INNOVATION IN DEVELOPING VILLAGE OWNED ENTERPRISE (BUMDES) AS SOCIAL ENTERPRISE By : Bambang Ismawan INDONESIA-JAPAN LOCAL ADMINISTRATION SEMINAR JAKARTA, AUGUST 25, 2016 8/25/2016 Village Owned Enterprise - Bambang Ismawan

VILLAGES: THE ROOTS OF A COUNTRY A COUNTRY IS A BIG TREE A TREE’S strength, growth and development are determined by the health of its roots If the villages are productive, self-sustained, prosper and peaceful , the country will be strong, productive and prosper 8/25/2016 Village Owned Enterprise - Bambang Ismawan

A VILLAGE ACCORDING TO VILLAGE LAW 6/2014 State-organised Village or Costumary (Adat) Village is legal community unit with territory and borderline, authority to manage their administration and local community interest based on community initiatives, traditional rights or the rights of origin, as it is recognised and respected in the state administration of Republik Indonesia. (Village Law 1:1) 8/25/2016 Village Owned Enterprise - Bambang Ismawan

VILLAGE DEVELOPMENT APPROACH BETTING ON THE STRONG, rely on the stronger part of community, the landholders, the more educated and more skillful individuals. It has been the approach of many VILLAGE development agenda, such as : Bimas Exclusive Development at VILLAGE Level BETTING ON THE MANY rely on social capital and collectivity, every villagers are counted, and having the opportunity to grow together regardless poor or rich, educated or not, skilled or unskilled. Inclusive Development at VILLAGE Level 8/25/2016 Village Owned Enterprise - Bambang Ismawan

INCLUSIVE DEVELOPMENT Inclusive development is an approach that equally values all members of the society and incorporates the contributions of all stakeholders - including marginalized groups - in addressing development issues. VILLAGE LAW 6/2014 gives Opportunity for Inclusive Development based on principles of RECOGNITION and SUBSIDIARITY 8/25/2016 Village Owned Enterprise - Bambang Ismawan

VILLAGE DEVELOPMENT INFRASTRUCTURE Innovation at the village level can be based on Social, Financial and Production Infrastructure Within the framework of Inclusive Development 8/25/2016 Village Owned Enterprise - Bambang Ismawan

VILLAGE OWNED ENTERPRISE (BUMDES) ACCORDING TO VILLAGE LAW 6/2014 A BUSINESS ENTITY, which is partly or wholly owned by a Village, through direct investments originating from separating a sum of asset of the village which is managed for the prosperity of the villagers. Establishment of BUMDES is carried out in an consultation and agreement of the Village Council, and defined with a village regulation. Two Villages or more can establish one BUMANDESA (Inter-Villages Owned Company) A Village-owned company (BUMDES or BUMANDESA) can develop a join cooperation with third party 8/25/2016 Village Owned Enterprise - Bambang Ismawan

INNOVATING BUMDES IN SOCIAL ENTERPRISE PERSPECTIVE Bina Swadaya Perspective BUMDES is a business entity with Social Entrepreneurship approach, practising Social and Sustainable Development with Entrepreneurship Solution. Social and Sustainable Development comprises of efforts in Poverty Alleviation, Productive Employment and Social Integration as well as Preserving the Environment in Sustainable Manner. As Social Enterprise the profit or surplus of BUMDES is allocated to village development as well as for the benefit of villagers’ welfare 8/25/2016 Village Owned Enterprise - Bambang Ismawan

BUMDES OPERATIONAL STRUCTURE (Bina Swadaya Perspective) Subsidiary Company (with 3rd Party) CBO BUMDES CBO Community Based Organisation (CBO) Microfinance Production & Marketing Appropriate Technology and the Environment Local Specific and creative economy CBO Unit Business (with Partner/Investor) CBO CBO CBO BUMDES can develop business units or subsidiary company throughout a joint cooperation with other parties CBO Citizen Community Based Organisation (CBO) Chairperson CBO VILLAGERS (Citizens) are given opportunity to own BUMDES through CBO mechanism 8/25/2016 Village Owned Enterprise - Bambang Ismawan

DEVELOPMENTAL FUNCTIONS OF BUMDES Development of COMMUNITY BASED ORGANISATION (CBO/KSM) : Each CBO is basically comprises of micro entrepreneurs, the process of each CBO made possible interactive adult -learning process, individual development and regeneration processes. Microfinance : The process of financial development and ability of each micro-entrepreneur to develop their home economy and business Production & Marketing : The development of production skills and organisations, value-adding, quality control, understanding customers and how to outreach the market in supply-chain. Appropriate Technology and the Environment : The use of technology which is friendly to villagers capacity in the learning and development processes in sustainable manner. Local Specific and creative economy : In relation of development of Indigenous Knowledge of special products, its production skills, resources and its supply-chain. 8/25/2016 Village Owned Enterprise - Bambang Ismawan

COMMUNITY BASED ORGANISATION OPERATION CBO DEMOCRATIC AND PARTICIPATORY ORGANISATION OPEN-MINDEDNESS INCOME GENERATING ORIENTATION HOME ECONOMICS DEVELOPMENT CAPITAL FORMATION BUSINESS DEVELOPMENT TOWARDS NEW IDEAS TOWARDS NEW COLLABORATIONS REGULAR MEETING REGENERATION AND EDUCATION LEADERS FROM MEMBERS OPEN AND TRANSPARANT ADMINISTRATION PARTICIPATORY PLANNING, EXECUTING AND EVALUATION 8/25/2016 Village Owned Enterprise - Bambang Ismawan

SELF RELIANCE DEVELOPMENT OF COMMUNITY BASED ORGANISATION CBO INFORMATION AND NETWORK DEVELOPMENT INSTITUTIONAL DEVELOPMENT BUSINESS FINANCIAL HUMAN CAPITAL 8/25/2016 Village Owned Enterprise - Bambang Ismawan

PEOPLE-CENTERED ORIENTATION BUMDES orientation is not merely business, the activities of community business development should create improvement in VILLAGE life, which can be indicated with Improving Community’s Smartness; improving ability to solve problems, negotiating solutions, making adjustment or judgment. Improving Self-Reliance; confidence in their own efforts, choices and abilities Improving Welfare; capacity to improving livelihood and social economic development Reconcile Life Together; to maintain peace and conflict resolution in daily social, economics and cultural actions Preserving The Environment In a Sustainable Manner; mainstreaming environmental sustainability in social and economic efforts 8/25/2016 Village Owned Enterprise - Bambang Ismawan

SOCIAL ENTREPRENEUR & PROMOTOR of SOCIAL ENTREPRENEURSHIP BINA SWADAYA (Est. 1967) SOCIAL ENTREPRENEUR & PROMOTOR of SOCIAL ENTREPRENEURSHIP A Foundation engaged in the business development, community empowerment, especially social and solidarity economy Developing Community-based institutions, such as: Self-Help Groups, Cooperatives, and Micro Banking DEVELOPMENT FOCUS Community Based Self Help Organization Development Microfinance Services and Development Community Based Production and Business Development Training and Education in Self-Reliance Local Spesific Development “TRUBUS KUSALA SWADAYA" Award for Individuals, Institutions and Organizations ONE FOUNDATION, 14 Companies for Community-based Socio-Economic Development 8/25/2016 Village Owned Enterprise - Bambang Ismawan

INCLUSIVE DEVELOPMENT Starts at the Bottom of the Pyramid 8/25/2016 Village Owned Enterprise - Bambang Ismawan

Founder & Chairman of Bina Swadaya Fundation Bambang Ismawan Founder & Chairman of Bina Swadaya Fundation Founder & Chairman Trubus Agriculture Magazine Founder & General Secretary of Indonesian Movement for Microfinace Development Founder & Chairman of Indonesia Social Entrepreneurship Association Founder & President of Sinergi Indonesia Founder and Chairman of Persab (Perhimpunan Sahabat Bangun) Flobamora Founder and Chairman of ASEC (Asia Solidarity Economy Council) Indonesia Founder and Vice Chairman of ISEA (Institute of Social Entreprenurship in Asia), Manila Founder and Board of Trustee of Unlimited Indonesia Email : b.ismawan@gmail.com 8/25/2016 Village Owned Enterprise - Bambang Ismawan