Indonesia to Channel All Subsidized Goods Through Village Cooperatives

Indonesia's government will exclusively channel all subsidized goods through a single network of village cooperatives, a move aimed at eradicating distribution mafias and smuggling. Finance Minister Purbaya Yudhi Sadewa expressed confidence that this new policy, decided upon in a cabinet meeting with President Prabowo Subianto, will significantly benefit the Merah Putih Village Cooperatives.

"Yesterday it was decided in the cabinet meeting that all subsidized goods will be distributed through the Merah Putih Village Cooperatives and not sold outside of that," Purbaya stated in Yogyakarta on Thursday, July 16, 2026. He believes this will become a driving force for village cooperatives, making them the sole official channel for government-subsidized essential goods and promising substantial profit margins.

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Yesterday it was decided in the cabinet meeting that all subsidized goods will be distributed through the Merah Putih Village Cooperatives and not sold outside of that.

However, Purbaya cautioned that this success hinges on the proper management of funds and goods by cooperative officials. "So, just from that alone, the Merah Putih Village Cooperatives will definitely profit. As long as it's not corrupted, it should be safe," he said. To support this initiative, the government plans to provide substantial funding, with Purbaya mentioning a loan of up to Rp 240 trillion. This funding will come from state-owned banks (Himbara), with the principal and interest to be covered by the Ministry of Finance over the next six years, allocating approximately Rp 40 trillion annually.

Purbaya dismissed any skepticism regarding the state's fiscal capacity, asserting that Indonesia's financial condition is secure and sufficient for the program's sustainable realization. The government's focus has now shifted to strict oversight at the field level to ensure the program's implementation is orderly, clean, and minimizes fiscal irregularities.

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So, just from that alone, the Merah Putih Village Cooperatives will definitely profit. As long as it's not corrupted, it should be safe.