Further Action of the Establishment of Joint Village-Owned Enterprises with Village Financial Institutions to Manage Ex-PNPM-MPd Revolving Fund Activities which Have Not Been Transformed After Two Years Enactment of Government Regulation Number 11 of 2021

Abstract

One of the government programs in order to accelerate integrated poverty reduction is the National Program for Empowerment of Independent Rural Communities ('PNPM-MPd'). This program was established from 2007 to 2014 in 5,300 sub-districts of 33 provinces and allocated Direct Assistance to the Community ('BLM') funds which then became revolving funds managed by the Financial Management Unit ('UPK') at the sub-district level. However, in 2015, the management of this program was charged to the Ministry of Villages, Development of Disadvantaged Regions and Transmigration in accordance with the letter of the Minister of Home Affairs of the Republic of Indonesia Number 410/2454/SJ dated April 29th, 2015 regarding the transfer of management of 'PNPM Mandiri' Rural, 'PNPM' Generation and 'PNPM' Independent Agriculture. This definitely changes 'PNPM-MPd' to former 'UPK PNPM-MPd'.

In article 117 paragraph 1 of Law Number 11 of 2020 concerning Job Creation, it gives a strong footing to Village-Owned Entreprises ('BUM Desa') as Legal Entities, followed by the issuance of Government Regulation Number 11 of 2021 concerning 'BUM Desa', especially in article 73 paragraph 1 which mandates that 'UPK' be ex-'PNPM-MPd' must be formed into a Joint Village-Owned Entreprises ('BUM Desa Bersama') no later than two years from the promulgation of this Government Regulation. The issued of this regulation is based on a portrait of the legal vacuum regarding 'UPK' as the manager of the former 'PNPM-MPd' revolving funds. The aim of transformation of the regulatory mandate is to provide a policy solution to the vacuum of legal regulations which has the potential to cause problems in the management and accountability of Community Revolving Funds ('DBM').

Boyolali Regency is became a concern in the formation of Joint Village-Owned Entreprises LKD. This is based on the fact that there has not been a single former 'PNPM-MPd UPK' in Boyolali Regency that has been transformed into a Joint Village-Owned Entreprises. In the other hand, Malang Regency was designated as a pilot project for the successful implementation of PP Number 11 of 2021 where the former 'PNPM-MPd UPK' has simultaneously transformed into Joint Village-Owned Entreprises LKD. For this reason, this research took the two locations above as consideration to determine and analyze the success of implementing PP Number 11 of 2021.

This policy paper focuses on the implementation analysis of the implementation of PP Number 11 of 2021, especially Article 73 Paragraph 1, by analyzing policy strategies that are more effective and responsive in efforts to transform Joint Village-Owned Entreprises LKD, analyzing leverage factors, analyzing obstacles or barriers to realization of Joint Village-Owned Entreprises LKD. The study was carried out using the SWOT analysis method, namely Strength, Weakness, Opportunity, and Threat through a series of in-depth interviews with direct research, FGDs, and reviewing policy analysis publications.

There are several alternative recommendations for policy models for the transformation of Joint Village-Owned Entreprises LKD, which are the discussion regarding the transformation of the former 'PNPM-MPd UPK' is outlined in a separate discussion, more detailed chapter in the body of Government Regulation Number 11 of 2021, proposing a revision of Law 6 of 2014 regarding the obligations of Community Revolving Fund managers former 'PNPM-MPd' became Joint Village-Owned Entreprises LKD by providing rewards and punishments, empowering professional assistant staff to encourage the transformation process of UPK ex-'PNPM-MPd' into Joint Village-Owned Entreprises LKD, and also making a new Circular Letter ('SE') regarding implementation instructions for the obligation to apply Article 73 in PP Number 11 of 2021.