Jakarta, 16/9/2022 (ANTARA) - Indonesia has over
65 million micro, small, and medium enterprises (MSMEs) capable of
producing competitive products, though several of them had yet to
integrate into the digital ecosystem to promote their products
domestically and overseas.
They account for 99.9 percent of
the business population and 61.07 percent of the national gross domestic
product (GDP), or Rp8,573.9 trillion .
Eager to reduce
imports, the Indonesian government has been striving to expand the
coverage of digitalization of MSMEs, which is one of the strongest
pillars of the Indonesian economy.
The government is
targeting 30 million MSMEs to enter the digital market by 2024,
including 19.5 million MSMEs in 2022, according to Minister of
Cooperatives and SMEs Teten Masduki.
At least 19 million
MSMEs have so far succeeded in going digital and expanding their market,
while 11 million other MSMEs are lining up to adopt digitalization.
Aspiring to become the largest digital economy, with potential
reaching Rp4,500 trillion in Southeast Asia by 2030, the government has
accelerated economic digitalization transformation by involving various
relevant stakeholders.
The digitalization effort also
involves the digitization of MSMEs under various national initiatives,
such as the Proudly Made in Indonesia National Movement and the Proud
Indonesian Traveling National Movement.
Minister Masduki has
urged internet marketers to MSMEs to enter the digital ecosystem, as
many of the MSMEs are not familiar with digital technology.
To reduce imports and promote domestic products, internet marketers
could seek what the people need, such as creating technology application
to facilitate marketing, Masduki stated during the Indonesia Digital
MeetUp 2022 recently.
"I call for help for our MSMEs to enter
the online market because 50 percent of the products sold in e-commerce
are still imported products," he noted.
This is despite the
fact that many of Indonesia's domestic products are already well-made.
Hence, all MSMEs, no matter where they are from and/or how small they
are, should enter the digital ecosystem, he emphasized.
In
the meantime, the government has been supporting the development of
local brands through a policy wherein 40 percent, or around Rp400
trillion, be used for the procurement of government goods and service
from MSMEs products.
This policy opens up the opportunity for
the creation of around two million jobs or drive economic growth by 1.8
percent, according to Statistics Indonesia's (BPS') calculation.
Currently, Indonesia has a state budget of Rp2,700 trillion. If this
continues to improve, then it means that the government has more to
spend.
In fact, President Joko Widodo (Jokowi) has opened the
opportunity of government goods and service procurement spending that
should come entirely from local products.
Moreover, Jokowi
has urged that the Quick Response Code Indonesia Standard (QRIS)
services connecting payments among countries should be able to
facilitate MSMEs and tourism actors.
"I have urged Bank
Indonesia (BI) to connect QRIS across countries as an effort to
facilitate MSMEs and our tourism sector," he stated at the launch of
Domestic Government Credit Cards and International QRIS last August.
The launch marked the cooperation between Indonesia and several ASEAN
countries to link their payment systems. As of Monday, the intercountry
QRIS tested with Thailand has begun to be fully implemented.
On the same occasion, BI Governor Perry Warjiyo explained that Indonesia
had received commitments from four ASEAN countries -- Thailand,
Malaysia, Singapore, and the Philippines -- to integrate their QR Code
payment systems.
"We will connect QR, fast payment, and
currencies. Today, we start with full implementation with Thailand. We
have tested QR Indonesia with QR Thailand. MSMEs and tourism
transactions can connect to the QR," he explained.
In
addition, application of the QR payment system linkage has been piloted
with Malaysia since January 2022, while the agreement with Singapore is
being finalized, Warjiyo noted.
"In the near future, the five
countries will be able to digitize payment systems, cross-border, QR,
and fast payments with local currency payments, which also support
tourism, MSMEs, and the digital financial economy nationally," he added.
According to data from BI, the value of QRIS transactions in one year
was able to grow 305.49 percent to Rp4.52 trillion in February 2022.
The QRIS transaction volume also grew 268.64 percent (year on year) to 54.91 million in February 2022.
This growth is in line with the trend in the adoption of non-cash payments that continue to be strengthened among merchants.
The COVID-19 pandemic situation is also believed to have accelerated the adoption of the digital payment technology.
In the meantime, entrepreneurship deputy at the Ministry of
Cooperatives and SMEs Siti Azizah called for a strategy for accelerating
the digital transformation of MSMEs.
The digital
transformation of MSMEs in Indonesia is still lagging behind as compared
to several other countries in Asia, she noted at the 6th Annual Islamic
Finance Conference recently.
This is evident from the fact
that digital transformation of Indonesian MSMEs only reached 13 percent
in 2020, and it is targeted to reach 47 percent in 2024.
In
China and Japan, it reached 48 percent and 54 percent, respectively, in
2020, and could potentially rise to 78 percent and 84 percent,
respectively, in 2024.
"We are still far lower as compared to these countries," she stated.
Hence, she believed that a strategy for accelerating MSME digital
transformation is necessary from various aspects, including market
access, production quality monitoring, finance and financing,
organization management, production capacity, supply, distribution, and
logistics.
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