WEBSERIE 2: SMEs and Ways to Economic Recovery
Small and Medium Enterprises are the spearhead of the national economy. The contribution of SMEs to Indonesia’s GDP continues to increase to around 60% in the pre-pandemic period. The absorption of labor by SMEs is also very high and continues to grow, reaching 96.99 – 97.22% with the number of SMEs reaching 62 million or around 98% of national business actors.
Since the beginning of the pandemic, the government has placed SMEs as the top priority of beneficiaries in national economic recovery. Minister of Finance, Sri Mulyani Indrawati stated, “SME actors, your rise is the revival of my country’s economy!” SMEs are indeed the sector that has been hardest hit by the impact of the Covid-19 pandemic. Based on a survey of 202 bakers, biscuits, cakes, snacks, noodles, pancakes and pastries in Surabaya and Jakarta, it was showed that around 94% were affected by Covid-19.
In the IBCSD webseries for economic pillars that focus on MSMEs, and entitled “SMEs and Ways to Economic Recovery”, Minister of Cooperatives and SMEs Teten Masduki in his keynote speech represented by special staff of the Minister for Creative Economy, Fiki Satari, stated that there were 123.46 trillion funds prepared for SMEs in the National Economic Recovery (PEN) program. As of July 30, 2020, 22.57% of these funds or Rp 27.86 trillion had been absorbed.
The important role of SMEs in the national economy reflects the important role of SMEs in achieving the Sustainable Development Goals (SDGs) in Indonesia. MSMEs can be at the forefront of achieving the economic pillars of the SDGs by creating jobs, creating decent working conditions, business innovation, adapting and mitigating negative economic, social and environmental impacts on business operations for inclusive and sustainable economic growth.
Collective action from various sectors is urgently needed to support the revival of MSMEs which have been badly hit by the impact of the Covid-19 pandemic. In this case, the business sector can be a motor for economic growth and job opening. The business sector has the ability to find solutions through technology, innovation and investment. The business sector can also play a role in addressing negative environmental and social impacts through the value chains and supply chains of their business operations. Until now, the business sector has also taken part in developing SMEs for the achievement of SDGs.
“For example, one of our members, the APRIL Group, empowers local communities to improve community welfare through training in sustainable and modern agricultural skills for village farmers in the One Village One Commodity (OVOC) program”, said Sihol Aritonang, Chairman of IBCSD. It is known, APRIL Group works with village communities to select suitable products to specialize in their area, then provides training on modern agricultural methods.
Other example, PT HM Sampoerna Tbk has built a 27 hectare entrepreneurship training center called the ‘Sampoerna Entrepreneurship Training Center’ (SETC) located in Pandaan, East Java. SETC is open to the general public as well as SME’s actors and provides support in the form of free training, access to markets and the use of technology. Since its establishment in 2007, SETC has trained more than 65,000 people and has been visited by more than 110,000 people. Other than thet, PT L’Oreal Indonesia also helps the fostered salons to get back into business in the midst of this new normal.
Present as a speaker at this webinar, Ir. Ahmad Dading Gunadi, MA, Director of Small, Medium Enterprises and Cooperatives, BAPPENAS; Melanie Masriel, Communications, Public Affairs and Sustainability Director, PT L’Oréal; and Arga Prihatmoko, Manager of Regional Engagement & Sustainability, PT HM Sampoerna. In addition, MSME actors were also presented as responders.
Watch the recorded webinar here: Youtube.com/WEBSERIE 2: SMEs and Ways to Economic Recovery