Ten years since the enactment of the Village Law, the number of Village-Owned Enterprises (BUMDes) has continued to rise. In 2023, there were 58,065 active BUMDes across Indonesia. However, their impact on village economies remains limited.
Professor Bambang Hudayana, Head of UGM’s Center for Rural and Regional Studies (PSPK), stated that BUMDes should drive villages toward self-sufficiency, generating their own income to improve community welfare.
“BUMDes were established as mandated by the Village Law, granting villages autonomy to govern themselves, making them more responsive to their communities,” Professor Hudayana explained on Thursday, Feb. 26, 2025.
From his observations, he noted that villages often have low average incomes, which in turn affects public services and welfare.
While village funds, another product of the Village Law, have helped, they are insufficient to foster village independence.
“Villages must focus on investing their revenue in development, not bureaucracy or enriching officials,” he added.
Professor Hudayana believed that BUMDes can be developed across various sectors in accordance with the community’s needs.
BUMDes should not only manage businesses but also be businesses that have a positive impact on society.
Professor Hudayana, who is also a lecturer of Anthropology at the Faculty of Cultural Sciences, UGM (FIB UGM), provided an example of how BUMDes can create a market establishment program.
“Creating a market does not mean eliminating traders, but instead opening opportunities for traders to have a spacious, comfortable, good, and cheap place of business so that they can control costs for consumers. Thus, the village has income from renting stalls, and traders have income from selling,” he explained.
One success story is Karangrejek BUMDes in Gunungkidul, Yogyakarta, which provides clean drinking water for its residents, ensuring 24-hour access even during dry seasons.
This initiative has alleviated concerns about water shortages, especially during the dry season.
However, Professor Hudayana acknowledges that not all BUMDes have thrived.
Some face challenges, including the mismanagement of funds by local elites.
“Without community involvement, BUMDes cannot strengthen village economies. The goal isn’t just profit but public benefit,” he emphasized.
He admitted that communities can also be resistant to the existence of BUMDes, especially if they feel that BUMDes are competitors.
In fact, according to him, these issues require attention.
The same applies to individuals who feel excluded or lack opportunities to participate in BUMDes activities.
“This resistance is not a problem but a call for better management to ensure community participation,” he said.
In addition, Professor Hudayana emphasized that BUMDes must be transparent in their activities so that the community understands the conditions prevailing in the field.
Optimizing BUMDes will still be homework for all stakeholders, but with several BUMDes that have started to show their benefits.
He hopes that BUMDes can continue to be developed.
He encouraged universities and research institutions to provide guidance, training, and support for BUMDes. This could include teaching digital economy skills, business planning, or even promoting a social aspect that encourages women to be economically independent.
“Universities can play a direct role by going down to the community as has been done both by the Directorate of Community Service and UGM students who go down through the Community Service Program (KKN-PPM),” he concluded.
Author: Lazuardi
Editor: Gusti Grehenson
Post-editor: Lintang
Illustration: Freepik