Indonesian MSMEs Must Be Able To Penetrate Exports, Here's The Reason

Illustration. (Photo: Doc. Antara)

Minister of Finance Sri Mulyani said that to increase the empowerment of Micro, Small and Medium Enterprises (MSMEs) is part of all stakeholders so that they can compete so that they can penetrate foreign markets.

"The need for empowerment in terms of MSMEs to be able to perform and have productivity and competitiveness, in line with our desire to improve our trade and export performance is getting higher," he concluded on the BRI Microfinance 2024 agenda in Jakarta, Thursday, March 7, 2024.

Sri Mulyani said that Indonesia must be able to penetrate the export market because if it is not able to produce foreign exchange, the economy from the external side of the balance will be under pressure.

"Why do we have to penetrate the export market? Because Indonesia also needs imports. Even the lifestyle of many of our people needs imports. From a lifestyle to a lifestyle of traveling, if Indonesia is unable to produce foreign exchange, the economy from the external side of Balance will definitely face pressure," said Sri Mulyani.

According to Sri Mulyani, because Indonesia imports goods and services from abroad, Indonesia must also be able to export goods and services. So that external balances are maintained. Therefore, Indonesia must be able to increase tourism attraction, including up to the retail level.

"We must be able to increase Indonesia's appeal to Capital Inflow. Therefore, we will continue to improve the performance of export MSMEs, including using instruments such as Indonesian export financing institutions," he said.

Sri Mulyani said that the absorption of MSMEs currently reaches 97 percent, with a contribution to GDP of 61.1 percent. However, the contribution of MSMEs to the export market is still relatively low when compared to other countries, which only reaches 15.8 percent.

Meanwhile, this figure is lower than Sri Lanka, which is 20 percent, Malaysia 19 percent, Vietnam 20 percent, Pakistan 25 percent, Thailand 29.5 percent, Korea 30.9 percent, India 40 percent, and Japan 53.8 percent.

"MSMEs contribute to GDP up to 61 percent, this is also relatively higher than countries in ASEAN and the G20 countries. Meanwhile, MSMEs are so large in number and the impact on the economy has not been able to penetrate the export market," said Sri Mulyani.