Cooperatives Development in Indonesia “Country Presentation” of

1. Cooperatives Development in Indonesia “Country Presentation” of The Ministry for Cooperatives and SMEs The Republic of Indonesia 2010 Presented by : Deputy Minister for Institutional Development Beijing, 3rd September, 2010

2. Based on the Law of Republic of Indonesia Number 25 of the Year 1992 Concerning Cooperative : A Cooperative society is a business enterprise having individuals or registered cooperative societies as members of which its activities are based on cooperative principles and simultaneously as a people’s economic movement based on the principle of brotherhood. A primary cooperative society is a cooperative society established by and having individuals as its members. A Secondary cooperative society is a cooperative society established by and having cooperative societies members. Definition Definition &Types of Cooperative • The type of a cooperative society is based on the similarity of activities and economic interests of its members such as : • Saving-loan cooperative society • Consumer cooperative society • Producer cooperative society • Marketing cooperative society • Service cooperative society Types

3. Statistic of Cooperative in Indonesia Year 2006 – 2010

4. Rationale • Providing jobs. • Reducing poverty. • Drive innovation. • Nurture entrepreneurship. • Foster supporting industries. • Develop new products. • Generate export opportunities. • Increase the overall well-being of society. • Triggering economic growth. • Ensuring equitable development. • Ensuring sustainable development.

5. The Ministry • The main task is to formulate and coordinate policy initiatives in the development of Cooperatives. • The areas of policy initiatives • Creating conducive policy environment. • Institutional building (under Deputy of Institutional Development) • Entrepreneurship development (under Deputy of HRD). • Enhancing productive capabilities (under Deputy of Production). • Access to financing (under Deputy of Finance). • Enhancing marketing access (under Deputy of Marketing and Business Networking). • Business development and restructuring (under Deputy of Business Development and Restructuring) • Research and development (under Deputy of Research and Development)

6. IMPLEMENTING AGENCIES • The Ministry of Cooperatives and Small, Medium Enterprises. • The Indonesian Cooperative Council (DEKOPIN), based on The Law no. 25 of 1992 article 57.

7. The Indonesian Cooperative Council The main duties of Indonesian Cooperative Council (DEKOPIN), based on The Law no. 25 of 1992 article 58 as follows: • To struggle for and extend the aspirations of the cooperative societies; • To enhance consciousness of the society to cooperate; • To carry out cooperative education for the members and the society; • To develop cooperation among cooperative societies and between cooperative societies and other business enterprises, at the national as well as at the international levels.

8. 1. Conducive environment • Enactment The Law no. 25 of 1992 (under reviewing). • Evaluation on the existing regulations obstructing Cooperatives development. • Creating enabling government regulations (Government and Minister decrees). • Smoothing coordination among relevant agencies including with local govt. • Inviting big private company involvement to promote Cooperatives (CSR, business partnership).

9. 2. Institutional building • Promoting genuine cooperatives (Revitalization of Institution of Cooperative). • Strengthening cooperative apex organization (Cooperative council). • Strengthening cooperative organization and management capacity. • Strengthening cooperative legal status. • Preserving cooperative values and principles. • Promoting cooperative cadres. • Member capacity building (member education, promotion and participation).

10. 3. Entrepreneurship devt. • Training for Cooperatives managers and leaders. • Promoting cooperative field mentors. • The development of incentive system to enhance entrepreneurship for Cooperative is conducted through several training, recognitions, support for business development and other incentive systems.

11. 4. Productive capabilities • Financing for Cooperatives production facilities. • Introducing appropriate production technologies (energy, machineries). • Business engagement in promising sectors ( fisheries, palm oil estate, milk industry, integrated farming etc.).

12. 5. Access to finance • Government budget for revolving fund. • Creating credit scheme for specific target groups (woman coops, youth coops) • Cooperation with commercial bank to execute special credit scheme for small scale borrowers, including Coops (KUR and linkage program). • Establishing semi-government body (LPDB) in charge in operating revolving fund. • Strengthening saving and loan cooperatives. • Promoting financial consultation for Coops.

13. 6. Marketing access • Annual exhibition at local, national and international (SMESCo Festival and local and international exhibition). • Trade mission. • Participation in International product exposition in selected foreign countries. • Establishing trading house. • Establishing virtual trading board. • Establishing semi-government body (LLP-KUKM) in charge in marketing. • Revitalizing traditional market (wet market) with Market Coops (Koppas) involvement. • Promoting business partnership. • Promoting Coops retail shop.

14. 7. Business development • Promoting BDSP (Business Development Service Provider) for Cooperatives. • Development Small Holders Credit (KUR). • Promoting venture capital companies in relation with Coops Development. • Warehouse receipt for Cooperatives’ Loan Guarantee.

15. Trading • Exhibition • Consultation • Incubation • Retail • Permanent display • Trading House SMESCO Indonesia

16. 8. Coops Research and Development • Policy research. • Program evaluation. • Strategic policy formulation (Mid Term Action Plan). • Pilot project One Village One Product (OVOP). • International Cooperation (APEC, ASEAN, BIMP-EAGA)

17. Closing Statement At the celebration of the Indonesian Cooperative’s Day in July 12, 2010, the Government of Indonesia has launched the “Cooperative Awareness Campaign”. The Government of Indonesia also commit to the development of Indonesian Cooperatives in the Medium Term Development Plan, 2010 to 2014.

18. Thank You