From Competition to Co-opetition: Building Synergy Between Village-Owned Enterprises (BUMDes) and Koperasi Desa Merah Putih (KDMP) for Holistic Rural Welfare in Indonesia

ABSTRACT: The simultaneous presence of Badan Usaha Milik Desa (BUMDes — Village-Owned Enterprises) and Koperasi Desa Merah Putih (KDMP — Merah Putih Village Cooperatives) in the same rural territories across Indonesia has sparked significant academic and policy debate about the risk of institutional overlap, resource competition, and functional duplication. This article employs a qualitative literature review to analyze the thematic landscape of this institutional coexistence, drawing on academic journal articles, policy documents, grey literature, and media reporting published between 2020 and 2026. The review identifies five major problem themes — institutional overlap, resource competition, regulatory ambiguity, elite capture risks, and legitimacy erosion — alongside five synergy themes, including functional differentiation, supply-chain integration, collaborative governance, digital ecosystem development, and triple-helix capacity building. Grounded in co-opetition theory and institutional theory, this article argues that BUMDes and KDMP are structurally complementary rather than inherently competitive: BUMDes excel in asset-based production and infrastructure management, while KDMP is optimally positioned for distribution, financial inclusion, and consumer-facing services. The article recommends an inter-ministerial regulatory framework for mandatory functional differentiation, village-level joint deliberation mechanisms (Musdesus), a shared digital village economy ecosystem, and joint capacity-building programs. Synergistic models from Lombok Timur and Riau Province demonstrate that when roles are clearly delineated and governed collaboratively, both institutions can jointly elevate rural household welfare in a holistic and sustainable manner.