INDONESIA STRIVES TO EXPAND COVERAGE OF DIGITALIZATION OF MSMES by Fardah

 

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.

MSME digitization necessary to support Indonesia's economic recovery by Fardah

 Jakarta, June 3, 2021 (ANTARA) - Indonesia’s 64.2 million micro, small, and medium scale enterprises (MSMEs) have contributed Rp8,573.89 trillion, or 61.07 percent, to its GDP (gross domestic product) as of March, 2021, as per data from the Cooperatives and Small Medium Enterprises (SMEs) Ministry.

MSMEs absorb 97 percent of the national work force, account for 60.4 percent of the total investment, and contribute 14.37 percent to export growth, data has shown.

Given their contribution, Coordinating Minister for Economic Affairs, Airlangga Hartarto, has called MSMEs critical pillars of the Indonesian economy.

National Development Planning Minister/National Development Planning Agency (Bappenas) head Suharso Monoarfa, however, wants MSMEs to play a broader role in boosting Indonesia’s economy.

"Some 99 percent of the businesses in Indonesia are dominated by MSMEs, which absorb 97 percent of the total number of workers, but MSMEs only contribute 57 percent to the national GDP," Monoarfa stated on May 26, 2021.

Despite various MSME development programs being conducted by ministries and state institutions, the results have yet to be optimal, he observed.

The minister drew attention to an evaluation of MSME programs from January, 2020 that pointed to moral hazards existing in the capital grants offered by ministries and state institutions to MSMEs.

"This is since it (a grant) does not have to be returned and utilized for non-business related purposes," he explained.

The National Development Planning Ministry/Bappenas, the Ministry of Finance, the SME and Cooperatives Ministry, and other concerned ministries and institutions will evaluate MSME development programs as a basis for budget allocation in 2022, he said.

He suggested that the role of the SME and Cooperatives Ministry, as the coordinator of the MSME development programs, be bolstered. Companies partnering with MSMEs should receive incentives, he added.

 Indeed, a great number of MSMEs in Indonesia are still facing several challenges.

A digital prescription for MSMEs amid COVID-19 by Fardah

Jakarta (ANTARA) , July 2, 2020 - Micro, small, and medium-sized enterprises (MSMEs), the backbone of the Indonesian economy, have been particularly vulnerable to the economic impact of the coronavirus pandemic owing to transport, and supply and demand chain disruptions, and restrictions on movement of people. 

To help them survive amid the near economic collapse caused by the pandemic, the Indonesian government has announced a major economic stimulus package for MSMEs.    

According to Teten Masduki, Minister of Cooperatives and Small and Medium-scale Enterprises (SMEs), as much as Rp735 trillion of funding has been allocated for MSME revival.

"We are optimistic that if the Rp735 trillion is channeled for the MSME (revival) budget, the economy can be reactivated," the minister said.

The government, institutions, and state-owned enterprises budget for MSMEs is expected to help boost the national economy. 

"We have to maintain (MSMEs) as our market is rather significant with 250 million people (being served by such businesses). If there is commitment among the people to buy from MSMEs, it will increase the demand for (products made by) MSMEs, he said.

The ministry has granted relaxations on MSME loans through installment delays, credit subsidy, tax amnesty, and provisions for new, more affordable capital for MSMEs to ensure their productivity is maintained. 

At present, the Cooperatives and SME Ministry is preparing a digital catalog and a page specifically for MSMEs with the help of the Government Institution for Provisions of Goods and Services (LKPP).

Indonesia had 64.1 million MSME businesses, as of the first half of 2019. Of the total figure, 63.3 million, or 98.6 percent, are microbusinesses. Of the total MSMEs, only about 13 percent, or 8.3 million, have capitalized on digitalization to conduct their businesses.

COVID-19 deals crushing blow to MSMEs by Fardah

Jakarta, April 25, 2020 - The novel coronavirus disease (COVID-19) has not just attacked people, but also indirectly battered the Indonesian economy, leaving micro-, small-, and medium-scale enterprises (MSMEs), the country’s economic backbone, struggling for survival.

Prior to the COVID-19 outbreak, MSMEs contributed 60 percent of the gross domestic product (GDP) and employed around 97 percent of Indonesia’s workforce.

Based on the data from the Industry Ministry, a total of 43,016 small- and medium-scale enterprises (SMEs) have been impacted by the COVID-19 pandemic.

Employing at least 149,858 workers, the SMEs are located in various provinces, including South Kalimantan, South Sulawesi, Central Sulawesi, Maluku, West Java, East Java, Lampung, and Banten.

Few MSMEs have been quick to reorient their businesses to meet the demand for equipment, such as face masks and personal protective equipment (PPE), in the fight against COVID-19.

Villagers in Ogan Komering Ilir District (OKI) of South Sumatra Province, for instance, have shifted from weaving mats to producing cloth masks, which are in high demand as the authorities have ordered people to wear masks in wake of the outbreak.

"Since President Joko Widodo mandated the use of masks for anyone who goes (out) or is active outside of the home, the Menang Raya Village community has produced 8,000 pieces of cloth masks,” Suparedy, chief of Menang Raya Village, said recently.