Making MSMEs the New Backbone of National Economy During Pandemic

TEMPO.CO, Jakarta - The micro, small, and medium enterprises (MSMEs) sector has borne the maximum brunt of the coronavirus disease (COVID-19) pandemic.

Several MSMEs have lost their source of income and been unable to pay installments, while numerous others have been compelled to shut down in the wake of reduced income owing to the pandemic.

MSME players have been urged to adapt their businesses to the new normal scenario and focus on product innovation in order to survive the crisis arising from the COVID-19 pandemic.

Special Staff to the Minister of Cooperatives and SMEs, Fiki Satari, opined that for surviving during such challenging times, MSMEs should essentially focus on adapting their businesses to the new normal and delve into product innovation to better cater to market demand.

Satari affirmed that the government’s support for MSMEs during this difficult time is enmeshed with endeavors to expedite digital transformation of MSMEs to help them survive and conduct business activities in addition to competing in the market.

Meanwhile, Midtrans CEO Erwin Tanudjaja expounded that digital platforms have currently become a necessity for MSMEs to sell products.

“We are fully aware that in this current situation, facilitating the transition and adaptation of hundreds of MSMEs in Indonesia to the online realm through digitalization efforts has become a priority,” Tanudjaja stated.

Furthermore, CEO and co-founder, Moka Haryanto Tanjo, believes that digital transformation will assist MSMEs to tide through this tough time.

"Not only in terms of online sales, but digital-based operational management solutions are also important to be applied in business," Tanjo remarked.

Through the utilization of a digital system in business operations, MSME players are expected to become more responsive in analyzing sales and making crucial business decisions, he stated.

Furthermore, Bank Indonesia (BI) Governor Perry Warjiyo has reiterated five strategic measures to strengthen MSMEs and make them the new backbone of the national economy.

The first measure calls for synergy between government ministries and agencies to establish MSMEs as a source of economic recovery in the digital era, according to a statement issued by BI in Jakarta on Thursday.

Secondly, MSME transformation, as we enter the digital era, must be facilitated through structured and systematic government programs.

Third, end-to-end MSME development programs are the need of the hour, including broader acceptance of Quick Response Code Indonesia Standard (QRIS) as a digital payment channel for MSMEs, as well as interoperability and interconnectivity between e-commerce platforms to facilitate MSME product patents.

Fourth, creativity should be strengthened to add value to MSME products along with launching campaigns promoting the use of MSME products.

And fifth, affirmative policies are necessary to boost demand for SME products in Indonesia, including government budget absorption or utilization, as well as support for Gernas BBI (Made in Indonesia National Movement).

BI, as manager of the Made in Indonesia National Movement, September 1-15, 2020, which targets promotion of Indonesian arts and creative markets, will implement several programs.

They encompass installing and using QRIS at Indonesian arts, creative markets through 46 domestic representative offices; hosting onboarding webinars for MSMEs under the mentorship of BI as well as government ministries and agencies in three regions of Java, Sumatra, and Eastern Indonesia; running SME product campaigns at the virtual Karya Kreatif Indonesia (KKI) exhibition 2020; organizing the Nusantara Fabrics Fashion Parade using MSME products; and campaigning to support stimulus programs for MSMEs.

BI has invited members of the public to visit the virtual KKI 2020 exhibition through the KKI website (www.karyakreatifindonesia.co.id).

BI will continue to provide an electronic catalogue also made available through the KKI website.

Moving forward, BI echoed its unwavering commitment to developing MSMEs as the backbone of the regional and national economies while synergizing with various government ministries and agencies.

Synergy among MSMEs

President Joko Widodo (Jokowi) has sought synergy among MSMEs and higher education institutions and industries during industrial estate development for leapfrogging.

"I call on all parties related to the industry and MSMEs and higher education institutions to capitalize on the momentum offered by industrial estate development," Jokowi stated.

To this end, the president called for continually developing innovation and cooperation models.

Each party must be open to change and to find new ways and models of cooperation that are mutually beneficial and offer optimal added value for our national economy, he stated.

The government is working hard to build industrial estates, with the most significant being the industrial area along the northern super corridor of Java Island, Jokowi stated.

This area has been supported by good logistics and air connectivity, well-connected land and sea toll roads, proximity to airports and seaports, and abundant electricity in Java, he remarked.

The president ensured that industries in regions will be encouraged to cooperate with educational institutions, especially those offering vocational education.

Moreover, the government has encouraged them to collaborate with MSMEs to build synergy for boosting national strength.

Read also: Over 300,000 MSMEs Go Digital amid COVID-19 Pandemic

ANTARA