Indonesia Bars State Companies from Tenders Below $1m to Aid Small Business

JAKARTA, KOMPAS.com – Indonesia’s Minister of State-Owned Enterprises Erick Thohir has prohibited state companies from participating in any tender below 15 billion rupiahs ($1 million) to clear the way for micro, small and medium enterprises (MSME).

This initiative aims to support the MSMEs' role in boosting the national economy.

“We have issued a regulation prohibiting state-owned companies from participating in the tenders between 250 million rupiahs ($17,000) and 15 billion rupiahs,” said Erick in a virtual launch ceremony for an MSME website and applications on August 17.

“This is to create a healthy business environment for the MSMEs,” he added.

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The minister said in the effort to support the MSMEs that have also been affected by the Covid-19 pandemic, his office and the Ministry of Cooperatives and Small-Medium Enterprises will collaborate with SMESCO, a government institution that provides training services for the SMEs, and state-owned department store Sarinah. He said that the MSMEs will be trained in SMESCO and they can sell their products at Sarinah.

Erick has also launched a digital marketplace known as PaDi to increase the state companies' spending on MSMEs. To start with, this initiative will see the participation of nine state companies — Telkom, Pertamina, Pupuk Indonesia, Waskita Karya, Wijaya Karya, PP, BRI, Pegadaian, and Permodalan Nasional Madani (PNM).

The spending on MSMEs will boost their chances of making it through the pandemic, which in turn should help the economy to recover faster.

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“I want to start with the nine state companies and we will see how it goes in the next two or three months. We will carry out an evaluation,” he said, adding that if the results turn out well, then the program will involve other state-owned companies.

The government has taken initiatives to continue all national strategic projects so that the economic sector will survive amid the pandemic, he said.

“We are still running strategic projects involving state companies as part of the government efforts to stabilize the declining economy,” he said.

(Writer: Yohana Artha Uly | Editor: Bambang P. Jatmiko)

Source: https://money.kompas.com/read/2020/08/17/182800626/erick-thohir-larang-bumn-ikut-tender-proyek-di-bawah-rp-15-miliar.