Jakarta. All subsidized goods in Indonesia will be distributed exclusively through the Red-and-White Village Cooperatives (KDMP), with Finance Minister Purbaya Yudhi Sadewa saying the policy gives the cooperatives a guaranteed market and a sustainable business model.

"The Cabinet decided yesterday that all subsidized goods will be distributed through the KDMP and will no longer be sold outside that system," Purbaya said at a press conference in Yogyakarta on Thursday.

Purbaya said the policy alone should be enough to ensure the cooperatives generate profits, provided they are managed transparently. "That alone should guarantee profits for the KDMP. As long as there is no corruption, they should be fine," he said.

The government has also prepared up to Rp 240 trillion ($13.36 billion) in financing for the cooperatives over the next six years through loans from state-owned banks, collectively known as Himbara.

"We will cover both principal and interest over the next six years, roughly Rp 40 trillion a year, depending on how many cooperatives are operating."

The government will also finance employee training and salaries during the cooperatives' initial operating period, which is expected to last between 18 months and two years before they become self-sustaining.

"Funding is no longer an issue. The priority now is to ensure implementation is cleaner, better organized, and minimizes leakages," Purbaya said.

He said the government's focus has shifted from financing to ensuring strong governance and preventing misuse of funds as the cooperatives begin operations.

The government has said it will only cover financing obligations for cooperatives that pass audits by the Financial and Development Supervisory Agency (BPKP). Cooperatives that fail the audit will not receive government payments.

President Prabowo Subianto has mandated that all subsidized goods be distributed through the KDMP so that subsidies are delivered directly to eligible beneficiaries.

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