Research Article
Strengthen the Role of Village Owned Enterprises (BUMDes) to Improve Social Welfare and Reduce Inequality in Rural Areas: Lesson from Indonesia
@INPROCEEDINGS{10.4108/eai.10-8-2022.2320874, author={Arif Darmawan and Rizal Alamsyah and Risandi Koswara and Dwi Ahmadi}, title={Strengthen the Role of Village Owned Enterprises (BUMDes) to Improve Social Welfare and Reduce Inequality in Rural Areas: Lesson from Indonesia}, proceedings={Proceedings of the 3rd International Conference of Business, Accounting, and Economics, ICBAE 2022, 10-11 August 2022, Purwokerto, Central Java, Indonesia}, publisher={EAI}, proceedings_a={ICBAE}, year={2022}, month={8}, keywords={rural area social welfare village development village fund village owned enterprises (bumdes)}, doi={10.4108/eai.10-8-2022.2320874} }- Arif Darmawan
Rizal Alamsyah
Risandi Koswara
Dwi Ahmadi
Year: 2022
Strengthen the Role of Village Owned Enterprises (BUMDes) to Improve Social Welfare and Reduce Inequality in Rural Areas: Lesson from Indonesia
ICBAE
EAI
DOI: 10.4108/eai.10-8-2022.2320874
Abstract
The primary purpose of the village fund is to lessen the gap between urban and rural and increase social welfare in the Village. However, the existence of this village fund has not been fully optimized to improve the welfare of rural communities that have received village funds from the government. The multiplier effect of the village funds allocation only focuses on the physical infrastructure development sector, such as roads, buildings, and bridges, up to 37%. In comparison, the allocation to the community development sector is only 8%, or the smallest allocation from other sectors (social health, education, and investigation). In this case, Village Owned Enterprises (BUMDes) have a vital role in developing a community that combines the for-profit and social organization sectors. BUMDes aims to develop the village economy and public services, manage village potential, create markets and employment opportunities, and increase business and income for villagers. This study analyses BUMDes effectiveness, which uses a descriptive and quantitative method using an approach of difference in difference (DID) approach. This was chosen based on the argument that this research would be helpful for policymakers, especially the government, who have a role in the village fund program, and village officials, who also play a role in the use of village funds for the community's welfare through maximizing BUMDes.