THE GOVERNMENT WAS ASKED TO STRENGTHEN THE ROLE OF MICRO, SMALL AND MEDIUM ENTERPRISES (MSMES)

In Indonesia’s economic development, micro, small and medium enterprises (MSMEs) is always described as having an important role, since most of the population are low-educated and earn a living from small business activities, both in traditional and modern sectors. However, development has been carried out, but the results are not yet satisfactory because the progress of MSMEs is very small compared to the progress achieved by large enterprises.

With the policies and greater support, such as licensing, technology, structure, management, training and financing, MSMEs are expected to grow rapidly. The development of MSMEs is expected to compete healthy with the big market in the midst of the free market which is happening now. Moreover, MSMEs are expected to increase incomes, employment opportunities, and improve the prosperity of the society as a whole for the creation of competitiveness (competitiveness) and stability of the Indonesia economy.

To that end, the Indonesian Chamber of Comerce and Industry (Kadin Indonesia) asked the government to strengthen the presence of MSMEs in order to prevent an economic crisis in the future. “we ask the government to focus more on strengthening of MSMEs, as this sector has proven to survive in the midst of crisis”, said the Chairman of Kadin Indonesia, Suryo Bambang Sulisto, in Jakarta, Wednesday (November 6).

Suryo remained of the importance of the role of MSMEs in strengthening economic structure as proven by the growing concern of advanced countries on MSMEs in the respective countries. According to him, the role of cooperatives that have been identical to a social instrument should be transformed into a business entity. Therefore, cooperative will be able to operate optimally support the strengthening of MSMEs. Strengthening of MSMEs is one of the recommendations of the meeting result of Kadin Indonesia. In addition, Kadin Indonesia recommended measures for handling logistical problems, sufficiency of energy supply, development of downstream industry, up to infrastructure development.

Meanwhile, related to funding issues, Kadin Indonesia last weekend launched Palapa Fund program. Kadin Indonesia established Palapa Nusantara Berdikari financing institutions to provide working capital loans to MSMEs in South Sumatra. He said that in the midst of declining economic dynamics, such as the current account deficit, trade balance deficit, up to the weakening of the Rupiah, MSME sector in the region could become a mainstay of the national economic backbone.

Suryo reminded that when financial crisis that hit this country in mid-1997, it has a lot of influence on the economic system in Indonesia, both in the capital city and the regions. Especially, with the riots and demonstrations by the students. As a result of the incident, the economic condition in Indonesia is getting worse. The empowerment of MSMEs is expected to emphasize a more rapid progress with the community as the main actors is development.

He is optimistic that the MSME sector will be able to survive in the face of a crisis such as in 1997 and 2008. This is proven from the contribution of small and medium enterprises to the GDP growth last year, which reached 57.5%. Citing data from the Ministry of SMEs and Cooperatives, now there were 56.5 million units of MSMEs. Of that figure, 97% of the total agricultural labor force is absorbed, which reaches 107 million people. He also support the government’s efforts to help resolve MSMEs capital problems through small loans program. This year, the target of distribution of small loans is at Rp36 trillion. 

Business News - November 8, 2013