vitality of village umkm in the arena of asean economic community (aec)

Abstract

A horizon of expectation seems to be much brighter when the regional cooperation among the Southeast Asian countries intensify due to their meeting commitment of integration. The culmination of the regional cooperation commitment in Southeast Asia is an agreement to become a solid community within the framework of the Asean Community. One aim of the Asean Community is to form a joint economic community among the countries in Southeast Asia, commonly known as the Asean Economic Community (AEC). AEC opens space for the flow of goods and services from ASEAN member countries freely, including items that have been developed by Usaha Mikro Kecil dan Menengah (UMKM) – Micro Small and Medium Enterprises. In Indonesia, especially in Malang, UMKM provide the foundation of the regional economic development. The implementation of AEC will slowly and surely give implications to UMKM and regional economy, more specifically the areas with less attention preparing for UMKM to face the Southeast Asian regional free market. It is an early gate to determine whether the position of this proved-to-be-resilient economic actors (read: UMKM) will be involved or will be squashed to be a spectator when the other countries of the region make Indonesia as a new trading arena. This research will conduct a preliminary assessment towards the local government’s innovation in facing the implementation of AEC, primarily that relates to organizing UMKM at the local/village level. The purpose of this study is to gain an understanding in greater detail in accordance with the local government's response and strategies in Malang Raya to prepare village UMKM in dealing with the implementation of AEC. The study also attempts to find the initial design of strengthening the village UMKM that is adaptive to current regional and global trade liberalization. Field research will be conducted in Malang Regencies, Malang City, and Batu City, where all these areas have village UMKM that are enough to contribute to the local economy.