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Indonesian Cooperative Reform: Change Paradigm, Cooperative-build not building cooperative (part 2)

Blog by Moh. Faishol Khusni, MICRA Regional Manager East & Central Java.


In the second part of our blog about the Indonesian Cooperative Reform, we will discuss the two dimensions of the cooperative-building paradigm: the macro dimension where cooperatives are the principle and pattern of state action in building the nation's socio-economic welfare, and the micro dimension where cooperatives as actors of people's business entities that are treated on an equal footing with other business entities.

Macro dimension

In the cooperative paradigm, this refers to the development and management of the nation based on kinship, in which the state makes the people the main focus of nation-building. The state is obliged to give rights to its people to express their aspirations of nation-building, to be actively involved in nation-building, and to be the main audience for the results of national development. This allows the nation’s natural resources to be controlled solely for the welfare of the people and the entire wealth of the nation (State-Owned Enterprises (BUMN)) belongs to the people, not to the oligarchs.

This paradigm provides the same space and climate for building and developing the economic potential and capacity of the people to improve their economic and social welfare. By providing wide-open access, the community can:

  • Participate actively in efforts to improve the quality of human life and society.

  • Strengthen the economy which is the basis for the resilience of the national economy using cooperatives as pillars.

  • Strive to realize and develop the national economy which is a joint effort based on the principles of kinship and economic democracy.

Micro dimension

The paradigm of cooperative development on a micro basis is making cooperatives as business entities recognized by the state that can play a major role in managing the nation's resources. Cooperative business entities must become economic actors for their members and society in general.

The strategy "Building Cooperatives as a Business Entity" has been carried out by the government or the cooperative movement has not made cooperatives stronger but made them become weaker and more dependent. In a way, the term "building cooperatives" is like putting them as passive "objects" formed by the “subject”, instead of being an actor. They became the victim of political intervention, regulation, and interests which in the end weakened the cooperative. For this reason, the paradigm of "building cooperatives" must be changed to "cooperative-building" to project them as the main actors that can grow their capabilities.

This cooperative-building does not mean that other parties are not necessary. Prof. JG. Nirbito provides appropriate guidelines for fostering cooperatives, which includes minimal interference with regulatory instruments, especially political and budgetary interests, but still promotes collaboration and support to each other.

Working together and mutually strengthening each other are the ways in which a cooperative moves for the success of its members and community; and it must be properly guarded. By protecting these, the ideal modern cooperative will be strengthened and will lead to preventing colonialism, injustices, and powerlessness of its members. In this context, the government should have a stronger role in helping cooperatives not only with program funds, training, and business facilitation, but also in helping cooperatives uphold their identity, ideals, and independence.

On the other hand, the cooperative movement itself should not just rely on the government in expanding and building more cooperatives. It should help establish self-help capabilities and a strong identity which is the foundation of all big cooperatives in the country. Knowing the identity and maintaining the dignity of the cooperative is the key to establishing cooperatives and should not be pawned for any reason.

With a solid identity, the cooperatives function as a tool for Indonesia’s economic struggle to be mitigated and to enhance people's welfare. Cooperatives should be a medium for community development to strengthen the economic position of the Indonesian nation.


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