Investment Minister Emphasizes MSMEs' Significance in Economic Crisis

11 August 2022 17:02 WIB

TEMPO.CO, Jakarta - Investments Minister Bahlil Lahadalia in an event on Thursday acknowledged the significant role of MSMEs or micro, small, and medium enterprises in boosting the national economy during an economic crisis, which he believes have exceeds the role of major corporations. 

“The one that has become the national economy’s defense fortress are you, ladies and gentlemen, the MSMEs,” said the minister in front of an audience made up of micro business people in Banyuwangi, on August 11. “It is MSMEs.”

At that time, Indonesia's economic deficit was 13 percent, inflation soared to 88 percent, and foreign exchange reserves were only US$17 billion.

He recalled the country’s 1998 economic crisis where Indonesia recorded a 13 percent deficit, inflation blew to 88 percent, and the foreign exchange reserves were only US$17 billion. Meanwhile, major corporations either fled the country or filed for bankruptcy during the critical economic moment, he explained. 

A similar situation reoccured during the heat of the Covid-19 pandemic, which nearly collapsed major corporations. However, he said that MSMEs played a significant role in giving rise to the national economy.

Additionally, he said the government is not fully present in taking care of MSMEs. In fact, MSMEs dominate around 99.3 percent businesses in Indonesia. Meanwhile, according to data from the Central Statistics Agency, the number reached 64 million. 

Bahlil Lahadalia explained that 120 million of the 131 million jobs in Indonesia are contributed by MSMEs, which mark 61 percent of Indonesia’s gross domestic product (GDP).

"But, you know what? The credit that goes down to the community for MSMEs is no more than 19 percent, that's our injustice for MSMEs," said the Investment Minister.

"This goal is what we will push for all ladies and gentlemen to be able to access banking finance to help with the working capital in order to attract MSMEs to become strong and great entrepreneurs in the future," he asserted. 

HENDARTYO HANGGI

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