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Luhut Panjaitan: Indonesian SMEs are the Backbone of National Economy

June 28, 2020, 11.17 PM

JAKARTA, – Give Indonesian SMEs the attention they deserve for they are the backbone of the national economy, said Coordinating Minister of Economic Affairs and Investment Luhut Panjaitan.

This as the Minister admitted that the Indonesian government for the most part sees the upper-class and large-scale corporations as the key drivers of the economy.

Read also: Bali Strives to Diversify Its Economy and Rely Less on Tourism

“We must all show our alignment to SMEs which are the backbone of the national economy. We always look at the rich people and the large-scale corporations,” Luhut said during the launch of a national movement to support SMEs, led by the National Public Procurement Agency on June 26.

More than 40 million Indonesian SMEs have over 66 million bank accounts. For Luhut, the figure is a significant advantage to strengthen the national economy.

“Small-scale business owners make up 44 percent of the total. Micro-scale businesses comprise 56 percent of the total. These are not small numbers.

"Remember, 75 percent or more of our economy is driven by domestic consumption,” said Luhut.

Read also: Indonesian Government Eyes Economic Rebound in 2023

“A lot of people do not realize or lack awareness that what we have today is truly something special. What we’re doing is associating the movement with small businesses,” said Luhut in describing the national movement.

The Indonesian government has prepared government procurement packages valued at Rp 725 trillion for small businesses in 2020.

Of that total, Rp 318 trillion will potentially be given to Indonesian SMEs.

Public and Private Sector Assistance

Indonesian Minister of Tourism and Creative Economy Wishnutama is harnessing the power of technology and the digital economy to assist Indonesian SMEs.

The coronavirus pandemic has severely impacted SMEs as the national economy was forced to come to a halt and various regions enforced large-scale social restrictions.

Indonesia’s tourism ministry launched its #BeliKreatifLokal (#BuyLocalCreativeProducts) campaign as part of a partnership with Blue Bird, Bukalapak, Tokopedia, Shopee, Grab, and KontrakHukum.

Read also: Ministry of Tourism’s #BeliKreatifLokal Campaign to Support SMEs

Gojek and Blibli are also partners of the program.

The partnership aims to position Indonesian SMEs’ products online and expand their product sales channels.

Although Gojek announced layoffs and the shutdown of its GoLife services, the tech giant remains dedicated to empowering Southeast Asian SMEs.

Through its renewed business plan, Gojek seeks to widen its payment services network by including more SMEs.

Read also: Facebook, PayPal Join Indonesian Giant Gojek's Growing List of Investors

The recent addition of PayPal and Facebook as Gojek’s investors further strives to empower Southeast Asian SMEs through the provision of online payment and banking services.

Currently, many Southeast Asian SMEs, including those in Indonesia, do not have access to banking services.  

(Writer: Ade Miranti Karunia | Editor: Bambang P. Jatmiko) 


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