I Gede Made Aditya Pradnyana

1406305101

Cooperate and SMEs

1. The history of cooperative development in Indonesia , from the

Dutch colonialism until nowadays.
a. Cooperatives during Dutch colonialism
Cooperatives in Indonesia has been pioneered by R. Aria
Wiratmadja. He was one of the leader in Purwokerto on 1896. The
capital of that cooperative was mostly from himself. That
cooperatives name was Helper and Savings Bank or Hulp en
Spaarbank . The purposed was to help the employees to not to
entangled by moneylender.
Through Boedi Utomo on 1908, Raden Sutomo develop
cooperative for household purposed. Furthermore, around 1913,
the United Trade Islam States pioneered the establishment of some
kind of small industry and handicraft cooperatives.
b. Cooperatives during Japan colonialism
In Japan colonialism, cooperative efforts in Indonesia adapted
the principles of the military. Cooperative in Indonesia was limited
only to the interests of East Asia war waged by Japan. The
cooperatives model during Japan colonialism was called Kumiai that
charged to distribute societys need. Japanese government
convince the public that the welfare of the Kumiai was established
for them and made Indonesian people sympathy with that. Though
Kumiai was established to meet the interests of the war. So Kumiai
established to collect items of basic needs for the benefit of Japan
for war purpose.
c. Cooperatives in the Period to Maintain the Independence
(1945-1949)
After Indonesia declared its independence, firmly written
cooperatives in the Act of 1945. One thing that is very clear in this
period is the prominence of the leaders of Indonesia's determination
 that a liberal capitalist into the economic order in accordance with
the spirit of article 33 of the Constitution of 1945.
As known, in article 33 UUD 1945, cooperative spirit was
placed as the basic spirit of the Indonesian economy. Through the
article, the nation of Indonesia intends to draw up a joint venture
economic system based on family principles. DR. H. Moh. Hatta tried
to include the formulation of the cooperatives in the "constitution".
Article 33 UUD 1945 paragraph 1 and an explanation stating that
the economy is structured as a joint venture based on the principle
of kinship. In the explanation mentioned that getting the economy
in accordance with the the principle of kinship was cooperative.
On July 12, 1947 congress held throughout the first Java in
Tasikmalaya. The congress decided among others the establishment
of Central Organization of Indonesian People's Cooperative which is
abbreviated SOKRI; made on July 12 as the Day of Cooperatives and
to encourage cooperative education organized among management,
employees, and communities. The cooperative development is
hampered in the physical revolution selected for their aggression
Holland I and II as well as PKI d Madiun uprising in 1948.
d. Cooperatives In The Period 1950-1965
On 15-17 July 1953 was held congress of Indonesian
cooperatives no II in Bandung. The decision to include cooperative
organization of central revamp the people of Indonesia (SOKRI) into
Indonesian Cooperatives Council (DKI). Besides, obliging the city
established the Institution for Education and established the
Cooperative Middle School in the provinces. Another decision is the
submission of suggestions to the government for immediate
issuance of the Cooperative Act and appoints new Bung Hatta as the
father of Indonesian Cooperatives.
On 1-5 September 1956 congress organized cooperatives no
III in Jakarta. Decision congress in addition to the matters pertaining
to the life cooperatives in Indonesia, also regarding the relationship
with the Indonesian Cooperatives Council International Cooperative
Alliance (ICA).
 On July 15, 1959 the President as the Supreme Commander of
the armed forces pronounce decrees the president claiming the
decision reenact Act of 1945 for the entire Indonesian nation and
the entire Land of Blood Spilled Indonesia. A year later, in 1960, the
government issued a government regulation No. 140 on the supply
of basic goods and the assignment of co-operatives to implement
them. By this rule then began to grown cooperatives consumption.
The growth of cooperatives by the government en masse and
uniformly regardless of the terms of healthy growth, has resulted in
the growth of cooperatives that are less healthy.
In 1961 the convening of a national conference of cooperative
I (Munaskop 1) in Surabaya to implement the principle of Guided
Democracy and Guided Economy. Steps politicize (verpolitisering)
cooperative began to appear. Indonesia Cooperative Council
replaced with Organization Unity Cooperative Indonesia (KOKSI) is
not merely a cooperative organization itself but cooperative
organizations, led by the government.
Along with Required Law No. 14 1965 National Conference
held Koprasi (Munaskop) II in Jakarta to legitimize the inclusion of
political forces in the cooperative as stipulated by the Law of
Cooperative. In the Munaskop also decided that KOKSI (Unity of the
Organization Koperasi Indonesia) resign from membership of the
ICA.
e. Cooperatives in The Reign of The New Order and Reform
The Development of Cooperatives in The Reign of The
New Order
In the New Order era, the cooperative has been legislated.
Government on December 18, 1967 preparing new Cooperative
Act, known as Act No. 12/1967 on the Principles of Cooperatives.
Economic development in the New Order government is
well planned with long-term development plan of Phase I (25
years old) and dividing the long-term plan through a five-year
development plan (Pelita).
 The Development of Cooperatives in The Reign of The
Reform
After the fall of the New Order regime and replaced by the
reform, the cooperative development has increased. In the reform
era economic empowerment back pursued through the provision of
greater opportunities for small businesses and cooperatives.
For such purposes as have been defined by the guidelines of
1999. The message implicit in the Guidelines of 1999 that the task
and mission of the cooperative in this reform era, the cooperative
must be able to function as a means of supporting small business
development, development tools and community participation in
development, as well as a means for solving disharmony in society
as a result of unequal distribution of revenue that may occur.
To determine the role that can be expected from the
cooperative in order to cure the national economy would note that
on the one hand the cooperative has been recognized as an
institution of the solution in order to ward off the gap and realize
equality, but on the other hand the wisdom of the macro economy
has not yet fully adapted to changes in the world economy lead to
the free market.
In the reform era, Cooperative development policy is the
responsibility of the Ministry of Cooperatives and Small and Medium
Enterprises. Referring to the President of the Republic of Indonesia
Regulation No. 09 / M / 2005 dated January 31, 2005 that the
position of the Ministry of Cooperatives and SMEs are implementing
elements of the government with the task of helping the President
to coordinate policy formulation and coordination of policies
empowering cooperatives and SMEs in Indonesia.
The task of the Ministry of Cooperatives and SMEs is to
formulate policies and coordinate the planning, implementation,
monitoring and controlling the empowerment of cooperatives and
SMEs in Indonesia.

2. Steps for Establishing a cooperative in Indonesia

A. The Initial Stage of the Establishment of Cooperatives
 1) There are groups of people who have the same interests
2) Having a common goal of obtaining ease in business and
improving the general welfare
3) There are prospective members at least 20 people who are
in the working area which is not too far from one member
to the other members
4) The existence of a character who is able to become a
pioneer the establishment of cooperatives
B. The Preparation of Establishment of Cooperatives Phase
1) There are pioneers/ leaders and founders of the
cooperative and the strong desire of the prospective
members are realized in the form of a cooperative founder
committee formation
2) Preparing the basic concepts of the articles of association
of cooperatives (anggaran dasar) , an example of the
concept of the articles of association can be requested
from the department of cooperatives in the local area.
3) Once the materials are prepared, the establishment of
cooperatives invite prospective members of at least 20
people, local government officials and the head office of
local cooperatives. In the invitation has been determined
place, meeting time, and the arrangement of meetings.
C. Implementation of the Establishment of Cooperative
Meeting
In the implementation of the founding meeting of the
cooperative, should at least discuss the following agenda:
1) The background of the establishment of cooperatives
2) Intent and purpose of the establishment of cooperatives
3) Request approval of the establishment of cooperatives to
the meeting participants
4) Formulation and explanation of the Anggaran Dasar and
Anggaran Rumah Tangga. In Anggaran Dasar at least
making things, like a list of names of the founder, the name
and domicile, the intent and purpose of business, the terms
about membership, meetings of members, management,
capital, the founding period, distribution of net income, and
the sanctions.
 5) Determination of the people who signed the deed of
establishment of cooperatives
6) Selection and appointment of administrators and
supervisors of cooperatives
D. Reporting and Filling of Legal Entities Cooperatives Phase
After the meeting of the establishment of cooperatives finished,
management elected have obligation to follow the decision of the
meeting by performing the following steps:
1) Creating the register of members and register of board
2) Make a written report of the meeting of the establishment
of cooperatives to the local government
3) Create and apply for recognition of the legal entity of a
cooperative to a local cooperative department office,
usually located in the capital of the district / municipality.
The application letter must be as follows:
The deed of establishment of cooperatives (in 2
copies).
Notes of meeting cooperative formation which
contains the number of meeting participants, number
of members and the name which are given the power
to sign the deed of cooperative legal entities.
The beginning balance of the cooperative.

3. Internal and External Structure of Cooperative Organization

Internal Structure:
a. Member meeting
Member meeting is the highest forum in cooperative that
attended by all members as an owner. The form of member
meeting can be RAT, RAK, and RALB. Member meeting is
considered legitimate if attended by more than a half of the
number of members and agreed upon by more than half of the
members are present.
b. Executive Board
Executive board is the power holder in member meeting to
manage the cooperative. The requirement of executive
candidate is listed in AD/ART.
c. Managerial
 Managers are selected and appointed by the executive board
to perform the business operational function of the
cooperative.
d. Supervisor
In principle, the supervisor task is not to find faults but keep
the activities conducted by cooperative in accordance with
member meeting. If supervisor find irregularities then it must
be consulted to the executive board to take further action, the
results of the surveillance reported in member meeting.
e. Member
Member is the owner of cooperative and have contributions to
give capital and opinion for the continuation of cooperative.
Member also have rights for every decisions in member
meeting.

External Structure:
a. Government
Government as a leader give some influences for cooperative
operational. Cooperative must comply with the rules, taxes,
and other requirement to make the cooperative can continue
the business.
b. Citizen
The citizen means the people who has contributed to the
operations of the cooperative. This could be people who
saving their money in the cooperative, borrow money, people
around the cooperative environment, etc.

4. Cooperative impact on economic development in Indonesia

In my opinion, Cooperative was formed with the aim to
generate and foster creativity and initiative of the population
contained in these communities. Way as to include the entire
population in the community to voluntarily willing to participate in
the achievement of development goals and each moved to donate
labor or materials available in the environment.
 The existence of cooperatives not only helps the difficulties
the population in terms of the economy. But an increasing number
of cooperative members and the improvement of cooperative units
will have an impact on the rural environment itself. The number of
units and members of the cooperative's growing show the positive
side of development. This shows that certainly has occurred
employment, poverty reduction and improving the welfare of
members of the cooperative or the people of Indonesia "

5. Performance to make a great cooperative:

a. Recruiting competent members
Not only the people who just want to be a member, but people who
have skills in the management and development of cooperatives.
For example, by looking for a leader who can lead well, then
management is held by people who are competent in their
respective fields and also held some training for cooperative
management who are inexperienced.
b. Fixing the internal conditions in cooperatives
Operational practices which are inefficient and also contains a
weakness in its performance needs to be fixed quickly. With the
dominance of the excessive maintenance and not in accordance
with aspects need to be restricted by way of regulations that closes
the gap deviation cooperative.

c. Applying GCG System

Cooperatives need to follow the example of the implementation of

good corporate governance (GCG), which has been applied to
companies that incorporated the company. GCG implementation in
some ways can be implemented on a cooperative. Therefore, the
regulator, in this case the Ministry of Cooperatives and SMEs need
to be introduced to the fullest a good concept of cooperative
governance (also referred to GCG) or a good cooperative
governance so that the cooperative can become more advanced in
its field. Development of cooperatives in Indonesia are increasingly
 showing encouraging progress. As one of the supporting pillars of
the economy of Indonesia, where the cooperative is very strong and
a special place among users of its services.

d. Improving the cooperative selling and doing promotion

To improve the marketability of the cooperative, Creating a

cooperative to look attractive so that people interested in buying at
the cooperative perhaps by way of painting the walls a cooperative
with beautiful colors, providing air conditioning, the room neatly
arranged and provided good services so that people are satisfied.
And not only that, the cooperative also needs a promotional tool to
expose its business activities to be known by the general public like
other business entities one way to distribute flyers and making
banners so that people know about it. In this way is expected to
attract investors to invest in the cooperative.

e. Change the policy of institutionalizing cooperative

In social and economic life of institutionalization policy cooperative

society do with the pattern of care, the cooperative entrust the
other two economic powers. Therefore, it is better changing the
policy so that cooperatives can grow normally like an economic
organization that is creative, and independent.

f. Fixing the cooperative thoroughly

Ministry of Cooperatives and SMEs need to prepare a blueprint for

cooperative management effectively. Blue print of cooperatives is
expected will be the guide for the entire Indonesian cooperative in
carrying out its operations in a professional, effective and efficient.
Additionally needs serious efforts to disseminate and socialize GCG
cooperative in the format of a national movement of cooperatives
continuously to the communities, whether through education, mass
 media, and other media that is expected to further advance the
Indonesian cooperative.

g. The use of identity criteria

The use of the principle of identity to identify cooperative is

something rather new, so many cooperatives that have not known
him and still stick to approaches essentialist or legal advance, which
makes it difficult or even impossible to distinguish a cooperative of
units other businesses such as partnerships, and the shares
company. Using the criteria of identity, cooperative will be able to
integrate new ideas and cutting-edge developments in the theory of
the firm into a cooperative science.

h. Raise the economic power and political power

Macroeconomic policy tends to keep providing more opportunity for
large-scale enterprises. The paradigm that is still in use today
focuses on economic growth supported by large-scale enterprises
with the assumption that the business will create a trickle down
effect. However generated is not the people's welfare but greed
spawned many gaps. In construction, growth is necessary, but the
achievement of this growth should be through a fair equalization.

6. Threats and opportunities of a cooperative

There are various threats, challenges and difficulties that Cooperatives
face, namely:
a. Increasingly tight competition.
b. The increasing role of informational technology
c. The increasing need for human resources that are able to anticipate
and plan for future events.
d. Developing the cooperative to be a strong and independent entity
and has competitive edges.
e. To fulfill the vision in which cooperatives becomes a driving force for
the peoples economy and is in stilled deeply in the people.
f. The level of ability and professionalism of the human resources in
cooperatives are still not decent enough.
 g. The weak capital structure of the cooperative.
h. Limited spread and availability of technology at a national scale for
cooperatives.
i. The members lack of awareness of their rights and obligations. The
coordination mechanisms between managers and employs are also
not functioning optimally.
j. The lack of trust to work together with other business practitioners
and among different cooperatives.
k. The infrastructures and equipment in various cities are still lacking,
such as in the finance, production and marketing department.
l. Ineffective coordination and syncronization in the trainings of
cooperative employs.
m. Lack of awareness and understandings of the people about
cooperatives. There is also a lack of concern and trust by the people
for the cooperatives.

Opportunities of Cooperatives:
1. Government prioritizes the aspects of equalization, redistributing
and therefore decreasing the income disparity.
2. UU no.25 year1992 allows the consolidation of primary cooperatives
to secondary cooperatives.
3. Strong political enthusiasm by the government and the increasing
demand by the people to further develop the cooperatives which
embodies the Indonesian vision of a democratic economy complying
to Indonesias Ideology and the foundation of the nation, Pancasila
along with UUD1945, Indonesias supreme law.
4. Decently high economic growth.
5. An increasingly open economy worldwide which makes it possible
for the products of Indonesian cooperatives to enter the
international market.
6. Industrialization open the opportunity for agro business,
agroindustry, and other village-utilization industries.
7. UU no.12 year 1992 about cultivation of plants encourages
diversification of products provided by each cooperatives.

7. How cooperative can overcome high competition in business world:

Cooperative must have a strategy to overcome high competition in
business world.
a. The strategy of rapid growth
Increasing the number of employees and business units while
maintaining product mix and market reach.
b. Changes in product mix
The revamped product mix always have an impact on the operation
of cooperatives in Indonesia is also strategy marketing and sales
strategy.
c. Change market reach
The market focus on the product mix changed so that the same
international market touched or expanded geographic reach and
find new target consumers.
d. Repositioning
Repositioning aims to change the perception of consumers or
potential consumers, cooperatives.
e. Diversification
Diversification in fact includes the addition of the product and
market expansion related to its core business and not a core
business.