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January 8, 2025 | 11:30 am
TEMPO.CO, Jakarta - President Prabowo Subianto has allocated Rp10 trillion from the State Budget (APBN) to be channeled through the Revolving Fund Management Institution (LPDB) Fund Management Institution (LPDB). Deputy Minister of Cooperatives, Ferry Juliantono, said the funds stem from the State Budget (APBN) to bolster the role of cooperatives in driving the national economy.
He emphasized that these funds are intended to be repaid and are expected to contribute to Gross Domestic Product (GDP) growth. He acknowledged that the current contribution of cooperative business activities to GDP remains relatively low.
He expressed confidence that strategic interventions, including factory construction and industrial expansion, could enable cooperatives to contribute a 3-5% increase to GDP. “Cooperatives have the right to engage in these ventures, not solely private entities or state-owned enterprises,” Ferry asserted.
One strategy for strengthening cooperatives involves facilitating mergers between entities, a process to be supported by the LPDB funds. Indonesia currently has 131,000 cooperatives, some of which exhibit suboptimal performance.
“We must admit that some cooperatives are less active and so, it would be better to merge, combine them,” he said at the Ministry of Cooperatives on Tuesday, December 7, 2025.
According to him, this approach, inspired by successful models observed in other countries, aims to address the challenges faced by many older cooperatives with limited capital and dwindling activity.
Furthermore, Ferry outlined plans for cooperatives to actively engage in the industrial sector. He highlighted instances where suboptimal management practices within cooperatives hindered their ability to leverage corporate-style ownership and operational strategies.
However, he emphasized that cooperatives possess the capacity to adopt these approaches, contingent upon necessary regulatory adjustments to Ministerial Regulation Number 4 of 2020. “So this will grant LPDB the flexibility to support industrial sector ventures,” Ferry explained.
He targeted the revision of this ministerial regulation to be completed next week so that he could realize strategic steps to increase cooperative asset ownership immediately. Ferry expressed optimism regarding the establishment of cooperative-owned processing facilities with the Rp10 trillion budget. “We want cooperatives to also have milk processing factories, palm oil processing factories, or even cooking oil factories,” he concluded.
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