Facing the ASEAN Economic Community (AEC) open market in 2015, the challenges faced by Indonesia, including the business community, is quite heavy. It requires a change of paradigm and perspective of small and medium businesses (SMEs). The government has a strategic role to increase competitiveness of Indonesian goods and services.
In the AEC blueprint that has been signed by all ASEAN countries, SME sector is one sector which is considered to be a driver of the economy. There are four main priorities for enhancing the role of ASEAN SMEs, starting from accelerating of the development of SMEs, strengthening of competitiveness and dynamism of ASEAN SMEs by facilitating access to information, markets, human resources and expertise, finance and technology. ASEAN SMEs also need to be helped to face macroeconomic issues, financial difficulties and challenges of trade liberalization. Contribution of SMEs to economic growth of the ASEAN region will be further enhanced.
In such circumstances, the Ministry of Cooperatives and SMEs is targeting the export share of SME products to reach 20% of the total export value in 2015 so that imported products do not flood the domestic market, especially consumer goods. Syamsuddin, Deputy Assistant for Cooperative Research of the Ministry of Cooperatives and SMEs, on Friday (April 4), said that currently export share of SME products ranges from 17% to 18% of total export value, which based on data of the National Bureau of Statistics (BPS), up to September 2013 reached USD 133.95 million. He said that most of the export-oriented SME products are handicrafts, such as foot wear, leather goods, and electronic spare parts.
In addition to crafts, Syamsuddin admitted that there are other products developed in order to meet export standards, such as food products, fruits and vegetables. These products are expected to compete with similar products from China and Thailand who had already penetrated market. Nevertheless, there are some things that need to be paid attention to in order to ensure that the delivered products can compete with similar products from other countries.
To improve business capacity, SMEs can take advantage of the Micro Business Credit (KUR) program and revolving funds channeled through the Revolving Fund Management Institution (LPDB). Syamsuddin said that the distribution conducted by LPDB has been right on target as the ratio of nonperforming loan (NPL) is below 2%. It shows use of funds for productive activities. SMEs will also be given guidance to improve the capacity and skills so that their businesses could improve.
He explained that the world export market is dominated by SMEs products. 40% of the world export market is SME products. Therefore, the potential of this sector needs to be strengthened. Of the 56 million SMEs in Indonesia, only 2,700 SMEs that become exporters. Thus, there is still an open opportunity for SMEs to compete in AEC 2015. He believes that SMEs have strengths so that they can compete with other countries. The strengths are in making design and in self-designing their products.
He also hoped that the Asia Pacific Economic Cooperation Small Medium Entrerprises Working Group (APEC-SMEWG) Meeting 2014 can produce important points to be implemented for the purposes of the real sector entrepreneurs in the respective member states. One of the agreements reached in the meeting is that is the resilience of SMEs to cope with disaster. APEC also agreed to build a business continuity plan (BCP) to facilitate SMEs in trade and investment sector. Facilitation of SMEs who are affected by disaster is although the adoption of BCP for information technology and communications industry, logistics and auto parts industry, especially to build resilience of SMEs who are victims of disaster. It was one of the agreements reached through decision-making policy through high-level talks for a better global supply chain. (E)
Business New - April 11, 2014