Indonesia‘s Ministry of Cooperatives says it wants the newly created red and white village co-operatives to be fully operational by mid-2026.
Through the ambitious $12bn programme, the government hopes to stimulate rural economies through the creation of 80,000 village co-ops, with the aim of shortening supply chains, cutting out middle men, improving market access and creating jobs.
The programme will also include services such as microloans, small health clinics, cold storage for meat, and the sale of subsidised medicines, staple foods and cooking gas, say ministers.
The current phase of the project is focused on building physical infrastructure such as kiosks, warehouses and business facilities.
According to a report in news magazine Tempo, the project is showing progress, with co-ops already managing large-scale health services, agriculture, and retail operations.
Tempo adds that Ministry of Cooperatives secretary Ahmad Zabadi has said the village co-ops will work alongside the existing network of village-owned enterprises. This is another recently created model of business: outfits are managed and established by a village, and work in sectors ranging from agriculture and mining to tourism and retail. It is hoped this link-up will cut prices of staples such as fertiliser and fuel.
If the red and white village co-op programme is to succeed, mentoring and education in co-op management is vital. Efforts in this line are being delivered by students through the study and community service scheme (KKN), with the goal of encouraging innovation and digitisation and improving understanding of the co-op model.
The government has also mobilised 100 leading co-ops to mentor villagers, strengthen human resource capacity and improve co-operative governance.
Also drafted in to support the project is the Indonesian National Armed Forces, which is helping with the verification and establishment of the village co-ops.
Meanwhile, in November, state-run consultancy firm Agrinas Pangan Nusantara negotiated the purchase of 160,000 trucks and 160,000 motorbikes for use by the co-ops. It is hoped this move will provide a stimulus for the country’s struggling auto industry.
Ministers have reportedly been in talks with German software business SAP and Indonesian telco firm Telkomsel to set up the IT system and e-commerce platform that will be used by the co-ops.
The government has also called for the expansion of co-operative university education and financial institutions to boost the sector’s role in the national economy.
The $12bn cost of the red and white village co-op programme will come in loans from all of the country’s state banks, including Bank Mandiri, Bank Rakyat Indonesia and Bank Negara Indonesia. The loans will be guaranteed by the government, say ministers.
