This report scrutinizes the proposed Koperasi Desa Merah Putih (Kopdes MP) program and its implications for village governance, finance, and local enterprise. Drawing on field perception data, the authors find broad apprehension among village officials: 76% oppose financing Kopdes MP via state-owned banks (Himbara) with Village Funds (Dana Desa) used as the loan-repayment source; six in ten villages feel constrained in allocating Village Funds to community priorities; 65% fear corruption risks; 46% anticipate social conflict; and three in ten worry Kopdes MP will undermine BUMDes development. The report also quantifies potential fiscal leakages, around IDR 60 million per village per year, with Village Funds exposure of ~IDR 420 million per village to service installments and an aggregate underground-economy leakage of IDR 4.8 trillion annually if Kopdes MP proceeds as designed. It further warns the scheme could be repurposed for political consolidation, projecting 34–46 legislative seats potentially influenced through Kopdes-based mobilization.
Beyond diagnosing risks, the report offers alternatives: it urges Bank Indonesia and the OJK to run stress tests on state banks’ exposure to Kopdes MP, proposes inclusive cooperative-financing models (e.g., third-party blended finance, pooled assets, and robust member participation), and emphasizes capacity building through Balai Latihan Kerja (BLK) to address villages’ top demand, jobs, rather than locking scarce Village Funds into debt service. The recommendations aim to “grow cooperatives without breaking the village” by prioritizing fair markets for co-ops, bottom-up governance, and multi-stakeholder collaboration that strengthens BUMDes instead of crowding it out.
Bibliography:
Askar, M. W., Muhammad, G. D., Setiadi, B. M., Lianasari, A., Darmawan, J., & Fikri, B. (2025, June). Ko Peras Desa Merah Putih: Pedoman pelaksanaan, perubahan, dan alternatif program. Jakarta: Center of Economic and Law Studies (CELIOS). Editor: Bhima Yudhistira Adhinegara.