpend are finalised before the cooperatives begin operating as business entities.
The government previously stated that approximately 23,000 KDKMP units have completed construction, with around 17,000 of them currently undergoing verification and validation.
“What needs to be examined is not just whether the outlets have been established, but whether the assets are clear, who is responsible for operations, where the working capital will come from, what will be sold, who the buyers are, and what transaction volume is required to cover costs,” said Yusuf.
He argued that such readiness is crucial because the level of preparedness among individual cooperatives is likely to be inconsistent. He added that cooperatives lacking managers, working capital, suppliers, and clear buyers do not yet possess a sufficient foundation to operate fully.
According to Yusuf, if these aspects are not ready, opening the outlets risks creating fixed costs at the cooperative and village levels—such as salaries, electricity, maintenance, and vehicles—while revenue has yet to be generated. He believes the government must distinguish between physical, institutional, and commercial readiness to ensure the opening of outlets is not merely ceremonial, but the start of a sustainable business venture.
Minister of Cooperatives Ferry Juliantono stated that the Merah Putih Village/Sub-district Cooperatives will begin their operational soft launch in October 2026. Speaking at the Second National Conference on People’s Plantations in Jakarta on Monday (21/9), Ferry mentioned that KDKMP operations can commence once the Presidential Regulation regarding the operational governance of KDKMP is signed by the President. However, he did not specify the number of KDKMP units included in the soft launch.