Tangguh Pratysto, Fransiscus Xaverius Sugiyanto, Deny Cahyadinanto Sanjoko, Maulana Ghani Yusuf, Moh Najikhul Fajri

VILLAGE-OWNED ENTERPRISES IN BREBES REGENCY: GOVERNANCE GAPS, MARKET COMPETITION, AND PATHWAYS TO SUSTAINABILITY

Introduction

Village-owned enterprises in brebes regency: governance gaps, market competition, and pathways to sustainability. Discover challenges for Brebes' Village-owned Enterprises (BUM Desa), from governance gaps and market competition to sustainability. Learn how strengthening legal frameworks can boost local economies.

Abstract

The poverty rate in Brebes is among the highest in the province, with 15.6% of its people living below the poverty line in 2024. To overcome these problems, Village-owned Enterprises (BUM Desa) were introduced through Law No. 6 of 2014 to tap local potential, boost welfare, and raise Village Original Revenue. While every village in Brebes has a BUM Desa, many are still at the beginning of their development and experience setbacks in areas such as legal formalisation, governance, managerial skills, and market competitiveness. This research uses a qualitative approach and a semi-structured interview with the Baperlitbangda and Dinpermades to analyse the institution's performance and its relationship with the emerging Koperasi Desa Merah Putih (KDMP). The findings indicate reliance on individual leadership, high levels of non-performing loans, and unclear market-share allocations, as Village-Owned Enterprises (BUMDes) are suspected of competing with KDMPs rather than collaborating with them. Strengthening the legal framework for professional management of Village-Owned Enterprises (BUM Desa) in Brebes Regency is necessary to realize a dynamic village economy.

Review

This paper, "VILLAGE-OWNED ENTERPRISES IN BREBES REGENCY: GOVERNANCE GAPS, MARKET COMPETITION, AND PATHWAYS TO SUSTAINABILITY," addresses a critical issue of local economic development and poverty alleviation in Indonesia. It investigates the performance and challenges of Village-owned Enterprises (BUM Desa) in Brebes Regency, a region marked by a high poverty rate. The research aims to understand the governance gaps, market competition dynamics, and potential pathways to sustainability for these enterprises, which were established under Law No. 6 of 2014 to harness local potential and uplift community welfare. The study adopts a qualitative methodology, relying on semi-structured interviews with Baperlitbangda and Dinpermades to analyze institutional performance. The abstract effectively identifies several significant obstacles hindering the progress of BUM Desa in Brebes. It notes that despite universal establishment, many BUM Desa are nascent and plagued by issues in legal formalization, robust governance, managerial skill deficits, and market competitiveness. Key findings highlight an over-reliance on individual leadership, a troubling incidence of non-performing loans, and ambiguity surrounding market-share allocations. A particularly interesting observation is the suspected competition between BUM Desa and Koperasi Desa Merah Putih (KDMP) rather than collaborative efforts, which suggests a potentially counterproductive dynamic within the local economy. This research offers valuable insights into the practical challenges confronting local development initiatives in a high-poverty context. The primary recommendation to strengthen the legal framework for professional management of BUM Desa is well-supported by the identified governance and skill gaps. While the abstract clearly outlines the problems, future iterations of this work could benefit from a more detailed exploration of the specific "pathways to sustainability" mentioned in the title. Additionally, incorporating perspectives directly from BUM Desa managers, KDMP representatives, or community stakeholders could provide a more nuanced understanding of the local economic ecosystems and the intricate relationship between these entities.

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