Village-owned enterprise

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BUMDes-run convenience store in Kebumen Regency Bumdes 24 Kebumen Kedung Bener.jpg
BUMDes-run convenience store in Kebumen Regency

A village-owned enterprise (Indonesian : Badan Usaha Milik Desa), often shortened to BUMDes or BUM Desa, is a type of company that is managed and established by an Indonesian village. These companies span a wide array of industries, from agriculture and mining to tourism and retail. BUMDes are a relatively recent development in Indonesia, first appearing in the aftermath of fall of Suharto and the rapid decentralization that followed. As of 2022, according to data from the Ministry of Villages, Development of Disadvantaged Regions, and Transmigration, there are total of 74,691 registered BUMDes. However, due to bureaucratic difficulties, only around 10 percent (7,902) are certified as legal entities as of 2022.

Contents

History and definition

The first legal basis for villages being allowed to manage their own enterprises was Law Number 22 of 1999 on Regional Government, with chapter 108 stating that "villages may own enterprises in accordance with the law". [1] This was later revised; in Law Number 32 of 2004, chapter 213, section 1, reads: "A village can establish an enterprise owned by the village in accordance of its needs and potential". [2] The existence of village-owned enterprises was made clear with Government Law Number 72 of 2005, chapter 78, section 1, which specifically mentions Badan Usaha Milik Desa or BUMDes; Law Number 6 of 2014 on villages; Ministry of Home Affairs Regulation Number 39 of 2010 on the definition of a BUMDes; and Government Law Number 39 of 2021 on BUMDes. [3] [4]

In Law Number 6 of 2014, BUMDes are mentioned several times in detail. The law specifically defines a BUMDes as an "enterprise whose capital is wholly or partly owned by the village government, derived from the wealth of the village, which is separated through asset management, services, and other business for the welfare of the village's inhabitants". [2] [1] Details about structures, establishment, and management of BUMDes are explained in chapters 87 through 90. [2] In chapter 88, it is stated that BUMDes are established through village consultation and village regulation (Peraturan Desa). [5] The establishment of BUMDes is a way for village governments to innovate in rural development. [6]

Sectors

BUMDes-run fish pellet factory in West Kotawaringin Regency. BUMDes are present in many sectors. BUMDes-run factory.jpg
BUMDes-run fish pellet factory in West Kotawaringin Regency. BUMDes are present in many sectors.

Village-owned enterprises have been established in a wide variety of sectors, ranging from mining and plantation to retail, tourism, and telecommunication. [7] [8] [9] [10] However, Ministry of Villages, Development of Disadvantaged Regions, and Transmigration specifically stated that BUMDes are designed to focus on three key sectors on rural Indonesia, namely fishery, agriculture, and tourism. [11]

Effects

According to data from 2021, there are 45,223 active BUMDes, which in total employed more than 20 million people and contributed to around 4.6 trillion Rupiah to the Indonesian economy that year. [12] The same year, around 35 percent of the existing BUMDes were severely affected by the COVID-19 pandemic, which resulted in mass layoffs of more than 100,000 people. [12]

Challenges

Critics have argued that BUMDes are ineffective as business entities. Challenges for BUMDes include bureaucratic difficulties in obtaining legal entity status for newly established BUMDes, lack of enthusiasm by village governments to develop BUMDes business, and relatively limited sectors that can be capitalized in rural regions. [13] BUMDes are often unprofitable, [14] lacking necessary capital or resources to develop their business. [13] [15] They often have unstable internal structures because they are managed by villagers and village officials who tend to lack education in accounting and finance. [16] [17] These problems result in poor or weak implementation of BUMDes in some regions. [18] [19] Legal certainty is also a problem for many BUMDes, as it hampers their ability to look for investors or to open bank accounts. [20] [21] Despite efforts to ease the bureaucratic challenge faced by villages to establish their BUMDes as a legal entity, only 7,902 BUMDes, or around 10 percent, have been successfully registered as a legal entity as of 2022. [22]

See also

Related Research Articles

In Indonesia, village or subdistrict is the fourth-level subdivision and the smallest administrative division of Indonesia below a district, regency/city, and province. Similar administrative divisions outside of Indonesia include barangays in the Philippines, Muban in Thailand, civil townships and incorporated municipalities in the United States and Canada, communes in France and Vietnam, dehestan in Iran, hromada in Ukraine, Gemeinden in Germany, comuni in Italy, or municipios in Spain. The UK equivalent are civil parishes in England and communities in Wales. There are a number of names and types for villages in Indonesia, with desa being the most frequently used for regencies, and kelurahan for cities or for those communities within regencies which have town characteristics. According to the 2019 report by the Ministry of Home Affairs, there are 8,488 urban villages and 74,953 rural villages in Indonesia. North Aceh Regency contained the highest number of rural villages (852) amongst all of the regencies of Indonesia, followed by Pidie Regency with 730 rural villages and Bireuen Regency with 609 rural villages. Prabumulih, with only 12 rural villages, contained the fewest. Counted together, the sixteen regencies of Indonesia containing the most rural villages—namely, North Aceh (852), Pidie (730), Bireuen (609), Aceh Besar (604), Tolikara (541), East Aceh (513), Yahukimo (510), Purworejo (469), Lamongan (462), South Nias (459), Kebumen (449), Garut (421), Bojonegoro (419), Bogor (416), Cirebon (412), and Pati (401)—contain one-third of all the rural villages in Indonesia. Five of these are located in Aceh, two in Highland Papua, three in Central Java, two in East Java, three in West Java, and one in North Sumatra. An average number of rural villages in the regencies and 15 cities of Indonesia is 172 villages. A village is the lowest administrative division in Indonesia, and it is the lowest of the four levels. A village is usually divided into a number of hamlets, and there are 252,315 hamlets in Indonesia.

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References

  1. 1 2 "IAI Jatim". www.iaijawatimur.or.id. Ikatan Akuntan Indonesia . Retrieved 2022-10-05.
  2. 1 2 3 "Landasan Hukum Pendirian Badan Usaha Milik Desa". dispmd.bulelengkab.go.id. Kabupatén Buléléng . Retrieved 2022-10-05.
  3. ↑ Wardani, Surti; Yughi, Sheila Ardilla; Widodo, Arif Siaha (2022-08-30). "Peran BUMDes Dalam Peningkatan Ekonomi Masyarakat Melalui Bimtek Manajemen Bisnis Di Desa Ciampea Udik Kecamatan Ciampea Kabupaten Bogor Jawa Barat". Jurnal Abdimas Tri Dharma Manajemen. 3 (3): 67–74. doi:10.32493/ABMAS.v3i3.p67-74.y2022 (inactive 31 January 2024). ISSN   2716-070X.{{cite journal}}: CS1 maint: DOI inactive as of January 2024 (link)
  4. ↑ Putry, Muthia Anggela Mawadhaty; Danil, Elwi; Oktarina, Neneng. "Analisis Terhadap Akta Penirian Badan Usaha Milik Desa: Studi Akta Pendirian Badan Usaha Milik Desa Taratak Bancah Sejahtera" (PDF). Retrieved November 26, 2022.
  5. ↑ "Undang-Undang Republik Indonesia" (PDF) (in Indonesian). Retrieved November 26, 2022.
  6. ↑ Agunggunanto, Edy Yusuf; Arianti, Fitrie; Kushartono, Edi Wibowo; Darwanto (March 1, 2016). "Pengembangan Desa Mandiri melalui Pengelolaan Badan Usaha Milik Desa (Bumdes)". Jurnal Dinamika Ekonomi Dan Bisnis. 13 (1): 67–81. doi:10.34001/jdeb.v13i1.395 (inactive 31 January 2024).{{cite journal}}: CS1 maint: DOI inactive as of January 2024 (link)
  7. ↑ Kopi 7 (2019-09-26). "BUMDes Mart Sangatta Utara Beroperasi – Retail Konsep Modern Jadi Penyangga Perekonomian". Protokol & Komunikasi Pimpinan Sekretariat Daerah (in Indonesian). Retrieved 2022-11-26.{{cite web}}: CS1 maint: numeric names: authors list (link)
  8. ↑ Hidayat, Ali Akhmad Noor (2018-08-26). "Lamongan Targetkan 462 Badan Usaha Milik Desa Dirikan Toko Ritel". Tempo. Retrieved 2022-11-26.
  9. ↑ Sedesa, Ari (2021-04-18). "Contoh Unit Usaha BUMDes di Bidang Pelayanan Publik". sedesa.id (in Indonesian). Retrieved 2022-11-26.
  10. ↑ "BUMDES Kabupaten Sleman Ini Gandeng ISP Bangun Infrastruktur Internet Desa". merdeka.com. 2020-09-07. Retrieved 2022-11-26.
  11. ↑ "Kementerian Desa, Pembangunan Daerah Tertinggal, dan Transmigrasi". www.kemendesa.go.id. Retrieved 2022-11-26.
  12. 1 2 Mediatama, Grahanusa (2021-09-15). "Sebanyak 35% BUMDes di Indonesia terdampak pandemi Covid-19". kontan.co.id (in Indonesian). Retrieved 2022-11-26.
  13. 1 2 Aeni, Nurul (2020-12-17). "Gambaran Kinerja Badan Usaha Milik Desa (BUMDes) Di Kabupaten Pati". Jurnal Litbang Provinsi Jawa Tengah. 18 (2): 131–146. doi: 10.36762/jurnaljateng.v18i2.826 . ISSN   2548-463X. S2CID   235084619.
  14. ↑ "IRDA Subang Sebut Banyak BUMDES Bermasalah: Dari Mulai Tak Ada Kegiatan, Usaha Rugi Mlulu Hingga Masalah Penggunaan Dana" (in Indonesian). 16 May 2021.
  15. ↑ Fitria, Fitria (2020-04-15). "Pember Ekonomi Masyarakat Malalui Badan Usaha Milik Desa (BUMDes)". ADL Islamic Economic: Jurnal Kajian Ekonomi Islam. 1 (1): 13–28. doi: 10.56644/adl.v1i1.4 . ISSN   2722-2810. S2CID   229140334.
  16. ↑ Posi, Sahrul HI; Putra, Sang Putu Angga Mahendra (2021-09-02). "Pengaruh Tingkat Pendidikan, Pemahaman Akuntansi Dan Pelatihan Penyusunan Laporan Keuangan Terhadap Pelaporan Keuangan Bumdes Berdasarkan SAK ETAP". JIMAT (Jurnal Ilmiah Mahasiswa Akuntansi) Undiksha. 12 (2): 463–469. doi:10.23887/jimat.v12i2.29591 (inactive 31 January 2024).{{cite journal}}: CS1 maint: DOI inactive as of January 2024 (link)
  17. ↑ Gumiwang, Ringkang. "Kenapa Ribuan BUMDes Mangkrak Meski Dana Desa Triliunan Rupiah?". tirto.id (in Indonesian). Retrieved 2022-11-27.
  18. ↑ Sulut, SKH Media. "Deprov Kritisi Lemahnya Pengelolaan BUMDes di Sulut". www.mediasulut.co (in Indonesian). Retrieved 2022-11-26.
  19. ↑ "Legislator Kotim Kritik Keras BUMDes, Desak Dilakukan Evaluasi". radarsampit.com (in Indonesian). Retrieved 2022-11-26.
  20. ↑ Purwanto, M. Yusuf (2021-12-22). "BUMDes Minim Badan Hukum, Kesulitan Akses Perbankan". Radar Bojonegoro (in Indonesian). Retrieved 2022-11-26.
  21. ↑ Ma'arif, Nurcholis. "Mendes Jelaskan Cara BUMDes Bisa Berbadan Hukum". detiknews (in Indonesian). Retrieved 2022-11-26.
  22. ↑ "Percepatan Sertifikasi Badan Hukum BUM Desa, Solusi Konkrit Kebangkitan Ekonomi di Desa". www.kemenkopmk.go.id. Retrieved 2022-11-26.
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