Economic Policy Formulation Risks to Existence Rural Creative Industry as a Form of Resilience Legal Protection
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Economic Policy Formulation Risks to Existence Rural Creative Industry as a Form of Resilience Legal Protection
Dewa Gede Sudika Mangku1, Ni Putu Rai Yuliartini2, Ni Ketut Sari Adnyani3
1Fakultas Hukum dan Ilmu Sosial Universitas Pendidikan Ganesha E-mail: [email protected]
2 Fakultas Hukum dan Ilmu Sosial Universitas Pendidikan Ganesha E-mail: [email protected]
3Fakultas Hukum dan Ilmu Sosial Universitas Pendidikan Ganesha E-mail: [email protected]
Article Info
Received:09th February 2022
Accepted:15th July 2022
Published:20th July 2022
Keywords:
Formulation; creative industry; policy; resilience.
DOI:
10.24843/JMHU.2022.v11.i0
2.p05.
Abstract
The purpose of this research is to find out, among others: (1) the development of the creative industry rural areas in Buleleng district in their resilience to the Covid 19 Pandemic; (2) the obstacles faced by the rural creative industry in the Covid-19 Pandemic situation; (3) Strategy in the form of economic policy formulation rises to the existence of the creative industry rural areas as a form of resilience in the legal protection of Small and medium-sized enterprises, in the face of a pandemic Covid 19 in Buleleng Regency. This research is an empirical juridical research with nature with the field of public policy studies. This sociolegal research uses a socio-economic approach referring to laws and regulations relating to the economic development of rural areas and Small Industry, a conceptual approach, and a case approach. Technique research analysis is a legal hermeneutic technique which is presented in a qualitative descriptive manner. The results of the study indicate that it is important for the government to assist in restoring and revitalizing the rural creative industry in Buleleng Regency with various government assistance and policies that can support Small Industry businesses. A total of 1,785 cooperatives and 163,713 micro, small and medium enterprises were affected by the coronavirus (Covid-19) pandemic. Strategy The government's policy is divided into various short, medium and longterm strategies, including short term and urgent, the government focuses on reducing the addition of COVID-19 fatalities with an emphasis on health sector stimulus and welfare assistance for the affected people.
The decline in turnover of the creative industry that Small & Medium-Sized Enterprises (SMEs) and cooperatives have complained about the impact of the Covid-
19 Pandemic has been very significant since its appearance at the end of 2019. Industry Tourism is one of the industries affected by the spread of this virus. sluggish the tourism sector has a domino effect on the Micro, Small, Medium Enterprises (MSME) sector. Based on the data reported from P2E LIPI1, the impact of the decline in tourism on MSMEs engaged in the micro food and beverage business reached ±27%. While the impact on small businesses food and beverage at ±1.77%, and medium-sized enterprises at ±0.07%. Effect of virus COVID-19 against wood and rattan handicraft units, micro-enterprises will be at ±17.03%. For small businesses in the wood and rattan craft sector ±1.77% and medium enterprises ±0.01%. Meanwhile, household consumption will also correct between ± 0.5% to ±0.8%.2
The rural creative industry under the coordination of the Cooperatives and Small Industry Service is a type of One of the businesses that have an important role in increasing PAD (Regional Original Income) is Province, especially in Bali. 3 The existence of the creative industry is very supportive of the growth rate the economy of rural communities, the creative industry is also aligned with other important sectors which is the leading sector of the government, especially in Buleleng Regency. So far, the existence of the creative industry has spurred the spirit of the community to create and realize ideas and innovations in supporting the level of fulfillment of the welfare of rural communities in generating income.4 However, in this pandemic period, rural creative industries such as ikat weaving, woven bamboo, split midrib figures, wood and rattan crafts, silver crafts and copper in Buleleng Regency were also affected. The impact of production fluctuations and Marketing is very influential on the survival of the creative industry in the midst of uncertainty on product sales. Judging from the income segment, the average creative industry in the Regency Buleleng complains that the level of sales is gradually decreasing, so it affects to the decline in production and income.5
The squeeze of the economy requires business actors to increase innovation and creativity in their efforts to fulfill their daily needs. The existence of health protocol regulations provides an obligation for everyone in the Covid-19 zone to comply with these regulations.6 Referring to the Regulation of the Minister of Health Number 9 of 2020 concerning Large-scale social restrictions (LSSR) Guidelines, it contains
restrictions on certain activities of a resident in an area infected with Covid-19, including restrictions on the movement of people and goods in a City/Regency in the context of preventing Covid-19 7
The economic crisis during the Covid-19 pandemic has become a reality that must be resolved immediately. This epidemic has not only hit Indonesia's health sector, but the economic sector has also been chaotic and destroyed by it.8 Following the pandemic situation in the midst of the dynamics of the creative industry movement, innovation and creativity are the main keys for MSME organizations to be successful and able to survive in the pandemic era. Innovation and creativity show the ability to carry out updates that not only appear in various forms and functions of products and services but also in various business elements, for example related to the dimensions of time (eg inventory management and time to market) and space (options of market niches that are not read by other parties).9
This form of innovation is in line with the policy direction in order to increase added value the economy in 2020-2024 includes: (i) Strengthening entrepreneurship and MSMEs implemented with the strategy of (1) increasing business partnerships between MSMEs and Large Enterprises; (2) increase business capacity and access to financing for entrepreneurs; (3) increase the capacity, reach, and innovation of cooperatives; (4) increase the creation of opportunities businesses and start-ups; (5) increase the added value of social enterprises (BAPPENAS, 53). 10 Micro business Small and Medium Enterprises (MSMEs) are one of the pillars of the national economy, apart from being able to absorbing labor in the non-formal sector is also able to move the community's economy11.
The policy direction in the context of increasing economic added value in its implementation is constrained by the pandemic, it is important to study the constraints in implementing policies that require formulation in terms of the role of the structure, revise the substance of policies that have so far been deemed not appropriate and align with the level of legal culture of the craftsmen community who are incorporated in the forum. rural creative industry SMEs. Academic scientific forums like this are expected to facilitate creativity in encouraging innovation that creates higher added value, at the same time as creative industry products. New ideas are urgently needed to find new ways of solving problems and dealing with problems opportunities for rural creative industries, one of which can be done with innovative research the field of public policy. That in this context, responding to these problems, it is necessary to review policies in reviving the existence of rural creative industries as a form of resilience to the legal protection of MSMEs in the face of the Covid 19 Pandemic in the District.
Jurnal Magister Hukum Udayana (Udayana Master Law Journal), Vol. 11 No.2 July 2022, 297-307
ISSN: 1978-1520
Buleleng. Whereas in this context, responding to these problems, the problem that can be formulated is how the risk of economic policy formulation on the existence of rural active industries as a form of resilience in the legal protection of MSMEs. The purpose of this study is to determine the development of the rural creative industry in Buleleng Regency in its resilience to the COVID-19 pandemic, the obstacles faced by the rural creative industry in the COVID-19 pandemic situation and strategies in the form of economic policy formulation to rise to the existence of the rural creative industry. This study will also review policies in reviving the existence of rural creative industries as a form of resistance to legal protection for MSMEs in the face of the Covid 19 Pandemic in Buleleng Regency.
This is a socio-legal reasearch that examines both text and context. In this case, the study of the text is in the form of legal text that is in the form of the text of legislation combined with the study of the context that is to see the work of the law in the community 12 . The technique of collecting legal materials is done by collecting, inventorying legal materials and recording in detail related to the subject matter discussed.
The data analysis technique applied in this study is descriptive qualitative data analysis, integrating data findings in the field according to the latest developments so that it can provide an overview of the development of the socio-economic life situation of rural creative industries in the context of formulating MSME legal protection policy formulations in the Pandemic Period in Buleleng Regency.
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3. Result and Discussion
Pandemic The wealth of natural resources owned by the Indonesian nation is so large is a gift that must be grateful for and enjoyed by the whole community for the sake of achieving prosperity. In the structure of the national economy, micro-economy (MSMEs, Creative Economy, Cooperatives) has a large enough contribution to the growth and economy of Indonesia. Therefore, MSMEs have priority government to be developed in order to have a competitive ability with other similar business13.
The role of MSMEs in the form of Rural creative industries in Buleleng Regency is increasingly appropriate for the government to develop considering that currently by prioritizing the potential of regions in Indonesia, especially during the COVID-19 pandemic which paralyzes almost all aspects of life. In addition, the COVID-19
pandemic has also had an impact on all sectors of the economy, both large and small14. Given the life of the pandemic is just about four months, research on the economics of COVID-19 is at early stage and still emerging. As the evidence of economic impacts keep emerging, research think tanks and media outlets are in a race to publish commentaries, editorials, and analytical pieces The outbreak’s toll will stretch out across both micro and macro levels. For example, productions in China and some other countries have already been temporarily suspended by many large multinational companies, and transport routes through air and sea to and from China and many other economies have already been closed down, resulting in a partial or full border ‘locked down’.
Facing economic and business challenges due to the COVID-19 pandemic requires various types of approaches, including a macro approach through government policies and a micro approach through business management of rural creative industries in Buleleng Regency.15 In a macro approach through government policy, that in order to help the Rural creative industry in Buleleng Regency at this time and pave the way for a resilient recovery, the government must consider at least three important actions, namely First,16 the government must announce the sunset article of economic and business support measures. currently and progressively adopting more focused support strategies for recovery. Timing and speed are very important. Withdrawing economic and business support measures too quickly can lead to massive failures for companies and weaken competition, but on the other hand, prolonged economic and business support can result in distortions, reduce incentives to adapt and innovate, and trap resources in activities. which is not productive.17
Second, governments must ensure that corporate flows in and out are gradual and continued in a manner that supports an inclusive recovery (that is, without further burdening those most affected by the crisis, such as youth, women and migrants).18 There are opportunities to improve the status of insolvency, facilitate closure of unproductive businesses and proper business restructuring, and increase the ability of entrepreneurs to start new businesses after failure. Because bankruptcy can escalate dramatically, policy reforms should be able to limit the negative effects and reduce personal costs for honest failed entrepreneurs. 19
All of this requires the development of criteria to assess which rural creative industries in Buleleng Regency should receive support during recovery and transition to new business models. Applying traditional criteria to identify “decent” businesses – such as recent balance sheet data or credit history – may not work as well. For example, leveraging the development of Fintech and digital tools for more effective credit risk assessment, service delivery and comprehensive monitoring can help overcome the limitations of traditional approaches to business financing in times of unprecedented uncertainty. So far, the government has not utilized this instrument effectively. In addition, non-debt financing instruments should be used more to address the more diverse needs of the rural creative industry population in Buleleng Regency and strengthen their capital structure (eg equity, mezzanine financing, leasing or factoring).20
Third, government support must reach rural entrepreneurs and creative industries in Buleleng Regency who can increase economic and community resilience in the postCOVID era. Innovative start-ups, entrepreneurship and new business models should be promoted. At the same time, the rural creative industries in Buleleng Regency are largely disappearing and micro-enterprises struggling to take advantage of the digital transition must accelerate digitalization and technology adoption, organizational change and skills upgrading. Out of the crisis, the Rural creative industry in Buleleng Regency must emerge with better equipment digitally and with strengthened workforce capabilities. There are few policy initiatives aimed at increasing the longterm resilience of established businesses and the growth potential of rural creative industries in Buleleng Regency.21
The impact of the COVID-19 pandemic on the rural creative industry sector is certainly very influential on Indonesia's economic conditions where the contribution of the rural creative industry to the Indonesian economy is very large in various fields, including (1) Number of Business Units in Indonesia as of 2018 totaling 64.2 million business units with the number of rural creative industry business units of 64.1 million (99.9%) (2) Contribution to the number of workers, the number of workers in Indonesia as of 2018 totals 120.6 million people, 22 with the number of workers in rural creative industries amounting to 116.9 million (97%) (3) Contribution to GDP, Total GDP contribution of the business world in Indonesia as of 2018 totals 14,038,598 billion, with the contribution of rural creative industries to GDP of 8,573,895 billion (61.07%) ( 4) Contribution to Non-Oil and Gas Exports Indonesia's total non-oil and gas exports per
2018 totaled 2,044,490 billion, with the contribution of rural creative industries to nonoil exports of 293,840 billion (14.37%) (5) Contribution to Investment, Total investment in Indonesia as of 2018 totals 4,244,685 billion, with the contribution of rural creative industries to investment of 2,564,549 billion (60.42%)23.
One of the impacts of the COVID-19 pandemic that has hit rural creative industries is that as many as 1,785 cooperatives and 163,713 micro, small and medium enterprises have been affected by the coronavirus (Covid-19) pandemic. Most cooperatives affected by Covid-19 are engaged in daily necessities, while the rural creative industry sector is the most affected, namely food and beverages. Cooperative managers feel the decline in sales, lack of capital and hampered distribution. Meanwhile, the rural creative industry sector that was shaken during the Covid-19 pandemic, apart from food and beverage, was the creative industry and agriculture. 24
In this pandemic situation, according to KemenkopUMKM there are around 37,000 rural creative industries who report that they are very seriously affected by this pandemic,25 which is marked by around 56 percent reporting a decline in sales, 22 percent reporting problems in the financing aspect, 15 percent reporting on goods distribution problems. , and 4 percent reported difficulty getting raw materials. The results of the study stated that the pandemic had an impact on reducing the number of visits to Bali, especially in Buleleng which reached 90 percent compared to the year before this pandemic occurred. The lack of visitors resulted in a significant decrease in the income of tourist attractions and the village's original income which relies on the tourism sector and of course small industry.
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3.3 Strategy in the Form of Awakening Economic Policy Formulation towards the Existence of Rural Creative Industries as a Form of Resilience in the Legal Protection of MSMEs in Facing the Covid 19 Pandemic in Buleleng Regency
In 2019, the world economy was rocked by a crisis caused by the COVID-19 pandemic. The pandemic began to strike Indonesia on March 2, 2020. In preventing the spread of COVID19, the Government established a policy that limited community activities. Unfortunately, this policy hampered economic activity. The household spending decreased in line with restrictions on community activities. The decline in household spending certainly affected the business turnover. This condition forced business actors to reduce their employees to maintain business sustainability. However, many businesses eventually had to stop operating since they could no longer survive the slump in household demand during the COVID-19 pandemic. The Minister of Cooperatives and SMEs of Indonesia said that 47% of MSMEs had to be wound up in 2020 as a result of the COVID-19 pandemic (Bisnis.com, 2020). Although the restrictions on community activities were initially carried out in Jakarta, the impacts of
the COVID-19 pandemic were felt by all business actors in all regions in Indonesia, including in Buleleng-Bali.
Several entrepreneurs assessed how the emerging needs related to the COVID-19 business crisis could affect their business and took appropriate action, taking into account also several competitive aspects such as scenario planning, stakeholder analysis, strategy development, external and internal communications. Several indicators can be used in a company to evaluate its reactive capacity and understand the possible impact of digital change to mitigate the negative effects of the COVID-19 crisis. Once the theoretical background is clear, and once the external and internal status analysis has been carried out, the rural creative industries should reflect on their own business model. Digital transformation doesn't just mean introducing new technologies to perform existing activities: it's a process of redesigning entire business models.26
In order to support entrepreneurs' efforts in implementing new business models and digital transformation in their businesses, it is important for the government to make structural policies for the long-term interests. This policy is not only used to deal with the COVID-19 pandemic but also the Industry 4.0 era in the future. This policy includes short-term policies for the rural creative industry, namely the introduction of digital technology and training for rural creative industry actors and workers as well as longterm policies for the rural creative industry to adapt to the use of technology for the production process, the use of digital technology media to promote industrial products. rural creativity, and find potential markets for the products they produce. In the short term, there needs to be assistance for rural creative industry players to be able to take advantage of e-commerce media (online shopping) to sell their products. Data from the Central Statistics Agency shows that in 2018 only 3.79 million rural creative industries (or around 8 percent) used online platforms to market their products.11 Of course this situation could be one way out to increase the number of rural creative industries that take advantage of the online platform. Then, the short-term policy was followed by a long-term policy. The government can start by making a roadmap for developing rural creative industries in the face of the Industry 4.0 era starting from retraining rural creative industry workers to adapt to the use of new production technology and digital technology, developing telecommunications infrastructure and internet programs entering villages, the involvement of academia and big business in assisting the introduction and use of production technology and digital media, as well as reviving the partnership program for big business and rural creative industries. This structural policy is carried out to support the strengthening of MSMEs as well as support. Supporting policies must consider differences between sectors to be more relevant to their specific needs; they also need to be more transparent if they want to provide subsidies directly to private entrepreneurs, they aim to help overcome the crisis.
Rural creative industry In Buleleng Regency, in this case, is the hardest hit and affected part in this crisis, paying attention to the contribution of the creative industry to the number of business units, GDP contribution, labor absorption, exports and investment
to the Indonesian economy which is very large and significant. It is an important concern for the government to assist in restoring and revitalizing rural creative industries in Buleleng Regency with various government assistance and policies that can support MSME businesses. With the COVID-19 pandemic period where there is no certainty when this pandemic will end, MSMEs as business entities as one of the impacted by the COVID-19 pandemic that has hit rural creative industries are 1,785 cooperatives and 163,713 micro, small and medium enterprises affected by the virus pandemic. corona (Covid-19). Strategy The government's policies are divided into various short, medium and long-term strategies, including short-term and urgent, the government focuses on reducing the addition of COVID-19 fatalities with an emphasis on health sector stimulus and welfare assistance for the affected people, for mediumterm policies Among other things, ensuring that the business world operates immediately, maintaining the continuity of the logistics sector and encouraging the independence of the medical device industry is the key, while the long-term strategy is focused on the introduction and use of digital technology for the rural creative industry in Buleleng Regency as well as preparation for entering the Industry 4.0 era. Improved facilities and infrastructure as well as more mature local government planning and performance are also very much needed in the development and development of regional economies, especially in Buleleng Regency.
Acknowledgments
Thank you to the Chancellor of the Ganesha University of Education and all his staff, the chairman of the Undiksha Research and Community Service Institute (LPPM) for allowing the author to carry out research, so we would like to thank all relevant parties who have helped researchers in implementing the Tri Dharma of Higher Education. Hopefully this research can contribute to the science and development of Indonesian law.
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Law and Regulations
Minister of Health Regulation Number 9 of 2020 concerning Guidelines for Large-Scale Social Restrictions in the Context of Accelerating Handling of Corona Virus Disease 2019
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