JAKARTA, BERITAPOLITIK.ONLINE — Indonesian people every May 5 commemorate the Day of the Village Social Institution as a tribute to the progress and dedication of village social institutions in strengthening the social resilience of the community.
The determination of this date also coincides with the important momentum of revitalizing the role of village social institutions in the early 1980s, in response to the needs of community-based welfare improvement.
Commemoration of Village Social Institutions is intended as an effort to re -arouse public awareness of the importance of the role of village social institutions in supporting the welfare and social resilience of the village.
LSD is an entity that grows from, by, and for the village community. This institution has a crucial role in maintaining social solidarity and encouraging local economic independence.
Village Social Institutions have various forms, namely the Village Unit Cooperative (KUD), Family Welfare Development (PKK), Village Community Resilience Institute (LKMD), and Youth Organization. Each of these forms carries out a different role in strengthening the social and economic structure of the village.
The existence of LSD has become increasingly relevant in facing increasingly complex development challenges, especially in the current era of globalization and digitalization. Not only play a role in social aspects, such as poverty reduction and strengthening cooperation, but LSD also has great potential as the main driver of the local economy based on the community.
Economic development
Normatively, the existence of village social institutions has been regulated in various regulations. Law Number 6 of 2014 concerning Villages mandates the formation of village social institutions as village government partners in planning, implementing, and supervising development.
In addition, the Minister of Home Affairs Regulation No. 18 of 2018 concerning Village Social Institutions and Village Customary Institutions reinforces the position of LSD as a driving force for citizen participation in development.
The existence of this institution aims to improve the welfare of the village community through strengthening economic capacity, fostering the spirit of mutual cooperation and social solidarity, increasing community participation in village development, and bridging communication between the village government and the community.
LSD not only focuses on social issues, but also acts as a driver of the village economy. Various research shows the involvement of LSD in the development of village micro, small, and medium enterprises (MSMEs) through assistance and training, participatory BUMDes management, provides access to micro financing through local cooperatives, and encourages community-based food security programs.
In line with the purpose and role of the existence of LSD in Indonesia, LIPI/Brin’s research in 2020 concluded that villages that have active LSDs have increased an average of 12 to 15 percent of people’s income in the last five years.
In addition, the results of the UGM study in 2022 also showed that the involvement of the LSD in the preparation of the Village Government Work Plan (RKP) contributed to the increasing effectiveness of local potential-based economic empowerment programs.
Red and White Cooperative
The government is currently encouraging the initiative to establish a Red and White Cooperative as a form of village-based people’s economic consolidation.
Village Social Institutions play an important role in becoming facilitators to form cooperatives based on citizens’ needs, provide community socio-economic databases, bridge cooperative education and financial literacy, and oversee cooperative transparency and accountability.
The involvement of LSD is expected to make the establishment of the Red and White Cooperative in rural areas have a great opportunity to become a collective instrument in sustainably advancing the village economy.
Thus, the support of the Village Social Institution for the plan to establish the Red and White Cooperative is very strategic and relevant in encouraging the economic empowerment of the village community.
As a forum that is close to the needs and social dynamics of citizens, village social institutions can play an active role in mobilizing community participation, providing cooperative education, to bridging collaboration between community leaders, village governments, and related parties.
The momentum of the Commemoration of the Village Social Institution on May 5, 2025, is an important opportunity to emphasize the vital role of this institution in the development of an inclusive and sustainable village. The establishment of the Red and White Cooperative is in harmony with the spirit of the Day of the Village Social Institution, which is to strengthen the solidarity, independence, and welfare of the community through mutual cooperation and active participation of all elements of the village.
The experience of other countries in building village social institutions in each country can be a good learning for Indonesia to increase the capacity of village social institutions in building an economy in rural areas.
In the Philippines, for example, there is Community-Driven Development (CDD), an organization that encourages communities in rural areas to manage local economic projects with technical support from the government.
In Thailand, there is the Village Fund Program, which was made to integrate local institutions with revolving funds and has been proven to increase the economic productivity of the village in the country. India even made Self Help Groups (SHGS), which are managed by village women and represent the emancipation movement of women in the country, which succeeded in managing savings and loans and local entrepreneurs.
Indonesia can also adopt a good approach from these countries by integrating LSD into every village’s economic policy.
Lecturers and researchers from Gadjah Mada University, Prof. Dr. Sutoro Eko, in various scientific forums, confirmed that village social institutions are social defense fortresses born from citizen participation, not from state instructions. He is the bodyguard of the value of cooperation, and at the same time, the most authentic social capital in village development.
While the Head of the Republic of Indonesia State Administration Institute (LAN) Prof. Dr. Adi Suryanto stated that the momentum of the day of the village social institution should be a reminder that the power of the nation’s development begins with the village, and the village social institution is the most powerful local motorbike in maintaining the sustainability of development.
Village social institutions have an increasingly vital strategic role in building an inclusive and competitive rural economy. With the support of regulations, institutional capacity, as well as cross-sectoral partnerships, LSD can be a motorcycle driving the village’s socio-economic transformation towards sustainable independence.
Contributor: Dr. M Lucky Akbar, S. Sos, M.Sc is the Head of the Jambi Taxation Data Processing Office and Document
