Gambling on Village Development
President Joko “Jokowi” Widodo has reiterated since last year that village development, especially through the use of village funds, is to be focused on issues related to the economic field and empowerment.
President Joko “Jokowi” Widodo has reiterated since last year that village development, especially through the use of village funds, is to be focused on issues related to the economic field and empowerment.
More specifically, rural economic development is to be directed at increasing investment, creating jobs and reducing poverty. Meanwhile, empowerment is to be aimed at strengthening the quality of village human resources so that villagers can support themselves.
Data shows that the level of open unemployment in villages is much lower than in cities, but the percentage of poverty in villages is almost double that of the cities. This means that the quality of jobs created in villages is still low so that they do not provide adequate incomes. The phenomenon of disguised unemployment in the agricultural sector is also still a problem.
Similarly, around 70 percent of the workforce in the villages only are graduates of junior high school or below. This situation makes empowerment a vital dimension in the villages.
Strengthening of production base
The economic anchor in the villages is production activities, especially in the agricultural sector. About 80 percent of the economic resources in the villages are agriculture in a broad sense, including fisheries, forestry, plantations and animal husbandry. The problem that has not been addressed for decades is land tenure security.
It means the production base of villagers is very limited. Therefore, work to be done in order to move the village economy includes taking care of the people\'s (agricultural) production base. Here there is a little light -- the RAPS (agrarian reform and social forestry) program has been running for five years with all its obstacles. Social forestry is carried out quite extensively, so it touches many farmers and plantation workers.
Agrarian reform still needs to be stepped up, apart from the land certification program that has been widely carried out. This is where opportunity is wide open: linking the utilization of village funds with the RAPS program. The Villages, Disadvantaged Regions and Transmigration Ministry and the Environment and Forestry Ministry (plus the Agrarian and Spatial Planning Ministry/National Land Agency) must forces.
The next thing that must be taken care of is village economic organization. An economic movement should involve not only production but also ensure added value (processing), packaging, distribution, sales, etc. can be done simultaneously. All these processes can only be consolidated through an established economic organization. The economic organization task force is divided into three: consolidating resources, creating added value and building bargaining position.
Fragmented economic actors (such as farmers, especially with a weak production base/land) are the perfect place to start. They must be consolidated in a strong organization. If this idea were applied, it would be possible for the economic movement to be passed on to the process of added value (processing) because of the fulfillment of economic scale. Furthermore, such consolidation would increase their bargaining position to a high level in facing actors/agents in the downstream. Its implication is that welfare would be improved.
The question is what economic organization should be mobilized in the villages? The answer is straightforward: a cooperative. This is the only business structure suitable for reviving the economic pulse of a village with the fulcrum of social capital, fragmented resources and poor bargaining position. In the last five years Bumdes (village-owned business entities) have been established as a stipulation of Law No. 6/2014 on Villages, the number of which has reached more than 45,000 (out of nearly 75,000 villages). This means that 60 percent of villages have Bumdes.
Options that can be taken: cooperatives work together with Bumdes to drive the village economy, or make Bumdes (or Bumdes subsidiaries) a cooperative legal entity. This issue has been the subject of a five-year debate, and now is the time for a decision to be made. At this point, collaboration between the Ministry of Cooperatives and MSMEs with the Health Ministry becomes a necessity. These two ministries are the doorstop and the backbone of the economic movement in the villages.
Rural conditions
One fact that cannot be hidden is the lack of awareness to narrate economic scale as a critical matter in the (village) economy. The village funds make the villages inward looking and lead to a failure to avail of opportunities for collaboration with neighboring villages to raise the scale of the economy. The mandate of the Village Law is actually not only village development but also development in rural areas.
The meaning of rural areas is that more than one village makes collaborative initiatives to manage and process natural resources (economy) so that the degree of development is boosted. Economic development at the village level can be done, but it will never reach the economic scale to enter the manufacturing sector (rural industrialization). This sector is characterized as being more capital intensive and requires large amounts of raw materials so that production efficiency and competitiveness can be realized. The problem is this requirement will be difficult to obtain if the unit of economic movement is at the village level.
Thus, the deepening of village economic development is parallel with the choice of shifting the fulcrum of development to rural areas, where between five and 20 villages make a consensus on the deepening of the economic movement. This shift in the basis of development is relevant in four cases. First, rural areas make deepening of economic development more likely to be done due to the fulfillment of the economic scale.
However, if it is bridged by (an economic organization) at the rural level, its relationship with the cities will be more equal.
Second, rural areas bridge rural-urban relations. In a situation of weak village power, relations with the (economic actors) of the cities will inevitably be exploitative. However, if it is bridged by (an economic organization) at the rural level, its relationship with the cities will be more equal. Third, rural areas become a model of collaboration so that villages do not ruin or prey on each other.
Fourth, rural areas make effective facilitation from the government (central/regional) compared to developing the economy at the village level in very large (and small) numbers.
Empowerment and collaboration politics
Thus, in the future the movement for economic development in the villages requires five big consensus, all of which become one package of development: (i) Consensus of ownership/control of production aspects (land).
The RAPS program must be accelerated so that it becomes a locomotive to increase the people\'s production base in the villages; (ii) Consensus of economic organizations: cooperatives and Bumdes. Both are at the heart of economic establishment in villages/rural areas. The legal problem is quickly resolved so as not to stymie activities; (iii) Consensus of economic scale: collective and rural level. Economic activities are carried out collectively and the areas are shifted to the level of rural areas; (iv) Consensus of added value: agro-industry.
The economy must no longer rely on the production of primary commodities, which would only perpetuate poverty; and (v) Supply chain consensus that must be cut and controlled by the village economic organizations.
First, ideological awareness. Villagers and rural areas are facilitated to raise awareness of the strategic issues that result in the economic/political disadvantage of the villages (rural areas). The villages have the right to good fortune and economic independence, for example in the fields of food, energy and other things because the resources are relatively available (even partially abundant).
It is similar for gender issues, budget transparency, economic democracy, income distribution, control of production aspects, economic organization and so on. Basically, each citizen must have awareness and strategic knowledge to break down the structural cases of development in each village.
Second, technocratic awareness. At this level, each villager is equipped with technical/instrumental capacity to manage economic resources in the villages. The government has a good program called Kartu Prakerja (pre-employment cards). This program must be linked with strengthening the capacity of citizens with a community approach. Community independent learning is a choice that must be made in village/rural communities. For villages/rural areas that want to develop, for example, tourism, the capacity must be built upon in this field.
Similarly, villages that want to work in the field of fisheries, animal husbandry, plantations, and others; Community independent learning focuses on strengthening the technical capacity. The Manpower Ministry should seriously design the pre-employment card program for villagers so that cooperation with the Health Ministry is a necessity that cannot be denied from the beginning of work.
The rest, economic development and village empowerment, is clearly not possible to be borne by the Villages, Disadvantaged Regions and Transmigration Ministry alone, let alone just from village funds. This is a big battle that can only be raised by cross-stakeholders so that the collaboration politics is a fixed price. The cooperation currently undertaken simply rests on three legs.
First, the synergy of programs and activities. Cross-stakeholders (government or private) only agree on a few programs/activities, but execute excessively. Tasks are divided based on the competencies and resources they have.
Second, budget consolidation. Budgets related to villages are only for the focus of activities that have been decided. Each party carrying out these activities must not be shifted based on the tastes of each stakeholder.
Third, advocacy and policy promotion. Production, trade, tax, investment policies and others must be formulated and introduced in a friendly way for village development. The alliance of institutions and understanding of ideas could be one way for successful village development in the future.
Ahmad Erani Yustika, Professor at the School of Economics and Business, Brawijaya University; Director General at the Villages, Disadvantaged Regions and Transmigration Ministry 2015-2018