Building Cooperatives Based on Members in the People’s Economic Development Framework

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Published on International Journal of Economics & Business
Publication Date: June, 2019

Tri Rukmaningsih, Rahmat Sutiono & Projo Budiarto
Kartini University, Surabaya
Wijaya Putra University, Surabaya
Pelita Harapan University, Surabaya

Journal Full Text PDF: Building Cooperatives Based on Members in the People’s Economic Development Framework.

When the economic crisis hit Indonesia the cooperative activities experienced a very severe shock, because at that time the state finances experienced inflation as a result many organizations and businesses have had to go out of business because of many loss. This condition closely related to the legal aspects of cooperatives that do not develop as accurately as business entities individual. Besides that the characteristics of cooperatives appear to be less accommodated within various laws and regulations concerning business entities other than laws concerning the cooperative itself. Or even develop a network of cooperation and business linkages between cooperatives. This has actually also become a necessity among many cooperatives, because there are many business opportunities that cannot be fulfilled by cooperatives individually.

Keywords: Economic crisis, Inflation, & Cooperatives.

The cooperative was initially seen as an institution that runs a certain business activity, and business activities are needed by the community. The intended business activity can be in the form of financial or credit needs services, or activities marketing, and others. Then cooperatives have also become an alternative for other institutions and become an organization owned by its members. This sense of belonging has been considered to be the main factor that has caused cooperatives to be able to withstand various difficult conditions. But there are still more things that don’t get a good enough response in some factors. The main factor is the inability of cooperatives to carry out functions as promised and many deviations or other activities that disappoint the community. This condition has become a source of the cooperative’s overall image. The development of cooperatives in the New Order era which was biased towards the dominance of the role of the government, as well as the conditions of the economic crisis that hit Indonesia, raised the question of how real operations in Indonesian society are, how their prospects and strategies development that must be done in the future. Looking at the nature and conditions of the current economic crisis and various thoughts about efforts to get out of the crisis. Looking at the nature and conditions of the current economic crisis, there is a need for a way out of these conditions. For this reason, this paper was made with the following objectives:
1) Know how big the role of cooperatives is in Indonesian society;
2) Prospects and development strategies carried out in the future;
3) Thoughts about efforts to get out of the crisis.
Research methods, this study was conducted in Indonesia, especially in the Autonomous and Village areas. Study method, data collection techniques were obtained from literature studies, the Cooperative and SME Office and related institutions at the provincial and district levels in the form of publications, documents, activity reports. Processing data analysis, the management of data analysis is carried out in a reflective manner.

There are 3 levels of the existence of cooperatives for the community (PSP-IPB, 1999):
1) Cooperatives are seen as institutions that carry out certain business activities, and business activities are needed by the community. The intended business activity can in the form of financial or credit needs services, or marketing activities, or other activities. At this level, cooperatives usually provide business services that are not provided by other business institutions. This can be seen in the role several Credit Cooperatives in providing relatively easy funds for their members compared to the procedures that must be taken to obtain funds from the bank.
2) Cooperatives are an alternative for other business institutions. The community has felt that the benefits and role of cooperatives are better than other institutions. The involvement of members (or also not members) with cooperatives is due rational considerations that see cooperatives able to provide more services well.
3) Cooperatives become organizations owned by their members. This sense of belonging has become the main factor that causes cooperatives to survive in various difficult conditions, namely by relying on member loyalty and the willingness of members to together the cooperatives face these difficulties.

The following are distinguishing factors between cooperatives that continue to exist and develop with cooperatives that have not functioned:
1) Cooperatives will exist if there is a collective need to improve the economy independently.
2) Cooperatives will develop if there is freedom (independence) and autonomy for organize.
3) Oriented to service delivery for members,
4) Transaction costs between cooperatives and members can be reduced smaller than the cost of non-cooperative transactions, and able to develop capital in cooperative activities and members own
5) The existence of cooperatives will be largely determined by the suitability of the factors with the characteristics of the community or its members
6) Cooperatives will increasingly feel the role and benefits for members and the community in general if there is awareness and clarity in terms of cooperative membership.
7) Cooperatives will exist if they are able to develop business activities that:

Regulations on cooperative development concepts for example and uniformly and are issued based on the following considerations :
1) Adjusting the cooperative function with the spirit and spirit of the 1945 Constitution and Manipol RI dated 17 August 1959, where cooperatives were given roles in such a way that their activities and implementation could truly be a tool to carry out a guided economy based on Indonesian socialism, the joint economic life of the Indonesian people and the basis for regulate the people’s economy to achieve a decent standard of living in a democratic and just and prosperous society.
2) That the government must take an active stance in fostering the Cooperative Movement based on the principles of guided democracy, namely to grow, encourage, guide, protect and supervise the development of the Cooperative Movement.
3) That by handing over to the cooperative implementation of the Cooperative Movement own initiative in its early stages now not only tidakk achieve the goal to stem the flow of capitalism and liberalism, but also does not guarantee organizational forms and ways of working that is healthy in accordance with the principles of cooperatives truth.

The spirit of the New Order which started its starting point March 11, 1996 immediately after that on December 18, 1967 a new Cooperative Act was born, known as Law No. 12/1967 concerning the Principles of Cooperatives. Consider the Law No. 12/1967 are as follows;
1) That Law No. 14 of 1965 concerning Cooperatives contain thoughts that clearly want to:
2) Placing the functions and roles of cooperatives as direct servants rather than politics. So that it ignores cooperatives as a forum for people’s economic struggle.
3) Deviating the foundations, principles and joints of the cooperative base from its security.
4) That in connection with that, a new Law needs to be established which is in accordance with the spirit and spirit of the New Order as outlined in the Accuracy of the Fourth Session of the MPRS and the Special Session to enable cooperatives to have the right legal position and place as an organization of characterized economic struggle social and as a means of democratizing the national economy.
5) That cooperatives together with the economic sector of the State and the private sector are engaged in all economic sectors of the State and the private sector are engaged in all activities and economic life of the nation in order to enable them to realize the society of Indonesian Socialism based on Pancasila which is fair and prosperous in the favor of the Lord Almighty.
6) That related to that, then Law No. 14 of 1965 needs to be revoked and needs to reflect the soul, as well as the ideals contained in it clearly states, that the Indonesian economy is structured as a joint venture based on the principle of kinship and cooperatives is a business building that is in accordance with the intended economic structure. Based on that provision and to achieve these ideals the Government has the obligation to guide and foster Indonesian cooperatives with an attitude” Ing ngarsa sung tulada, ing mad mb angun karsa, tut wuri handayani”. In the idiomatic field, Indonesian cooperatives are the only forum to develop the people’s economy based on family and mutual cooperation . According to article. 3 Law No. 12/1967, Indonesian cooperatives are a people’s economic organization with a social character, consisting of people or cooperative legal entities which are a family principle. The explanation of the article states that” Indonesian cooperatives are a collection of people who as humans simultaneously, work to advance their economic interests and the interests of society”.

Cooperatives in Indonesia are seen as institutions that run a business activity certain, and business activities are needed by the community. Besides that the cooperative has also an alternative to other business institutions and co-operatives have become activities within a organization owned by its members. In the coming days cooperatives are still very much needed by the community. Another reason is because there are opportunities to develop certain business potential. The establishment of the cooperative was to meet the needs of its members at a relatively cheaper price, providing convenience for its members who needed business capital, providing benefits for their members. So the conclusion of this material is that the importance of cooperatives aims to improve the welfare of the Indonesian people and the welfare of the people in all countries. This was obtained by the distribution of Remaining Business Results to its members.

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