MSMEs in Agriculture, Digital Technologies Contribute Greatly to Indonesia Economy

JAKARTA, KOMPAS.com – Micro, small and medium enterprises (MSMEs) in the agricultural sector and digital ecosystem have significantly contributed to the economic growth during the Covid-19 pandemic in Indonesia, a minister said.

“During the pandemic, MSMEs in the agricultural sector and those MSMEs that embrace digital technologies have contributed significantly,” Cooperatives and Small and Medium Enterprises Minister Teten Masduki said during a virtual discussion organized by Tempo on Wednesday, August 18.

“As we know that the agricultural sector has grown above 12 percent this year,” Teten added.

The minister said that those MSMEs that make use of the digital platform ecosystem play an important role in economic growth. “The digital transactions especially in the food and beverage sector and home care services support the economic growth,” he said.

Also read: How MSMEs in Indonesia Are Surviving during Covid-19 Pandemic

The number of MSMEs entering digital platforms had reached 24 percent during the pandemic. This figure is higher compared to a pre-pandemic level where only eight million or about 13 percent of MSMEs embracing digital technologies.

“If we look at it, indeed there are MSMEs out there that have the ability to adapt to the current market,” he said.

He explained that last year, there were 14,000 MSMEs that exported their products amid the pandemic.

Also read: Indonesia to Disburse $27.6 Million Stimulus Payments for MSMEs April 20, Says Senior Minister

The revenues of MSMEs that produce food items, herbal products, frozen food, and pharmaceutical continue to increase, he said.

It was previously reported that the MSMEs have contributed 8,573.9 trillion rupiahs ($597 billion) or 61.07 percent to the gross domestic product (GDP), higher than large businesses which stood at 5,464.7 trillion ($382 billion).

Amid waves of layoffs, the MSME sector absorbed 117 million workers or 97 percent of the total workforce in the country.

To cope with the Covid-19 challenges, the Ministry of Cooperatives and Small and Medium Enterprises encouraged Indonesian MSMEs to embrace the digital ecosystem by promoting their products via e-commerce platforms.

(Writer: Elsa Catriana | Editor: Bambang P. Jatmiko)

Source: https://money.kompas.com/read/2021/08/18/162023126/menurut-menkop-2-kelompok-umkm-ini-berkontribusi-besar-ke-pertumbuhan-ekonomi