How does the Village Fund contribute to job creation and reduce poverty and inequality in rural areas? What are the policies needed to further accelerate the acceleration of rural development by simultaneously empowering the potential of village human resources and local village material resources so as to enable the realization of sustainable and interconnected development with rural human development?
In the three years since 2015 the Village Fund Allocation continues to climb significantly. From Rp 20.67 trillion or around Rp 280.3 million per village in 2015 to Rp 60 trillion or around Rp 800.4 million per village by 2017. Thus it can be said that technically the “promise” of the Village Fund transfer reaches 1 billion per village realized.
The challenge then is how can the large amount of Village Funds actually help realize the creation of social justice and prosperity for the greatest prosperity of the villagers? Not just yawning and just facilitating facilitating infrastructure alone without creating economic acceleration?
One of the roads and challenges in genuine community empowerment efforts while simultaneously finding strategies of rural economic wrestling and eradicating village poverty and imbalances is to encourage the capability of allocation and allocation of Village Funds that once rowed can create jobs for villagers, and at the same time the basic needs project of the villagers through the development of infrastructure can go hand in hand, especially in the villages of the periphery of Indonesia. So the next question is how much will the Village Fund create jobs and how much to absorb the workforce?
The result is not bad. Field data show that by 2015, the labor absorbed as a result of village funding contributions amounts to 1.7 million people. Then in 2016 the labor absorbed as a result of the contribution of Village Fund amounted to 3.9 million people. And in 2017, the labor absorbed as a result of the contribution of the Village Fund amounted to 5 million people.
From these data, it can be said that the contribution of Village Fund in the absorption of labor in 2017 has increased up to 3 times the rate of employment.
Significant progress factor of the phenomenon of the absorption of local workforce that can be absorbed by the village development program and the contribution of the Village Fund in accelerating the village economy acceleration is the implementation of village fund development activities so far carried out in a self-managed and labor-intensive manner using local materials.
Village funds are channeled to the villages, utilized by the villages in building infrastructure supporting activities in the village such as building 21,811 units BUMDesa, 5.220 units Village Market, 21,357 units of PAUD, and 6,041 units POLINDES. The construction of the infrastructure has been influential in reducing the unemployment rate in the village, because it has the potential to absorb labor in the village. It is assumed that Posyandu can absorb labor force as much as 64,071 people, POLINDES can absorb 18.123 soul, PAUD can absorb 41,919 soul, BUMDes can absorb 65,919 soul, and Market can absorb 15.660 soul.
Labor and Poverty Reduction
The manifestation of labor-intensive movements through village funds can be seen with the use of village funds for wage labor in the village. In this case the government has a target to be able to reduce the rural poverty level in accordance with the percentage of the amount of funds used in the village.
The village funds used amounted to 20% of Rp 60 trillion, or about Rp12 trillion, then the average wage earned by poor households (RTM) is Rp 2,105,585. In this calculation, it is estimated that the number of jobs created is 3.2 million for RTM and 800 thousand for Non RTM.
It is then estimated that the role of village funds for poverty reduction costs is 12%, and the percentage reduction of the national rural poverty rate is 2%, so that the targeted rural poverty rate will decrease by 12%, and the target for the total poverty reduction will be 10%.
Meanwhile, if the village funds used amounted to 50% of Rp 60 trillion, or around Rp 30 trillion, then the average wage earned by poor households (RTM) is Rp 5,263,961. In this calculation, it is estimated that there are 8 million jobs for RTM and 2 million for Non RTM. It is estimated that the role of village funds on poverty reduction costs is 30%, and the percentage of national rural poverty reduction is 5%, so that the rural poverty rate will decrease by 9%, and the target for total poverty reduction will be 8%.
From the above calculation can be said that the greater percentage of the use of Village Fund for wage labor, the greater the target percentage of rural poverty reduction. So the management of labor-intensive development must be encouraged more intensely because it is the main road of job creation and is able to significantly reduce the village poverty rate.
The Cash Intensive Program as a substitute for the BLT (Direct Cash Assistance) initiated by the Jokowi-JK government actually gives great potential to the goal of village poverty reduction. In particular, the PDTT Village Ministry is the key and key actors that enable the program to actually facilitate and provide key support to the process that has been going on until now.
Clash of Implementation
Cash Intensive Program is a new program so that it may have constraints in the form of conflict between the ideals of welfare objectives dealing with the technical implementation of the existing laws and regulations. Thus, it is necessary to draw up regulation related to it or revise the old regulation. So that cash-intensive work programs can run without constraints for the realization of the ideal acceleration of economic growth and the reduction of village poverty and poverty through the Village Fund.
The technical clash of such regulations, for example, in the Attachment to Regulation of the Head of LKPP Number 13 Year 2013 concerning Guidelines on Procurement of Goods / Services in the Village (CHAPTER II Procurement of Goods / Services Through Swakelola) explained that “Especially for construction work is not simple, requires experts and / or heavy equipment, can not be implemented independently “. This leads to multiple interpretations, so a review of the policy is necessary.
Meanwhile, in the draft of PDTT Village Minister’s Circular Letter to all Governors, Regents / Mayors, and Village Heads on Local Peoples Involvement in the Implementation of Development through Village Funds, four points are emphasized: (1) the utilization of village funds is done by self-management, (3) it should be ensured that 30% of village funds are used for local wage labor, and (4) work involving the community is paid on a daily / weekly to increase people’s purchasing power.
Given the potential for accelerating development and at the same time encouraging acceleration of economic growth and the creation of village employment that will enable sustainable public purchasing power, the Program above requires a rapid response to policies in the form of; First, the compilation of a Presidential Regulation stating that village development activities take precedence over local labor and local materials. Second, Revision to Regulation of Head of LKPP No. 13 of 2013 on guidelines for procurement procedures for goods / services in the village. Third, Prioritize the use of Village Funds: a) Minimum 30% of Village Fund for labor; b) Labor includes all poor households (RTM); c) non-employed households assisted by food and clothing during the implementation of village development. Fourth, Accelerating Disbursement of Village Funds (Phase 1: March, Phase II: June Fifth Determining the type of reporting of development activities that is simpler and determined by regent regulation no later than March every year Sixth, Determination of wages of infrastructure activities: a ) Stipulated through regent regulation no later than March every year; b) Wages 80% lower than market price; c) Wages are paid weekly or daily.
If the ideal of development with self-managed and labor-intensive schemes through the utilization of the Village Fund can be sustained by technical and non-technical needs such as Government Regulations at the level of President and Minister, preparedness of companion resources, and maturity of planning from national to village level, it is certain that national development will be realized the strong fundamentals of the village and the goal of prospering the people by extending social justice may find a more spacious path. (*)
Author: Sabiq Carebesth (Bureau of Public Relations and Cooperation of PDTT)