Bahlil: Indonesia Needs 10 Percent Of The Population To Become Entrepreneurs To Maintain Jobs, Like In The US And Singapore

Investment Minister Bahlil Lahadalia (Photo: Doc. Ministry of Investment)

JAKARTA - Investment Minister/Head of the Investment Coordinating Board (BKPM) Bahlil Lahadalia explained that to maintain the availability of sustainable jobs, Indonesia needs 10 percent of the total population to become entrepreneurs.

Bahlil said that currently the interest of youth to become entrepreneurs is very small, at 3.6 percent. Therefore, the government is trying to increase it again at 6 percent.

"Ideally, double digits (10 percent) of the population should become entrepreneurs. As in the United States (US) and Singapore, they have double digits as entrepreneurs," he said in a virtual discussion, Thursday, August 12.

The reason for the low interest of the younger generation to become entrepreneurs, said Bhalil, is because the licensing and funding process is very difficult. In terms of permits, to obtain a legality, usually young entrepreneurs or micro, small and medium enterprises (MSMEs) have to spend more than their working capital.

Not only that, said Bhalil, the absence of legality also has an impact on access to financing from banks and other financial institutions.

Based on Bahlil's report, in 2019 loans were successfully disbursed as much as Rp6,000 trillion. Of that amount, as much as Rp. 300 trillion was channeled abroad, while the remaining Rp. 5,700 trillion was domestically.

"For MSMEs, it can only be IDR 1,127 trillion, that's not more than 19 percent. After checking, it turns out that most of them are informal," he explained.

Furthermore, Bahli explained the government's efforts to overcome this problem by launching the Online Single Submission (OSS). This service is an online permit application platform, so that every permit application can be made without visiting a government office.

Later, said Bhalil, the permits obtained by the entrepreneurs will be connected with the Ministry of Investment and other relevant ministries as well as the local government. OSS is also part of the derivative of the Job Creation Act on ease of doing business.

"Because there are only four entrepreneurs who are needed, namely certainty in processing permits, ease of obtaining permits, transparency and cost efficiency. First imagine that permits in Indonesia if tawaf (going around) do not know how long it will be completed," he explained.