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🇮🇩 Indonesia /Economy & Trade

UGM Economist: KDMP Program Design Deviates from Cooperative Principles

From Republika · () Indonesian

Translated from Indonesian, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • An economist from Gadjah Mada University (UGM) criticized the rapid, large-scale formation of the Red and White Village/Kelurahan Cooperatives (KDMP).
  • The economist argued the program's design deviates from cooperative principles, burdening them with government targets instead of member needs.
  • He stressed that healthy cooperatives require time, member participation, and genuine economic activity, not just meeting formation targets.

The rapid and widespread establishment of Red and White Village/Kelurahan Cooperatives (KDMP) across Indonesia is drawing criticism from an economist at Gadjah Mada University (UGM). Amirullah Setya Hardi argues that the program's design potentially deviates from the fundamental principles of cooperatives as defined by law.

KDMP, what is its purpose? Many. Is it true (that its purpose is many -Red)? It shouldn't be, because the purpose of a cooperative is singular. It's to meet members' needs, that's it, that's all.

— Amirullah Setya HardiEconomist at Gadjah Mada University criticizing the design of the KDMP program.

According to Amirullah, cooperatives should primarily exist to fulfill the needs of their members. However, he observes that the KDMP program burdens these cooperatives with various government agendas and targets. This, he believes, risks distancing cooperatives from their core identity as businesses owned and controlled by their members. "KDMP, what is its purpose? Many. Is it true (that its purpose is many -Red)? It shouldn't be, because the purpose of a cooperative is singular. It's to meet members' needs, that's it, that's all," Amirullah stated.

In a short time, everything that was on the agenda was completed.

— Amirullah Setya HardiCommenting on the rapid formation of KDMPs.

He highlighted the sheer scale and speed of KDMP formation, noting that the government aimed to establish approximately 80,000 village/kelurahan cooperatives. Data shows that over 81,000 out of Indonesia's 83,000+ villages/kelurahans have formed KDMPs. Amirullah cautioned against using this high formation number as the sole measure of success, suggesting that such large-scale, simultaneous establishment might lack in-depth assessment of each village's specific needs, feasibility, and economic capacity.

I'm not blaming, but is this essential to say that quality has increased? I think this is a note.

— Amirullah Setya HardiExpressing reservations about the quality of KDMPs formed rapidly.

Amirullah emphasized that healthy cooperatives cannot be created instantly. They require a process, active member participation, and business activities that provide tangible benefits. He also pointed out that not all villages have the economic conditions or needs to support new cooperatives, stressing that their formation should stem from community-driven needs and processes, not just target fulfillment. He urged the government not to be solely proud of the number of cooperatives formed, but to measure success by organizational health, member participation, annual member meetings, legality, and the ability to operate independently.

Remember, yes, cooperatives must be healthy.

— Amirullah Setya HardiConcluding remark on the importance of cooperative health.
DistantNews Editorial

Originally published by Republika in Indonesian. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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