Viral KDMP Product Range Resembles a Minimarket, Economist Warns

JAKARTA, KOMPAS.com - Economist Raden Pardede highlights products sold by Koperasi Desa/Kelurahan Merah Putih (KDMP) as being similar to those sold in minimarkets. For information, recently circulating videos show KDMP openings in various regions. From the videos, the products sold at KDMP appear not far different from minimarkets, ranging from snacks, staple goods, to kitchen needs. Pardede notes that the government’s priority programme risks not delivering significant economic impact if it merely shifts businesses from existing players. He adds that if you refer to the implementation of cooperatives in other countries, successful models typically grow from the bottom up. For example Fonterra in New Zealand, which started from a group of dairy farmers and built up to a large global cooperative. Meanwhile KDMP uses a top-down development model because here the government plays a greater role from forming the programme, funding, to credit support. The community only carries out the design set by the government. He says that if KDMP only shifts consumers and workers from warungs or minimarkets to the cooperative, the net economic impact will be limited. “If that is the case, the impact of KDMP will be small. Because it would only shift from warung or Indomaret, Alfamart to here. The workers would also shift later,” he said. Nevertheless, Pardede emphasises that the effectiveness of KDMP still needs to be proven in on-the-ground implementation. He also reminded the government that the programme should not merely be a new distribution channel that takes market share from existing businesses without creating additional economic activity. “This, in my view, remains to be tested. But I am here merely cautioning the government. Its impact may not be optimal,” he concluded.