Eighty thousand village cooperatives. Rp 31 billion in daily transactions. Some two million dollars circulating every day through a network that has barely begun to be built. Indonesia launched the Kopdes Merah Putih program. The stated ambition is to have an active cooperative in every village before the decade ends.
The figure is impressive. It's still a target, not a consolidated result. A cooperative decreed from Jakarta is not the same as one that emerges because a group of people decided to pool capital and take on risk together. A genuine cooperative is one where members control the capital and the decisions because they themselves built it. It doesn't depend on a numerical target set by a ministry. That distinction separates Kopdes Merah Putih from the models celebrated in international discourse.
Gadjah Mada University has already issued a public warning. The message is uncomfortable and direct. Indonesia risks repeating the institutional collapse experienced with the KUD in the 1980s and, more recently, with the BUMDes. Two state-driven experiments, two ambitious targets, both captured by local political interests.
Mondragón offers the sharpest contrast. The Basque network was born in 1956 in a small town. No state capital. No decree. No imposed figure. Today it employs more than seventy thousand people who own their own work. It keeps expanding into the United States in cybersecurity and artificial intelligence, without ceding control to outside funds. Mondragón grew from the ground up. Kopdes Merah Putih is announced from above, with public budget and a numerical target defined before real governance exists.
This pattern shows up repeatedly in history. Soviet kolkhozes were imposed with collectivization targets set from Moscow. Mexican ejidos promised collective land ownership. Over time many ended up under local caciques or agrarian bureaucracy. Cooperativization figures kept growing in official reports. Real self-management fell behind.
Quantitative targets are easy to announce. Verifying whether those eighty thousand cooperatives have functioning assemblies, real internal elections, and genuine control over the credit they receive requires a different kind of work. That work generates few headlines.
Who actually benefits from this kind of program? Ministries get an expanded budget and a presentable metric to show the UN and voters. Indonesian state banks get a channel to place directed credit with political backing. Multilateral organizations get a case study to cite as evidence that the social economy is growing. This isn't happening only in Indonesia. UN resolution A/RES/80/182 institutionalized cooperative years as a recurring event. The International Labour Organization has pushed similar models in other countries.
The underlying problem is one of institutional design. A structure with real feedback lets information flow up from the base and correct the center. German credit cooperatives serve more than thirty million customers through autonomous local banks. Each one makes its own credit decisions. They federate through shared protocols. Mondragón solves the scale problem by keeping each unit limited in size and networking them together.
Kopdes Merah Putih, as currently designed, operates more like an open loop. The center issues the order. The center sets the target. The center channels the financing. The village receives the structure already assembled. Figures that are easy to announce. The target of eighty thousand cooperatives can be met in the reports without a single assembly ever voting with real autonomy over its own capital. Measuring activity is not the same as measuring self-management. Why does that distinction so rarely appear in official statements?
This matters for the recent reframing of the Washington Consensus toward the social and solidarity economy. International discourse risks equating models that aren't equivalent. When the UN or the ILO celebrate the growth of global cooperativism without distinguishing between Mondragón and Kopdes Merah Putih, they end up legitimizing radically different power architectures. One was born of collective savings and a historical distrust of outside capital. The other is born of a decree with a deadline and public funds.
In Stones Don't Lie, I explore how structures of imposed cooperation can hold up for decades. The cost of sustaining the simulation of participation usually exceeds the benefit of the extraction it supports. This isn't a judgment against Indonesia or its officials. It's an observation about institutional architecture. Without correction from the base, any structure tends toward centralized control rather than self-management. I've observed similar dynamics in different contexts.
We still don't know how the Indonesian experiment will end. Gadjah Mada University issued a warning. It didn't certify failure. Some of these cooperatives could, over time, develop real governance and break free from state financing. The figure itself reveals little about institutional quality. The bodies that draft resolutions flatten a distinction that, for the people living in these villages, is far more concrete.
Figures that shine in the reports. Reality that gets built the hard way.
What kind of feedback from the base would it take for these eighty thousand cooperatives to escape the fate of their predecessors?
Sources:
1. Gadjah Mada University (UGM) — public warning about the Kopdes Merah Putih program and its structural similarity to the KUD and BUMDes
2. UN General Assembly Resolution A/RES/80/182 on international cooperative years
3. Public records of Mondragón Corporación Cooperativa on governance structure and international expansion
4. Indonesian government reports on daily transactions of the Kopdes Merah Putih program (Rp 31 billion/day)
