Indonesia launches Merah Putih Village Cooperatives to boost rural economies

The Indonesian government has rolled out the Merah Putih Village Cooperative (KDMP) program as a Strategic National Project aimed at strengthening village‑level economies. Minister of Villages and Rural Development Yandri Susanto explained that profits from the cooperatives are largely returned to the community, with remaining earnings feeding the village’s own development fund. Director General of Village Governance La Ode Ahmad P. Bolombo described the initiative as a concrete tool for shifting development focus from cities to villages.

By June 2026, more than 83,000 cooperatives—99.66 % of the national target—had been legally established, creating thousands of jobs and providing assets such as warehouses, transport vehicles and distribution facilities to improve local producers’ market access. Critics, however, warn that the scheme may merely expand market channels without addressing the persistent low bargaining power of farmers, fishers and micro‑enterprises, echoing concerns raised a century ago during Sukarno’s era. They argue that true economic sovereignty for villages will depend on whether the cooperatives can capture more value from the supply chain rather than just facilitating sales.