Indef: The UMKM Sector Should Be The Government's Priority In Economic Recovery

Illustration. (Angga Nugraha / VOI)

JAKARTA - The Institute for Development of Economics and Finance (Indef) assesses that the government needs to prioritize the micro, small and medium enterprises (UMKM) sector in economic recovery. This is because the MSME sector can have a multiplier effect on society, including in creating demand.

Senior economist, Indef Enny Sri Hartati, said that the incentives for the MSME sector should also be greater than for large-scale corporations. Because, if we talk about the history of MSMEs in the past crisis, it has proven to be of benefit to national economic recovery.

"It really has concrete economic benefits. That's why I (hope) focus more on MSMEs," he said in a video conference with journalists, Thursday, June 18.

On the other hand, Enny highlighted the budget issued by the government in the national economic recovery program (PEN) to help BUMN. Moreover, the number has increased. He considered, this is less effective.

Furthermore, Enny said, the budget could potentially be used for things that were not supposed to be, such as paying off debts of state-owned companies that were due. One example is the stimulus for PT Krakatau Steel. This company is considered not to have many benefits. Thus, giving a stimulus especially during mid-week becomes inefficient.

According to Enny, the budget that is not small and comes from the APBN should be maximized in the health sector and to boost the people's economy. Moreover, the provision of this stimulus has also led to a wider deficit in the 2020 State Budget.

"The problem is that it is even more convincing to the public that there is no real handling of COVID-19," he said.

Enny assessed that the government does not side with MSMEs. This is reflected in the provision of tax incentives or final PPh that is borne by the government for smaller MSMEs, namely IDR 2.4 trillion compared to non-MSMEs tax incentives of IDR 121.6 trillion.

On the same occasion, Deputy Chairperson of the Indonesian Chamber of Commerce and Industry (Kadin), Suryani Motik said, MSMEs and the informal sector, which are usually the drivers of the economy when they are most resilient to crises, are currently the sectors most affected because they cannot operate when there are policies. large-scale social restrictions (PSBB).

"Whereas 115 million workers are in the UMKM sector, and 97 percent are national absorption. The head of the archipelago warteg community (Kowantara) said that although wartegs are still open, they have decreased by 50 percent. Why? Because people are afraid to shop at warteg," he said.

Suryani said that cleanliness is the main reason people are reluctant to buy food at warteg. This is because people are free to go out and go inside to choose food.

"Then, as many as 63 cooperatives and umkm or 6 percent stated that they experienced difficulty in raw materials. Mass layoffs of MSMEs are certain, those selling on the roadside were also hampered during the PSBB," he said.