President Prabowo: Red and White Cooperatives to Become Rural Economic Hubs, Main Distribution Channel for Government Subsidies
President Prabowo Subianto reaffirmed that the Red and White Village/Subdistrict Cooperatives (Koperasi Desa/Kelurahan Merah Putih, KDKMP) will serve as integrated rural economic service hubs and a key instrument for improving people’s welfare. The President made the remarks during his address at the peak commemoration of the 79th National Cooperatives Day, held at Indonesia Arena in Jakarta on Sunday (07/12).
“The Red and White Village/Subdistrict Cooperatives will become integrated rural economic service hubs. Each cooperative will include a cooperative office, a basic necessities store, savings and loan services, and a village pharmacy. We will establish pharmacies in villages, supplying generic medicines that are much more affordable than those sold in urban pharmacies. There will also be village logistics services, warehouses, cold storage facilities to prevent farmers’ produce from spoiling, and various other economic services,” the President said.
President Prabowo explained that the idea of establishing the Red and White Village/Subdistrict Cooperatives had been on his mind since his years serving as a military officer in various parts of Indonesia. Witnessing firsthand the hardships faced by rural communities convinced him that cooperatives are the most effective means of strengthening the people’s economy while protecting those at the grassroots level.
“I became increasingly convinced that the only way to protect the most vulnerable members of society is through the strength of cooperatives,” the President said.
According to the President, one of the greatest challenges faced by farmers is limited access to affordable financing. Even when harvests improve, many farmers remain trapped in high-interest debt to loan sharks because they need funds to cover their living expenses throughout the planting season. To address this issue, he emphasized that every village should have a savings and loan cooperative capable of providing low-interest financing.
“Our people must have access to affordable loans. The answer is to establish savings and loan cooperatives in every village across the Republic of Indonesia,” the President stressed.
The President also expressed hope that the Red and White Village/Subdistrict Cooperatives would help free communities from their dependence on loan sharks while serving as the primary distribution channel for government-subsidized goods to ensure they reach their intended beneficiaries.
“All subsidized goods must be distributed to the people through the Red and White Village Cooperatives. They must. Let me be clear: they must. Goods subsidized by the government for the people must not be traded. Those who truly need them should be the ones who receive them,” the President emphasized.
The initiative will also benefit coastal communities, with the government planning to strengthen fishermen’s cooperatives by providing cold storage facilities, ice plants, and fishing vessels to be managed collectively through cooperatives. President Prabowo stressed that these facilities would be financed through schemes allowing cooperatives to repay the investment from the proceeds of their business activities, thereby creating a sustainable economic system.
The President projected that the Red and White Village/Subdistrict Cooperatives would stimulate the national economy by generating up to Rp223 trillion in annual economic activity across villages while increasing the incomes of farmers, livestock breeders, and fishermen by as much as Rp202 trillion. At the same time, the government is committed to improving the national logistics system to make it more efficient and reduce distribution costs.
“Experts agree that Indonesia’s logistics system is among the least efficient and most expensive. This is what we are determined to fix. We will make it far more efficient,” the President said.
Through the Red and White Village/Subdistrict Cooperatives, the government aims to build a more self-reliant, equitable, and integrated rural economic ecosystem. The cooperatives are expected to serve as one-stop service centers where communities can access financing, market their products, purchase affordable essential goods and medicines, and receive government subsidies more accurately and efficiently. (BPMI of the Presidential Secretariat) (AY/LW)
