"The establishment of 80 thousand Red and White Village Cooperatives across villages in Indonesia is an effort to increase village economic participation," he said in a statement here on Thursday.
He assessed that the extreme poverty rate in villages remains high due to the lack of employment opportunities and low wage.
This situation is deemed to have caused the flow of productive money in villages to be limited, and has led to the rise of loan sharks, middlemen, and illegal online lending practices.
"The Red and White Village Cooperatives are expected to be able to resolve these various problems by shortening the excessively long distribution chains for products and services, such as the distribution of fertilizers and 3-kg LPG (liquefied petroleum gas)," he remarked.
Furthermore, the deputy minister stated that the legal basis for the village cooperatives is Article 33 of the 1945 Constitution, which affirms that economic sovereignty is in the hands of the people.
He also pointed out data showing that many working-age people are leaving villages, resulting in stagnant village economies.
Therefore, he said, banking regulations have required banks to provide special credit to village residents through the village cooperatives.
According to Juliantono, the village cooperatives have various strategic functions, among others, becoming agents of 3-kg LPG, main distributors of subsidized fertilizers, and sellers of affordable medicines through village drugstores.
The village cooperatives also provide health clinic services, saving and loan services, as well as cold storage facilities.
Even though the cooperatives have been established, Juliantono noted that they are still in the operational technical development stage to ensure their capability to provide real economic benefits to the village communities.
President Prabowo Subianto officially launched around 80 thousand village cooperatives nationwide under the Red and White Village Cooperatives program in Klaten District, Central Java, on July 21.
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Translator: Arnidhya Nur, Raka Adji
Editor: Primayanti
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