JAKARTA - Minister of Cooperatives and SMEs (Menkop UKM) Teten Masduki said the evolution of cooperatives and MSMEs was one of the keys in making Indonesia a developed country in 2045.
"So how do we transform informal business to formal, originally unproductive to more production thanks to technology. That is evolution," said Teten in his official statement, Saturday, August 12.
Teten explained, Indonesia needs to encourage and develop MSMEs and cooperatives. According to him, currently the focus of developing MSME products is no longer just thinking about packaging, but also taking advantage of technological innovations and highlighting domestic excellence.
"Regions must begin to identify their respective local potentials and domestic advantages. Don't be like all of them. We move on into technological innovations and highlight our domestic advantages," he said.
According to Teten, there are two policies that can be used to become part of the evolution of MSMEs and cooperatives. This policy is import substitution and downstreaming.
The import substitution policy has made 40 percent of government spending for local products or MSMEs. Meanwhile, downstream policies can also be used to no longer export raw materials, but create a variety of finished products from these materials.
"Downstreaming, for example, we are rich in seaweed. Then, we have this palm oil factory and red food oil. We also have rubber for downstreaming and also coconut products whose processed products are considered healthier and pro-environmental," said Teten.
He assessed that the downstreaming would encourage investment in processing of produce, mines, plantation products, agriculture, marine, and others.
"So, MSMEs don't just produce culinary, wovenness, and others, that's pretty good. We move on to create MSMEs that become part of the industrial supply chain," he said.
In addition, Teten also emphasized that currently the whole world has the same economic structure as Indonesia. In this case, MSMEs are the most dominant business sector. However, MSMEs out there do not stand alone, but have become part of the industrial supply chain.
"So, MSMEs are no longer competing with industrial products. This arrangement needs to be built. This needs to be linked to our roadmap making Indonesia a developed country in 2045," he added.
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