Economic rationale, challenges for and future development of cooperatives in Indonesia

摘要

Cooperatives are one of the economic institutions which face many challenges in the changing national and world economy. These challenges include the more competitive market, the globalisation of the market, deregulation and privatisation, and the autonomy of some regions within the country. Most developing countries also tend to reduce inefficiency in the public sector and cut public spending because of limited funding. Hence, cooperatives as an economic and social institution struggle to survive. In Indonesia, cooperatives also face challenges from economic changes, especially after the economic crisis, which hit the country in the middle of 1997. The huge government debt, the collapse of the banking sector and the bankruptcy of many companies because of economic crisis, may influence the economic and business environment for cooperatives. External and internal factors of cooperatives influence their capability to cope with unexpected events. This paper attempts to analyse the economic rationale, challenges and future development of cooperatives in Indonesia, using the coconut industry in North Sulawesi as a case study.