TOWARD AEC 2015 GOVERNMENT WAS ASKED TO GUIDE SMALL BUSINESS

Toward Asean Economic Community [AEC] 2015, the challenges faced by Indonesia was not easy, including the business sector. For that matter change of paradigm and mindset of UMKM players would be necessary. The Government was playing strategic role in upgrading competitiveness of Indonesian goods and services.

In AEC blueprint which was signed by all Asean countries, it was stated that small business [UKM] was one factor which was regarded as economic propeller factor. There were 4 main priorities for promoting the role of ASEAN small business. Starting  from accelerating UKM development, strengthening competitiveness of ASEAN UKM by facilitating information access, market access, human resources competence, finance and technology. ASEAN UKM also needed assistance in facing macro economic problems, financial difficulties or challenges in trade liberalization. UKM contribution for economic growth in the region was to be enhanced.

Franky Sibarani, Secretary General of the Association of Indonesian Food and Beverages Producers [GAPMMI] in Jakarta on Tuesday [11/2] stated that in facing AEC 2015 players of the F&B industry of middle and upper level were stating their readiness. However, the small industry was far from being ready. For that matter, the Government was asked to set up a roadmap whereby to render counseling. By the time AEC was effective in December 2015, goods and services would be free to move in and out. Inter Asean trading was estimated to constituted 25% of all.

In Indonesia, around 90% of food & beverages industry belonged to the small-and-medium business category, but the production output contributed only 15%. Based on data of the Food and Drug Control Broad [BPOM], of 10,000 UMKM who were subject to survey for anticipating AEC, only 600had their data recorded. “Of that number, 400 were very ready to face AEC, 173 were ready, and the rest needed guidance.” Franky remarked.

The Government also had to run census of UKM ad UMKM. Franky said that the census was run last in 2008. Thereafter the Government had no run any census. Some factors that made small business hard to face AEC was unclear roadmap, low human resource quality, limited market access, increasing labor cost, and low access to capital.

Gapmani recommended to foster inter-ministrial coordination to agree on roadmap of reference for UMKM development, to integrate UKM centers in the regions toward one national objective, to ease business permit application, subsidize raw material, to obtain per sector priority and to actively publicize knowledge to UMKM.

Meanwhile the Ministry of Cooperative and UKM set target for export for small-and-medium business could reach 20% of total export value of 2015 to keep imported products, especially consumer goods, from invading the domestic market. Deputy Assistant of Ministrial Cooperatives Research Syamsuddin said today UMKM products were export oriented and were handicraft goods like footwear, leather were and electronics spareparts.

Beside handicraft goods, Syamsuddin claimed there were other products being developed to meet export standard like food, fruits, and vegetables. He further remarked that this product was designed to compete against same product of China and Thailand which had penetrated the market sooner. However, there were some things to be observed to make sure that the product could compete against same products of other countries. (SS)

Business News - February 14, 2014