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RJOAS, 12(132), December 2022 UDC 332; DOI 10.18551/rjoas.2022-12.14
VILLAGE FUND ALLOCATION POLICY ON THE DEVELOPMENT OF THE BASIS ECONOMIC SECTOR IN THE VILLAGE: A CASE STUDY IN TWO VILLAGES OF LEBATUKAN DISTRICT, LEMBATA REGENCY, INDONESIA
Sinu Ignatius, Klau Fidelis, Abdurrahman Mustafa, Nendissa Doppy Roy*
Department of Agribusiness, Faculty of Agriculture, University of Nusa Cendana Kupang,
Indonesia *E-mail: ignatius.sinu@gmail.com
ABSTRACT
The Village Fund policy in the context of community empowerment is primarily emphasized on giving trust to the poor to manage their own household economy. The central government's policy of allocating a number of budgets directly to villages to be managed provides convenience for the government and village communities to optimize the potential of their resources. This research is directed to examine models of village community empowerment with the support of the Village Fund, and to analyze the effect of program realization on strengthening the leading sector in the village. The village government of Hadakewa and Dikesare manages Village Funds with a self-management pattern to empower their potential, create jobs and encourage residents to open their own jobs. Policy, planning, implementation, evaluation are all arranged with the community. As suggested in the Village Fund management manual that with a self-management pattern, it means that the planning and implementation of these activities is carried out independently by the village. The management of village funds in the villages of Hadakewa and Dikesare succeeded in creating a village economic base that sided with the poor, bringing the poor in both villages out of the cycle of poverty that was passed down from generation to generation. BUMDes, the institution entrusted with managing village finances, continues to experience capacity building. This fact is also the target of the central government to allocate village funds to villages. The Development Economics approach which emphasizes the importance of institutional development for effective functioning of the market should also be developed in laying the foundation for development policy making. BUMDes, which is highly expected to have a presence in the village, must be a concern for the village government and village communities for the sustainability of the development that is currently running dynamically.
KEY WORDS
Village fund, policy, allocation, development, basis economic, village.
The primary resource of the production system is the human mind, initiative, and creativity itself; therefore, the fundamental strategy is the efficient use of resources. In its application, participatory development rejects the satisfaction of human wants in favor of a self-organizing system aimed at establishing socioeconomic conditions that will enable individuals to more easily meet their own needs and further their own personal development (Andreoni, Nikiforakis, & Currie, Elton, Todd, & Platt, 1997; Hoff & Laursen, 2019, 2019; Morales, 2014; Super, Beulen, Koelen, & Wagemakers, 2021; Stoop, 2021; Andreoni et al., 2021).
Since 2015, the Indonesian government has funded a sizable village money to be distributed to the community each year. Money follows function and money follows programs," village programs are also given sufficient funding sources to manage their potential for enhancing the local economy and welfare. Utilizing the Village Fund, it is vital to investigate the socioeconomic makeup of the neighborhood in order to achieve this goal. As the foundation for human growth, anthropologists, according to George Dalton (in Narol and Cohen, 1973:454), give an analysis of the s(Greider & Garkovich, 1994; Koohafkan & Altieri, 2011; Skinner, 1964; Stinchcombe, 2000) The community's social structure is an economic organization that can be explained by reference to long-standing local community transaction
models, including those involving land, labor, production processes, markets, inter-village and inter-urban trade, and the use of money as a medium of exchange (Chorev-Halewa, 2019; Whitelam & Pfoh, 2018).
Village Funds are APBN (state revenue and expenditure budget of Indonesia) funds designated for villages that are transferred through the Regency/City APBD and prioritized for the implementation of development and empowerment of rural communities. With the aim of enhancing public services in villages in order to (1) reduce poverty, (2) advance the village economy, (3) bridge development gaps between villages, and (4) strengthen village communities as the subjects of village development, village Funds are APBN (state revenue and expenditure budget of Indonesia) funds that are allocated for villages.
The state of the village community itself has a significant impact on whether the development goals are met and how empowered rural communities (Eade, 1997; Kabeer, 2005; Montgomery & Weiss, 2011; Mosedale, 2014, 2014; Nikkhah & Redzuan, 2009; Yunus, 2004). Rural towns are constantly characterized in terms of poverty, poor income, and sometimes even the community's own helplessness while discussing economic progress. The economic activities of the village community that influence the rate of development at the village level are the subject of the study utilizing the rural community economic development approach. Village-level economic activities are diverse, therefore they are frequently categorized as odd economic activities—activities with sufficient labor and resources but extremely low income contributions—which worsen village poverty. Since 2015, the Village Funds have been coming into the village annually. These funds should have gone a long way toward helping the village find solutions to issues relating to economic development, from the straightforward to the more intricate, to higher-level market competition. Success in managing the Village Fund should also be measured by economic growth outside of the village, in neighboring villages, and in the urban area. The urgent goal of this economic anthropological study is to increase empowerment values in fundamental village economic operations. The incompatibility of rural community economic empowerment programs is influenced by the lack of knowledge of the fundamental economics of rural areas.
METHODS OF RESEARCH
This study is a descriptive one that relies heavily on qualitative analysis. According to Koentjaraningrat (1984), thorough field data collected through interviews and direct observation are essential for qualitative analysis to be successful. Only via rigorous interviews and observations can comprehensive empirical data and direct interview data be gathered that have a high level of confidence and are appropriate as data for analysis.
In-depth interviews conducted utilizing interviewing guidelines, surveys, focused group discussions, and direct observation are all used to collect field data. A substantial and diverse amount of data is the end outcome. As a result, the following step is to tabulate and classify data to choose from. Problem identification will take place in the tabulation format, followed by the discovery of problems connected to the study's objectives and the formulation of hypotheses based on those ideas and concepts.
Economic growth and the development strategy were applied in this study. Regional economic growth will be impacted by development interventions in each development sector. By facilitating better communication through the state of transportation facilities and infrastructure, builders in the field of transportation facilities and infrastructure will have an impact on the advancement of growth in the agricultural sector and other sectors. The position of the base economy in its function in the dynamics of economic growth in the village with the intervention of village funds can be explained by the development and economic growth approach. To address the economic issues that rural society faces, the policy for the direct distribution of village funds to the village, to be handled by the community itself, is based on a number of factors.
The village government, local residents and farmer/fisherman organizations, extension workers/companions and officers in the village, tourism actors, and visitors to the village are
some of the sources of the information needed. A thorough field investigation and literature review will be used to collect the data. The information required relates to the following topics: (1) the type(s) of economic activity, (2) household economic contributions derived from economic activity, (3) the performance of supporting facilities for economic activity, and (4) village conditions, supporting facilities, and infrastructure.
Unstructured interviews, also referred to as free-form interviews, are performed in-depthly. Interviews were performed using interview guidelines, which only included questions and main assertions, rather than a list of questions or questionnaires that had been prepared before heading out into the field. Although the interview guide does not have a set structure, the interview questions are always developed with the research topic in mind. The nature of the query is open-ended, and the researcher always seeks to craft inquiries that can prompt the informant to offer responses or in-depth justifications (Danandjaja, 1988:102; Koentjaraningrat, 1989:139). The most important thing is to establish good connection with the informant. In an effort to show his or her appreciation, the researcher made an effort to probe the informants with questions and listened attentively to their long-winded explanations. Because qualitative research methodologies demand that researchers conduct their studies under actual situations (Taylor and Bogan, 1984). Structured questions were produced in the form of a questionnaire, and the respondent farmers answered them in order to specifically determine the amount of economic contribution.
RESULTS AND DISCUSSION
Lembata Regency, East Nusa Tenggara Province, contains the villages of Hadakewa and Dikesare. Lembata Regency, which was split off from East Flores Regency in 1999, is an island district. On the north shore of Lembata island, namely in the Lebatukan sub-district, are the villages of Hadakewa and Dikesare. The Lebatukan sub-district is centered at Hadakewa, whereas Dikesare, which was formerly a part of the Tapolangu village area, is known as Lewoleing. As a result, although traditionally and more commonly known as Lewoleing, this village is officially known as Dikesare.
Both of these towns feature tourist attractions, are situated in a fish-rich harbor, have a variety of natural coral reefs, calm bay waters, and lovely beaches. As a result, the administrations of these two villages transformed them into tourism destinations using village finances. Both of them offer tourist destinations, with a focus on sea tourism and traditional cuisine tourism that has made visiting these two towns a habit for locals. Village funds for Watodiri village are distributed with a concentration on traditional culinary tourism, marine tourist, cattle, and cashew farming, whereas village funds for Hadakewa village are distributed to two economic areas, namely capture fisheries and tourism.
The purpose of the Village Monies, which are APBN funds allocated to villages, is to enhance public services in villages in order to reduce poverty, promote the local economy, close development gaps between villages, and strengthen village communities as development subjects. A drop in the Gini Ratio from 0.34 in 2014 to 0.32 in 2017, two years after the Village Fund program began, is just one example of the major adjustments made since the 2015 budget. Following this drop, there was a drop in both the percentage and total population of the poor in rural areas, which translates to a higher, more equally distributed level of welfare. Similar to what the inhabitants of Hadakewa and Dikesare are going through, this theory makes sense.
The village authority of Hadakewa has concentrated on creating a fresh image for the hamlet with the introduction of the Village Fund in 2015. The goal of the new representation is to develop a village-based economic hub. In order for Hadakewa Village to be well-known, to be able to communicate at the local, state, and even federal levels, as well as internationally, it needs its own icon. In order to increase welfare, the Hadakewa village administration and the locals are highly motivated. As a result, it should become easier for them to obtain the income they need to support themselves in the future. Hadakewa village's administration and residents are urgently urged to use local monies to enhance their welfare so that they won't have trouble in the future finding money to cover their basic expenses.
The Hadakewa village government allocated 140 million ruphias from village funds for the development of this potential in 2015, with an emphasis on managing anchovies to become a potential and icon of Hadakewa community. With the help of this program, Hadakewa became well-known as an anchovies producer in a remarkably short period of time. Anchovy and hadakewa are equivalent terms. In order to maintain empowerment in the marine and fisheries sectors, 380 million ruphias were allocated from village finances in 2016. A rural community institution called BUMDes manages the funds with a profit-oriented philosophy. With that kind of money, a jetty was constructed, which now serves as a mooring spot for several fishing boats that travel to the sea of Hadakewa Bay in order to capture fish. Each ship that docks at the jetty pier is subject to a levy, one of the PADes, including cargo ships and fishing vessels (village real income). BUMDes receives a sizable sum of mooring compensation each year.
On the Hadakewa coasts, slum areas where locals threw their waste were cleaned up, and made into a recreation area in 2017. This was done with the help of village funds. A futsal field, reading park, and training facility were created in the location, which had been known for years to be filthy. The three buildings constructed with cash from the village are intended to become the prototypes for creative economic hubs. Training facilities and reading parks, as well as futsal fields, can be used for paid recreational sports activities (sports tourism). In addition to enjoying the local cuisine produced by BUMDes, people visit this location to read while having fun. In the meanwhile, parties and other events can be held in the training room. The Hadakewa village's economy is gradually transitioning from an ad hoc economy to one centered on tourism and fishing thanks to these actions.
Anchovies become the symbol of the development of the Hadakewa village in this initiative, which also aims to create the necessary infrastructure to support tourism as Hadakewa transitions into a tourist destination. The tourism industry is the primary target of the 2020 community fund. In order to transform Hadakewa village into a tourist destination, the village government is constructing a lot of amenities, including an outbound, swimming pool, flying fog, homestay, private garden for children, and a culinary and fishing center. The BUMDes organization oversees this tourist asset.
Real village income (PADes) growth in Hadakewa is still being driven by developments in the tourism and fishing industries. The Hadakewa PADes from these two sectors were worth 13 million rupiahs in 2016, 30 million rupiahs in 2017, 64 million rupiahs in 2018, a significant increase to 100 million rupiahs in 2019, and a drop to 64 million rupiahs in 2020 as a result of Covid-19 epidemic tragedy.
The Village Fund in Hadakewa Village made a significant contribution to the formation of two sectors as the basis of the economy, namely boat fishing and tourism. These two base sectors are successful:
• Become a new job opportunity for villagers;
• Absorb a large number of workers, where all villagers are absorbed as labor in these two sectors, as fishermen, tourism actors, and laborers;
• These two sectors provide a large income, where workers who work in these two sectors earn more than 2 million ruphias;
• These two sectors are able to compete in local, regional and national markets;
• Providing ever-increasing contributions to PADes; PADes 2015 was 15 million ruphias. In 2016 it was 30 million ruphias, and in 2020 it was 300 million ruphias.
In 2018 the village government started a tourism village program, the target of which was for the Dikesare village to make tourism as the village's economic center. By allocating a number of funds from the Village Fund, a number of facilities were built that managed to attract many enthusiasts to travel to Lewolein and Nuhanera beaches. 52 people are employed to manage tourism in Dikesare village. Every time Lewolein is visited by tourists, and what is extraordinary is that every month the village government benefits from tourism activities in this village of 6 million ruphias. The last income before tourism activities were jammed by the COVID-19 pandemic was 6.6 million ruphias. The actors in the tourism sector, as many as 52 people in this village, are paid 1.5 million ruphias per month, not to mention the tips they receive from visitors. PADes sourced from tourism services in 2019
reached 60 million ruphias, and a sharp increase in 2020 revenue from PADes reached 100 million ruphias.
Village funds have a strong influence on the formation of the economic base in Dikesare village. The economic base in cashew farming was fully supported by financial assistance from the provincial government in 2008 and 2009. The animal feed in this village is a self-help program with little financial support from the provincial government. Then the procurement of cows for villagers with the Village Fund is a program to utilize the availability of animal feed in this village. Village fund support for development in this village focuses more on tourism, starting from fixing tourist spots in this village, procuring supporting facilities, and moving traditional culinary delights into tourist spots on the beach.
This village has three sectors as economic centers, namely cashew farming, cattle farming, and marine tourism. Village funds have a very large influence on the formation of these three sectors as the economic basis of the Dikesare village, where these three sectors are successful:
• Become a new job opportunity for villagers;
• Absorb a large number of workers, where all villagers are absorbed as labor in these three sectors;
• These three sectors provide a large income, where workers who work in these three sectors earn more than 2 million ruphias;
• These three sectors are able to compete in local, regional and national markets;
• Make a significant contribution to PADes, such as PADes sourced from tourism in 2019 of 60 million ruphias and a sharp increase in 2020 to 100 million ruphias.
Village Funds that are well managed and focused on realizing an economic base in the village have succeeded in creating an economic base for the villages of Hadakewa and Dikesare. This has succeeded in providing answers and dispelling doubts over giving trust to the poor to manage themselves by using optimally the funds received. Through the formation of a village economic base, welfare will automatically increase, equitable distribution of village development through improving public services in the village, advancing the village economy, overcoming development gaps between villages and strengthening rural communities as subjects of development (Arsyad Lincolin, 2004; Harpa, 2015). Over the years, the problem of poverty has been difficult to solve because trust is given to other parties, who of course do not understand in many ways the conditions of the poor, both from an economic, social, cultural point of view, let alone local politics. And when trust is given directly to the needy, then that trust is well maintained, in a participatory development process between government and citizens (Hart, Gillian, et al, 1989).
The village government of Hadakewa and Dikesare manages the village fund by involving the community, carrying out activities with a self-management pattern, using local workers, creating job opportunities and encouraging residents to open their own jobs. Policy, planning, implementation, evaluation are all arranged with the community. As suggested in the village fund management manual, that with a self-management pattern, it means that the village is trying to plan and implement these activities independently, so that the money used for development will not flow out of the village. By using local workers, it is hoped that the implementation of the activities can absorb labor and provide income for those who work. Meanwhile, the use of local raw materials is expected to provide income to the people who provide raw materials (Sinu, 1992; 1994; 2007). Village funds that focus on strengthening the basic economic development in the village do not flow outside the village, but with the existence of an economic base in the two villages, they have succeeded in bringing in large amounts of funds to the village.
The management of village funds in the villages of Hadakewa and Dikesare succeeded in creating a village economic base that sided with the poor, bringing the poor in both villages out of the cycle of poverty that was passed down from generation to generation. BUMDes, the institution entrusted with managing village finances, continues to experience capacity building. This fact has also become a target for village funds to be allocated to villages. This is in line with expectations regulated through regulations that result in an effective, efficient, and accountable Village Fund management system (Harpa Elena, et al; 2016).
The success of managing village funds by the village government of Hadakewa and Dikesare supports other studies, such as the results of the evaluation of the use of the village fund in 2016 and 2017 showing that the village fund has succeeded in improving the quality of life of rural communities as shown, among others, by a decrease in the ratio of rural inequality from 0, 34 in 2014 to 0.32 in 2017. The decline in the number of rural poor people from 17.7 million in 2014 to 17.1 million in 2017 and, a decrease in the percentage of the rural poor from 14.09% in 2015 to 13, 93% in 2017. This achievement will be further improved in the years to come with good management of the village fund (see also Mulyadi, 2007).
Development with the support of village funds in the villages of Hadakewa and Dikesare can be explained by production and human-oriented development. Production-oriented development is approached with economic development (economic development model) and human resource empowerment (community development model). Poverty (human) is basically sources of income for the population that have low competitiveness because they have not been managed properly and have not been optimized. The available sources of income cannot be optimized with one of the main constraints being capital. The Fund provides answers to problems faced by generations, with the village funds of the villagers of Hasakewa and Dikesare being successful in optimizing the potential of available resources as sources of competitive income, making a significant contribution to the dynamics of social and economic development of the villagers.
David Korten (in Mubyarto and Kartodirdjo, 1988:70) explained that the critical difference between production-oriented development and human-oriented development is that first humans are placed as subordinate to the production system. Meanwhile, human-oriented development is what is needed in the production system to meet human needs. Humans in this case are not tools or production machines, but the subjects who run the production machines. Production-oriented development prioritizes the development of production systems and efforts to increase production efficiency. Humans are seen as part of the production system, by placing capital as the main resource of the economic system and production system.
David Korten's view is correct. The development approach with the support of village funds in the villages of Hadakewa and Dikesare is both production-oriented and human-oriented. Poverty of the two villages is because economic resources have not been used optimally with capital as a constraint. If capital is available, and the ability to manage available capital focuses on optimizing the potential of available economic resources, the problem of population poverty will be answered. The theoretical view of synthesizing the production-oriented view of development and the human-oriented view of development was successfully implemented in the villages of Hadakewa and Dikesare. Optimizing the potential of available resources with village funds as implemented in Dikesare and Hadakewa villages according to the approach initiated by this research are:
"People centered development approach, the main resource of the production system is the human mind, initiative and creativity, so the basic strategy is the optimal use of resources. Human-oriented national development also emphasizes the characteristics of participatory development, in which planning, implementation, and evaluation are carried out together with the community. Participatory development in its implementation ignores the fulfillment of human needs and focuses more on a self-organizing system that is directed at creating socio-economic conditions of life, where people more easily fulfill their own needs in ways that they can develop themselves as much as possible."
One important growth model that is widely applied is the Harrod-Domar model. Harrod-Domar's application of the need for outside assistance to finance development is often found in practice. Easterly even observes that the implementation of this model was carried out by donor agencies such as the World Bank, by estimating the external funding needs of developing countries every year. As a result, many of these countries are trapped in a debt trap. Village funds are included in "external assistance" as Harrod Domar intended, but village funds are not in the form of soft loans, even though it is mandatory for village communities to repay them. The village fund is an endowment fund in the village, which
should always remain in the village. It would be a big mistake if the funds were no longer found in the village a few years later. The village did not experience growth, let alone growth on an economic basis. Assumptions like this have been and are being carried out in the villages of Hadakewa and Dikesare. The economies of these two villages are growing rapidly thanks to the support of village funds.
However, it is also necessary to be wary of Domar's views regarding the law of diminishing returns, not to one day, or at a certain point the returns will be very low which will have an impact on the economic downturn in the two villages. It is very likely that development will occur in the fishing sector of Hadakewa Village, where cultural jumping occurs, from people with land culture (farmers) to people with marine culture (fishermen). The caveat that needs to be taken into account is that the village economy is not developing due to a lack of capital inflows, arguing that the return to capital is unattractive. It is interesting indeed, that the flow of funds into the two villages is through economic bases, but there is a problem that can become crucial in relation to financial imperfections and complementary variables, such as an educated, experienced, and skilled workforce. The government's intervention with village funds for the villages of Hadakewa and Dikesare succeeded in attracting capital flows, which could lead to various inefficiencies which were obstacles to their development or sustainability. The economic base built with village funds in the villages of Hadakewa and Dikesare is vulnerable to failure with the factors that are being experienced by themselves are an educated, skilled, experienced workforce, and financial institutions that should have been built, but still seem half-hearted. Institutions such as BUMDes, which are highly expected to have a presence in the village, are still a question mark regarding the seriousness of the village government and village communities regarding the presence of GUMDes.
Therefore, this line of thinking needs to get attention, where it is explained that in general it can be put forward that the performance of economic growth that can improve the welfare of the community will not be possible if the supporting factors (SOC) are not formed so that they are truly conducive to the growth process. Furthermore, the accumulation of each variable H, K and R should always be pursued. The degradation of R, as many environmental experts have pointed out, needs to properly formulate the pattern and implementation of its prevention policies. From a modeling perspective, how the form of the relationship between H (HR), K (capital) and R (natural resources) simultaneously determines the level and rate of growth is also an interesting study. Can the ongoing degradation of R be replaced by the accumulation of K and H? What is clear is that policy priorities that place too much emphasis on accumulation of K are not in line with development goals to achieve quality growth, namely growth by utilizing the potential of natural resources in a sustainable way.
CONCLUSION
The management of village funds in those two villages, Hadakewa and Dikesare, had a significant effect on the building of the economic base in those two villages. The economic base of Hadakewa village is fishing and tourism, while the economic base of Dikesare village is tourism, agriculture and livestock. The basic sectors support each other and get strong support from the non-base sectors that have grown in those two villages. These main sectors are able to absorb a large number of workers in those two villages, and make a large contribution to PADes, the original income of those two villages.
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