The Grand Ambition of the Merah Putih Cooperative
The Merah Putih Village/Desa/Kelurahan Cooperatives Movement, conceived by the government through Presidential Instruction Number 9 of 2025, deserves recognition as a good intention. The target of forming tens of thousands of cooperatives at village and sub-district levels, accompanied by claims of digitalisation and access to financing, signals a bold ambition to strengthen the people’s economy. However, behind the enthusiasm lies a highly flawed approach that could bring new disasters to Indonesian villages.
Cooperatives are not production houses, village roads, or factory machines that can be mass-established merely by orders, budgets, and numeric targets. Cooperatives are living entities built on the spirit of idealism, mutual trust, and voluntary participation. They are born from the bottom, from shared awareness and real needs, not from top-down commands chasing quantitative targets alone. The ‘as long as it exists and the number is that’ approach taken by the government betrays the very essence of cooperatives.
The bitter experiences of the past should already be enough as lessons. Thousands of cooperatives established en masse in earlier eras are now mostly dormant, burdensome, or merely names on paper. Now, with the ambitious target of tens of thousands of Merah Putih Cooperatives, the same pattern is repeated on a larger scale.
Even more troubling, many cooperatives are established in locations that are far from ideal for business activities. A concrete example is the Merah Putih Cooperative in Kediten Village, Plantungan District, Kendal Regency, which sits on the slopes of Mount Prau at an altitude of more than 1,300 metres above sea level. A beautiful location for photos, but difficult to access, far from the main settlements, and with little economic traffic. The impression is strong: this is just to be done, to have a building, to meet the target. Without serious feasibility studies, without considering market access, proximity to communities, logistics, and long-term sustainability potential.
In other regions, cooperative development has actually sparked resistance from residents because it was built on village fields that have long served as public spaces (such as in Sidoarjo, Lamongan, Wonogiri, and Pati), or on land far from settlements. This approach ignores the basic principle of sustainability.
The village heads and ward heads are encouraged to become the driving force, even the overseers. Village funds are allocated. Targets are pressed from above. The result? Many cooperatives potentially emerge as ‘project cooperatives’ — formed for reporting, for funds, for image-building, not for members’ welfare.
The main problem is the total neglect of human factors that are uncontrollable. Members have diverse motives: from idealists to opportunists. Without strong social capital, without deep education in cooperative values, and without solid governance, cooperatives easily become arenas for local politics, places to share projects, even new fields for corruption. The line between member-owned cooperatives and the village-owned BUMDes becomes blurred. Transparency is weak. Village HR management with minimal business knowledge becomes a time bomb.
This approach is not only naive but dangerous. It risks creating thousands of zombie cooperatives that burden the national budget through various subsidy schemes and loans that later stall. Even more seriously, mass failure could erode public trust in the cooperative movement as a whole in the future.
This critique is not intended to reject the cooperative movement, but to prevent it from becoming a colossal waste and a mass disappointment. The government must urgently change its paradigm from mass formation to organic, high-quality empowerment:
Stop the quantity-target approach. Start with villages that are ready, have grassroots initiative, strong social capital, and strategic business locations.
Involve communities substantively, not merely through formal socialisation. Cooperatives must be owned and controlled by members, not by village authorities.
Prioritise long-term education and mentoring, not just ceremonial training.
Protect financial independence. Excessive dependence on government funds will turn cooperatives into an extension of state project.
Conduct strict independent monitoring and audits, and be bold to revise targets if field reality shows failure.
The Merah Putih Cooperative has great potential if built with the realisation that it is a fragile social-economic structure, not just another infrastructure project. Without authentic gotong royong spirit and careful planning, this movement will only add to the number of inactive cooperatives and leave new scars on the people’s economy.
The real people’s economy does not arise from palace edicts, but from the people’s own awareness and initiative from below. (H-4)
The South Tangerang City Government (Pemkot Tangsel) continues to push for strengthening the micro, small, and medium enterprises (UMKM) sector as the backbone of the local and people-powered economy.
Support for the people’s economy and the micro, small, and medium enterprises (UMKM) sector is considered not only part of the development mandate. The National Nutrition Agency (BGN) notes the economic impact of the Free Nutritious Meals (MBG) program for one year, from involving 46 thousand UMKM to absorbing 780 thousand workers. The Ministry of Finance (Kemenkeu) and Bank Indonesia (BI) strengthen policy coordination of fiscal and monetary to support the implementation of Government’s Asta Cita program, particularly related to strengthening the people’s economy. Villages and sub-districts will be the backbone of growth in a real economy based on gotong royong, tradition, and culture.