Airlangga Hartarto: The Government Continues To Support The Development Of MSMEs To Restore The National Economy

Coordinating Minister for the Economy Airlangga Hartarto met MSME players during a working visit in Klaten, Central Java August 14, 2021. (Doc. Coordinating Ministry for the Economy)

JAKARTA - Coordinating Minister for Economic Affairs Airlangga Hartarto said that Micro, Small and Medium Enterprises (MSMEs) are vital indicators in maintaining the momentum of national economic recovery through their contribution to essential sectors.

The growth of MSMEs, according to Airlangga, is also a trigger for improving people's welfare through the availability of high job opportunities, as well as the distribution of community income for economic equality.

The important role of MSMEs is evidenced by their contribution to GDP which reaches 60.5 percent and labor absorption reaches 96.9 percent of the total national labor absorption. In addition, MSMEs have also proven to be resilient in the midst of the pandemic, as can be seen from the increase in the MSME business index from the third quarter of 2021 to the second quarter of 2022.

Considering these various contributions, said Airlangga, the government continues to give full attention to developing MSMEs through various policies.

"The COVID-19 pandemic has had an impact on MSMEs, so the government has pushed for a special program for national economic recovery by allocating IDR 121.20 trillion in 2020 and IDR 83.19 trillion in 2021 through People's Business Credit, BPUM, Non-KUR Interest Subsidies, Guaranteed Working Capital Loans, and others,” said Airlangga during a webinar entitled 'The Contribution of MSMEs to the National Economic Recovery – Multi-stakeholder Collaboration in MSME Empowerment, Saturday, August 6.

The development of MSMEs, Airlangga continued, has become the main focus of the government in accordance with the mandate of the 2020-2024 RPJMN regarding strengthening entrepreneurship, MSMEs and cooperatives through strategies for transforming informal businesses into formal ones, digital transformation, transformation into value chains, and modernizing cooperatives.

The General Chairperson of Golkar said that a formal transformation was carried out so that MSMEs could obtain convenience related to access to financing, assistance, and the market supply chain by being registered in the Business Identification Number.

On the other hand, the Government has also issued Government Regulation Number 7 of 2021 concerning Ease, Protection, and Empowerment of Cooperatives and MSMEs as an effort to encourage MSME empowerment to become formal and obtain facilitation from Ministries/Agencies and Local Governments.

Furthermore, the Government also issued Presidential Regulation Number 4 of 2022 concerning National Entrepreneurship Development which aims to achieve an entrepreneurial ratio of 3.95 percent in 2024.

In addition, related to providing support for financing facilities, said Airlangga, the government provides financing schemes that can be accessed by MSMEs according to their class, starting from the Partnership and Community Development Program, PT PNM's Mekaar, Micro Waqf Bank, ultra-micro financing, and KUR.

"Especially for the KUR program, the Government has extended the additional KUR interest subsidy by 3 percent until the end of December 2022 and increased the KUR ceiling to Rp373.17 trillion in 2022 in response to high financing needs," he said.

Other support is also provided by the Government by encouraging the acceleration of digital technology adoption for MSMEs to be able to adapt to changes in consumer behavior.

The encouragement is carried out through two main approaches, namely strengthening the MSME/IKM ecosystem, such as providing ease of licensing, fiscal incentives, and financing as well as strengthening the e-Commerce ecosystem, such as creating a fair business climate (fair playing field), digital payments, logistics, and protection of personal data.

Coordinating Minister Airlangga also conveyed the importance of good integration and coordination by all parties to support the implementation of policies and programs that have been planned by the Government so that MSMEs can advance to class and become the driving force of the national economy.

"The key to success in developing MSMEs is the creation of an integrated institutional ecosystem and supportive government policies," concluded Coordinating Minister Airlangga Hartarto.