Many Indonesian Citizens See Potential for Corruption in the Merah Putih Cooperative

Based on a survey by the Center of Economic and Law Studies (Celios), 65% of village officials believe there is potential for corruption in the management of the Merah Putih Village Cooperatives in Indonesia.

Meanwhile, only 19% believe there is no potential for corruption, and 17% of respondents don't know.

According to Celios, the potential for corruption in the Merah Putih Village Cooperatives arises because of their large budgets, but the oversight system and transparency mechanisms are considered weak.

"Lack of accountability can also create loopholes for budget irregularities and political intervention," said Celios in their report Red and White Village Cooperative: Guidelines for Implementation, Changes, and Program Alternatives.

Celios assesses that without strict oversight, this program is vulnerable to being controlled by parties with political affiliations and close ties to local elites.

"This project has the potential to become a new feeding ground for those seeking to profit from village budget schemes, repeating patterns of corruption and embezzlement like those seen in problematic national projects," they said.

Celios conducted this survey among 108 respondents working as village officials in 34 provinces across Indonesia. Data collection was carried out from May 3-20, 2025, using a quantitative approach and multistage random sampling method.

The Merah Putih Village Cooperatives are a follow-up program to Presidential Instruction Number 9 of 2025, aimed at improving the welfare and meeting the basic needs of village communities.

Cooperatives and SMEs Minister Budi Arie Setiadi stated that as of Friday (May 30, 2025), approximately 71,200 Merah Putih Village Cooperatives have been established, out of a total target of 80,000.

He claims the formation of tens of thousands of cooperatives was not haphazard.

"We will carefully prepare mockups and models for the operation of village/urban cooperatives, meticulously, in accordance with the business potential of each village and urban area," said Budi Arie in a press statement.