Here Are 4 Government Steps To Strengthen Domestic Products

Minister of Cooperatives and SMEs (Menkop UKM) Teten Masduki said, there are four government policies in the economic sector aimed at protecting domestic business actors and strengthening the competitiveness of local products, including import substitution policies, downstreaming natural resources, digital transformation, and ease of financing for MSMEs.

This was stated by Minister Teten at the National Working Meeting (Rakernas) 2 of the Indonesian Women Entrepreneurs Association (Iwapi) at the Indonesia Convention Exhibition (ICE) BSD Tangerang, Banten, on Tuesday, October 24.

"These policies must be followed up and followed up by business actors and business associations, including Iwapi," Minister Teten said in a written statement, quoted Wednesday, October 25.

Minister Teten said, in the import substitution policy, if Indonesia can produce a domestic demand product, it will no longer need to import.

"In fact, the president has confirmed 40 percent of APBN spending to buy domestic products from MSMEs," he said.

For this reason, Teten asked Iwapi to follow up on the policy through the LKPP, the Ministry of Trade, and the Ministry of Investment.

"Currently, investment can be made to cooperate with domestic business actors," said Teten.

In addition, he said, if foreign investors invest in Indonesia to build factories, the product must have 40 percent of the domestic content level (TKDN).

"Essentially, it must be produced domestically and partner with local actors. Here, we encourage MSME players to enter the industrial supply chain," he said.

Regarding downstreaming and industrializing local commodity-based natural resources, Teten emphasized that the policy is not only for big business actors but also for domestic MSME actors.

"This policy also prohibits exports of raw mining products, which must be processed domestically in order to increase added value and quality of employment," said Teten.

Meanwhile, for the MSME financing access policy, Teten emphasized that it must be even better.

Because, currently, the portion of bank credit for MSMEs is only 21 percent, far behind compared to Thailand and Malaysia which are already above 40 percent. In fact, in South Korea it is already more than 80 percent.

"We have discussed MSME loans no longer referring to asset collateral, but credit scoring," he concluded.