Coordinating Minister Airlangga: Government Encourages MSMEs To Increase Competitiveness So They Can Enter The Global Market

JAKARTA - The Coordinating Minister for Economic Affairs said that the government continues to encourage MSMEs to increase competitiveness in order to penetrate the global market because MSME's export capability is still 15.65 percent of total exports.

"We all have to help each other to be able to improve the ability of MSMEs in terms of exports and use of the digital market," said Coordinating Minister Airlangga in an official statement quoted from Antara, Friday, October 29.

Coordinating Minister Airlangga said the government continues to strive to improve the competitiveness of MSMEs through the support of fiscal and non-fiscal incentives, the provision of facilities such as showrooms, design development activities, business services, information on market opportunities, technical guidance and assistance, promotion and marketing, as well as financing, guarantees, and export insurance.

MSMEs can also take advantage of various programs to expand global market access through e-commerce, for example, Shopee "Kreasi Nusantara, From Local to Global", Bukalapak "BukaGlobal", and ASEAN Online Sale Day (AOSD). This is to encourage the use of e-commerce which is still low, which is around 24 percent of the total MSME players.

In addition, Coordinating Minister Airlangga continued, the government has provided policy affirmations through the Job Creation Law and Government Regulation Number 7 of 2021 concerning Ease, Protection, and Empowerment of Cooperatives and MSMEs.

In the Job Creation Law, there is a policy to support and facilitate the export of MSME products, through the provision of Customs Incentives for export-oriented MSEs in order to facilitate the import of raw materials and industrial auxiliary materials, as well as facilitating their exports. SMEs are also encouraged to take advantage of partnership opportunities with large businesses that aim to improve their competence and level of business.

The government has also prepared a special export financing program for export-oriented SMEs with an allocation of IDR 500 billion, which is distributed by LPEI/Eximbank, with a 6 percent interest rate facility and 30 percent collateral from the loan value.

"The various efforts that have been initiated by the government certainly require support from all parties. It is hoped that these various policies can be utilized optimally by MSMEs to accelerate the improvement of their business competitiveness," said Coordinating Minister Airlangga.

He further revealed that the improvement in the trade balance in the first semester of 2021 which increased by 14.18 percent (yoy) must be utilized properly for MSME players to encourage the export of their products.

"This is a very good potential and can be developed through joint collaboration between agencies to increase the contribution of MSMEs to national exports, as well as to increase the growth of new exporters," he said.

Meanwhile, based on data from the Ministry of Cooperatives and SMEs, the number of MSMEs currently reaches 64.2 million, with a contribution to GDP of 60.51 percent or IDR 9.580 trillion with the ability to absorb 96.92 percent of the total workforce, and can collect up to 60.42 percent of the total investment.