REPUBLIKA.CO.ID, JAKARTA -- The cooperation between the government and businesses will encourage the development of micro, small, and medium enterprises (MSMEs), according to Finance Minister Sri Mulyani.
"The cooperation will contribute to economic growth. We must encourage cooperation among state leaders, policymakers, and the entrepreneurs from the MSME sector. We hope the current decentralization will support the MSMEs and boost economic growth," Sri Mulyani stated in her speech at the World Islamic Economic Forum (WIEF) here on Tuesday.
MSMEs are the backbone of the national economy. MSMEs constitute some 99 percent of the businesses in Indonesia, with more than 98 percent dominated by microenterprises. The MSMEs employ more than 107.6 million people in Indonesia and contribute 60.6 percent to Indonesia's gross domestic product.
With the development of MSMEs, more people could contribute to economic growth, which will help to strengthen the domestic economy.
"MSMEs can remain strong during economic crisis," the minister remarked.
The Indonesian government has issued policies to stimulate economic growth, one of which is to facilitate the issuance of registration permits for MSMEs.
Another policy was the revision of the Negative Investment List that opened 19 sub-sectors allocated for SMEs and cooperatives. In addition, 62 other business sectors can be accessed by foreign investors if they cooperate with MSMEs.
The 12th WIEF is expected to boost the development of MSMEs in Indonesia.
"We consider that businesses driven by the community should be backed by technological innovations to reduce the financing costs. WIEF can be an evidence of the inception of a new idea, and it can be the right concept to attract investors," the minister pointed out.
Chairman of the WIEF Tun Musa Hitam had earlier stated that MSMEs in Indonesia had the greatest potential to be developed into future businesses.
"Some 60 million MSMEs are the backbone of the national economy. The MSMEs have contributed significantly to the gross domestic product. There is a need to discover businesses and technologies focused on MSMEs," Musa affirmed.
With the current global economic conditions, Musa believes that the development of businesses should be supported by innovations in the field of information technology.
"In implementing the government's growth strategy, the head of state tends to focus on developing the big cities that facilitate the flow of investments. As a result, the local people tend to migrate from their villages to big cities. The infrastructure in villages is lagging behind," Musa remarked.
He stated that MSMEs can help encourage decentralized growth wherein more parties will become involved in economic development.
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