Gov’t Plans to Establish Red and White Cooperative in Villages

President Prabowo chairs a limited meeting with several ministers of the Red and White cabinet, at the Merdeka Palace, Jakarta, on Friday (03/07). (Photo by: BPMI of Presidential Secretariat)

President Prabowo Subianto chaired a limited meeting with several ministers to discuss a plan to establish Red and White Village Cooperative.

According to Minister of Cooperatives Budi Arie Setiadi, the village cooperative program was designed to improve the welfare of village communities and overcome economic problems in rural areas.

“The establishment of the Red and White Village Cooperative primarily serves the interests of village communities. This program aims to break the poverty chain in villages and boost villagers’ income.” the Minister said to the press after the limited meeting on Friday (03/07), at the Merdeka Palace, Jakarta.

Furthermore, Minister of Home Affairs Tito Karnavian underscored that villages play a strategic role in the national economy. He added that 44 percent of Indonesia’s population still lives in villages and without proper intervention, villages could experience economic decline as happened in developed countries.

“In Japan, 84 or 86 percent of people live in cities. Villages are abandoned, even though these villages can contribute to economic growth and become economic centers. So, before it is too late, we need to fortify the villages,” he said.

In addition to being a catalyst for the village economy, the Red and White Village Cooperative is also expected to resolve the problems of online loans, middlemen, and loan sharks that have been burdening village communities. Budi Arie underlined that the cooperative will provide healthier and more equitable access to capital for rural communities.

“Earlier, Mr. President said that the Red and White Village Cooperative aims to break the moneylenders, middlemen, and online loan schemes that trap [the communities] and become a source of poverty in the villages. Through the establishment of this program, which includes a savings and loan unit, village communities are significantly supported in terms of funding and are no longer trapped in the vicious cycle of poverty,” the Minister said.

Minister of Home Affairs also added that this village cooperative program will serve as a representation of the state to protect village communities from informal lending systems that do not have legal protection mechanisms. “This program is here to represent the state. The state is here to save them, to stop them from depending themselves on online loans, middlemen, and loan sharks who cannot be held legally accountable,” he said.

Being a part of national programs, the Government fully supports this cooperative program. One form of support is through state-owned bank financing, which is expected to provide a loan of Rp5 billion for each village cooperative to build supporting facilities such as warehouses, cold storage, savings and loan units, and village clinics.

Tito also said that the Government will immediately disseminate the program to village heads, village officials, and related associations as a follow-up to this limited meeting to ensure a uniform understanding of the program.

Through this program, the Government expressed hope that villages can become independent centers of economic growth, not only to maintain food security but also to improve the overall welfare of the community. This program is also expected to be implemented in all villages in the near future. (BPMI of Presidential Secretariat) (FI/MUR)