SUAR Special Interview with Minister of Cooperatives Budi Arie Setiadi 

Red and White Village Cooperative is expected to become an economic engine in the villages. Supervision is carried out by residents, the government only lends capital. After activating more than 80,000, it is now entering the operational phase. 

Minister of Cooperatives Budi Arie Setiadi traveled to villages to motivate the establishment of cooperative institutions owned by villagers. He also met with various village organizations, convincing them of the need to establish cooperatives at the village level.

"I told them, this cooperative will be in the village, not in the palace, not in the office of the Ministry of Cooperatives. Capital is also provided directly, if the Village Fund is only Rp1 billion, we give Rp3 billion. So they will manage it, they don't want to," Budi said. 

By utilizing his network, in just a matter of months, Budi was able to gather the establishment of the Merah Putih Village Cooperative to 80,000 units, meeting the target set by President Prabowo Subianto. The launching of the Merah Putih Village Cooperative could also be held simultaneously on July 21, 2025. 

Budi said that the initiative to establish red and white cooperatives in these villages had been rolled out since March. It was introduced to regional heads during a retreat in Magelang. 

The Merah Putih Village Cooperative Program has also received criticism from the public. Even so, Budi Arie guarantees that this policy can benefit the village community. Regarding supervision, certainly not only the government will control.

"If some village cooperatives are successful, the less successful village heads will certainly be criticized by their citizens. So I am sure that the public will participate in monitoring this program," he said. 

Last Wednesday, July 23, 2025, Cooperative Minister Budi Arie received SUAR journalists at his office in Kuningan, Jakarta. He said he was optimistic that the program would run well. He also explained various strategies so that the Merah Putih Village Cooperative could run and have a positive impact on the community. The excerpt: 

SUAR: Many people think that the Red and White Village Cooperative program is a top down program, so it's not purely a community initiative. Your response?

BUDI ARIE: No, this is just the idea. And don't be allergic to the word top down. What's wrong with top-down? Because the existence of the Merah Putih Village Cooperative proves that the state is in favor of the people's economy. 

If it is not top-down, it means that the state does not have the initiative to develop the economy of its people. So the concept is that the state is present there. We want there to be partiality first. 

The existence of this red and white village cooperative proves that the state is in favor of the people's economy. 

SUAR: So what is the pathway for people's participation in this program?

BUDI ARIE: These cooperatives are established in villages, well, the ownership and members are villagers. In addition, all citizens have the right to oversee the management of this village cooperative.

SUAR: The government claims there are more than 80,000 village cooperatives that have been formed. Do you think all of them will work?

BUDI ARIE: Right now we are starting the second chapter. Previously we have passed the first chapter, activation. There have been 80,000 cooperatives activated. I also did not expect it to be this fast. 

Now, we are entering the second phase, which is operation. Later, when operating, this cooperative will provide services. The operation has already started to serve the community. That's it. 

The third phase is monitoring, evaluation, and development of the business. 

SUAR: Are you sure this program can work?

BUDI ARIE: Yes, of course things will not always go as expected. But let's say there are some that work and are successful, out of 400 village cooperatives that run for example in one district, there are 100 that are good, yes the 300 cooperatives that don't perform will be protested by the residents. Why can't they be successful. So everything will be directly supervised by the people. This is what makes me confident. 

SUAR: Village cooperatives are also expected for distribution efficiency, what is the concept?

BUDI ARIE: Since the beginning I reported to the President, the development of this cooperative is indeed there, providing certainty, one of which is about prices. Nowadays, there are middlemen in the community. To fight against that, we also need tools to fight against the middlemen, what are their weapons? Money, right. Well, we provide capital at the beginning, so the weapon must be balanced to fight this middleman.  

So with this village cooperative, we want to break the distribution chain that is too long. Because we want to close the distribution chain, from the layers that can be up to seven, it can only be three. Who will benefit, the community too, right? 

This is also the same as what the president said, we want to eliminate economic vampires. 

SUAR: What about the election of the board, any special requirements?

BUDI ARIE: Yes, we need a valid SLIK. The management should also not have a blood relationship with the village head, so that there is no conflict of interest. Anyway, the wife, brother, son, daughter-in-law of the village head or those who have a blood relationship cannot be the management of this village cooperative. 

SUAR: Regarding efforts to keep the management of village cooperatives in line with GCG, what precautions will be taken?

BUDI ARIE: Yes, with digitalization. There is no money circulation in the management of village cooperatives. All digitalization. The business will use a channeling system. Cooperation with fertilizer companies to sell cheap fertilizer, for example, the government directly deals with the contract, the village cooperative is responsible as a distributor, so it will be safe from potential fraud. 

SUAR: Will it be encouraged that all of them will become consumer cooperatives?

BUDI ARIE: So we have to look at the first time when we want to build it, what is the goal? All the things that the community needs. That's why this village cooperative is more inclined to be a consumer cooperative. Providing basic necessities, LPG, rice, cooking oil, coffee, and so on.  

We haven't talked about cooperatives as production. If the doctrine is sir, the cooperative must be production, distribution, and industry. These all relate to consumers. 

So philosophically, the function of this village cooperative is to facilitate the increase in productivity and consumption of villagers, so as to accelerate the economy in the village. 

SUAR: But is it enough only through cooperatives to be able to prosper the community?

BUDI ARIE: So the strategy is this. With this village cooperative, we bring capital closer to the village. So far, villagers have business ideas, but the capital is difficult. Even when they find capital, they end up being resilient. It also brings technology closer to the village. We force everything to be cashless. So that the digital transformation takes place quickly, because the use of technology is the key to increasing productivity. 

The third, strategic thing is to train the community together to become business actors. If you are a business actor, there is a calculation. For loss. Even if, as a business, there must be a loss. as a risk of loss right. But not fraud.

But the point is that it's all together, a collegial collective. Because if you're alone, it's easy to break. S