MEDAN | INDATANEWS.COM – The Indonesian Ministry of Cooperatives is intensifying efforts to reduce poverty in rural areas through the development of the Koperasi Desa Merah Putih (Red and White Village Cooperatives). The government views the program as a key driver to boost purchasing power for local products while accelerating sustainable economic growth at the village level.
Government Targets Poverty Reduction Through Cooperative ExpansionThe Deputy Minister for Cooperative Enterprise Development at the Ministry of Cooperatives, Panel Barus, stated that the government is actively promoting poverty alleviation across rural regions by strengthening the village cooperative model.
Read Also: Deli Serdang Accelerates Village Cooperatives to Boost Local Economy "The government created this program as a shared economic platform to organize village economic activities in a more structured way," Panel Barus said during a public lecture at the Universitas Muhammadiyah Sumatera Utara (UMSU) on April 30, 2026.
He added that the cooperatives are designed to establish a new economic cycle that keeps financial flows circulating within local communities, thereby generating direct economic benefits for rural residents.
ECONOMIC GROWTH THROUGH COOPERATIVES: Deputy Minister Panel Barus outlines strategies to strengthen village cooperatives to boost economic growth and reduce rural poverty. (PHOTO: Teguh Panjaitan)
Local Value Creation and Sustainable Economic CirculationAccording to the ministry, increased purchasing power for products produced by village cooperatives directly contributes to improved community welfare. The cooperatives market a wide range of local commodities, including agricultural products, plantation goods, livestock, and small and medium-sized enterprises (SMEs), through integrated distribution systems.
Panel Barus noted that rising transaction volumes within village cooperatives will open more income opportunities and create new jobs, while also reducing rural dependence on urban migration for employment.
RURAL POVERTY ALLEVIATION EFFORTS: The government relies on cooperatives to address economic challenges directly at the village level. (PHOTO: Teguh Panjaitan)
Modern Cooperatives and Economic Equality Strategy
The government is also promoting the development of modern, digitally enabled village cooperatives as part of a broader strategy for economic equality. Profits generated are expected to be reinvested into community development rather than concentrated among limited groups.
"The ministry is strengthening cooperative infrastructure, expanding digital marketing for village products, and improving the competencies of cooperative managers to ensure optimal implementation," Panel Barus explained.
He emphasized that consistent and proper execution of the program is essential for long-term economic growth.
"If this concept is fully and correctly implemented, it can sustainably increase economic growth. Rising purchasing power will also drive higher consumption, which in turn fuels further growth," he said.
Toward Self-Reliant and Prosperous VillagesThe Indonesian government hopes that Koperasi Desa Merah Putih will become a symbol of a strengthened solidarity economy and serve as a foundation for independent, productive, and prosperous villages across the country. (IDNC)
REPORTER:
Teguh Panjaitan | EDITOR:
Fik Sagala