Legal Framework for Development of Micro, Small and Medium Enterprises by Local Governments as an Effort for Economic Recovery

Abstract

—The existence of Micro, Small, and Medium Enterprises has a strategic role in advancing the national economy. This can be seen from the contribution of MSMEs in absorbing a very large workforce. MSMEs are believed to be the leading sector in the economy in Indonesia and become an integral part of the people's economy. This study aims to analyze the legal framework that local governments can do in developing MSMEs as one of the current economic recovery efforts. The Covid-19 pandemic, which has had a major impact on the economy, requires the government, including regional governments, to issue various policies in the context of accelerating economic recovery. This study uses a normative legal research method with a statutory and conceptual approach. The results of this study indicate that: the issuance of Law Number 11 of 2020 concerning Job Creation as a form of legal policy by the central government, has legal implications that become a way for local governments to determine the direction of legal policy for the development of MSMEs. The legal framework for developing MSMEs by local governments is through the establishment of Regional Regulations on the Ease, Protection, and Empowerment of Micro, Small, and Medium Enterprises. This regional regulation becomes the legal framework for local governments to optimize the development of MSMEs based on regional authority. The formation of these regional regulations is a legal requirement in response to legal developments that have changed with the issuance of Government Regulation Number 7 of 2021 as a derivative rule of Law Number 11 of 2020 concerning Job Creation.