This study aims to analyze the role of the Merah Putih Village/Sub-district Cooperative as a driver of sustainable economic development based on local wisdom and to identify challenges and development strategies in supporting village economic development. This study uses a qualitative approach with a literature study method (library research) through the review of various scientific journals, regulations, and relevant literature. Data analysis techniques are carried out using the content analysis method by identifying, reviewing, and interpreting various information according to the research focus. The results show that KDMP has a strategic role in increasing community access to financing, strengthening the distribution of agricultural products and MSMEs, creating local jobs, increasing the added value of village products, and strengthening food security and financial inclusion of village communities. Furthermore, the integration of local wisdom values such as mutual cooperation, deliberation, social solidarity, and community participation is a crucial foundation for strengthening the sustainability of village cooperatives. However, the implementation of the KDMP still faces various challenges, such as low human resource capacity, weak digital literacy, potential overlap with Village-Owned Enterprises (BUMDes), and the risk of institutional politicization. Therefore, strengthening participatory governance, digitalizing cooperatives, developing human resources, and fostering multi-stakeholder synergy are necessary to realize professional, inclusive, and sustainable village cooperatives.
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