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Committee IV of DPD RI: Business Zoning is Important to Encourage the Empowerment of MSME in the Region

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JAKARTA – Committee IV of Indonesian Regional Representative Council (DPD RI) had held a working meeting with the Minister of Cooperatives and Small and Medium Enterprises (Kop UKM) to discuss the current condition of MSME and the performance of the ministry.

The working meeting which was held on 2 April 2024 was chaired by the Vice Chairwoman of Committee IV of DPD RI Dra. Hj Elviana, M.Si and attended by all members of the committee.

In her speech, Elviana said that MSMEs must be empowered as a major component in the community’s economy that has an important position, role, and potential in achieving a more balanced, developed, and equitable national economic structure.

“MSME empowerment needs to be organized thoroughly, optimally, and continuously through developing a conducive environment, providing business opportunities, support, protection, and business development as widely as possible, so it is able to raise the class of MSMEs” he said.

Minister of Kop UKM Teten Masduki explained that the survey had stated that, in almost all business sectors, MSMEs were still expansive although slowing down slightly and MSMEs remained confident that their businesses would continue to expand. This is reflected in the Business Expectation Index which strengthened by +6.9 points.

In addition, the trust of MSME players in the government is also getting higher as seen in the MSME Trust Index in the Government which strengthened by +5.6 points, he said in starting his presentation regarding the current condition of MSMEs.

“We identified three strategic issues in empowering MSMEs, namely limited access to capital, limited access to marketing, and rising raw material prices,” Teten said.

“We also need to convey that the realization of KUR distribution accumulatively (2007-2023) reached Rp1,751 trillion distributed to 56,792,237 debtors and until now 25.42 million MSMEs have been digitally on boarding through the KemenKopUKM Digital Change Movement. It is also recorded that in 2023 the transaction value of purchasing MSME products in the Catalog system will reach Rp275.7 trillion,” he added in a presentation related to the performance of MSMEs.

During the meeting, Sukisman Azmy as a senator from West Nusa Tenggara (NTB) highlighted matters related to the quality of human resources of MSME players.

“There are several things that are a challenge in empowering MSMEs, including limited skills, limited literacy of MSME, then the education level of MSME players who are on average elementary school graduates. The standard of MSME production is low because the quality of human resources is also low,” he said.

Meanwhile, responding to the presentation of the Minister of Kop UKM, Senator of Southeast Sulawesi Amirul Tamim suggested that the potential of MSMEs in the future is large, so there are things that need to be considered to face The Golden Indonesia.

“One of the things that must be a concern is the capital problem faced by MSME players, which then drives the rise of MSMEs that are entangled in loan sharks,” said Amirul Tamim.

“The government also needs to pay attention to areas that are tourist destinations, where MSME empowerment is constrained by the lack of tourist visits due to high ticket prices or transportation costs to tourist areas,” he added.

Vice Chairman of Committee IV of DPD RI Novita Anakotta said collaboration and synergy with various ministries on MSME empowerment are needed.

Maluku itself has challenges in distributing MSME products outside the province, which is due to the high cost of distribution.

“Then, what efforts are made by the Ministry of Kop UKM to grow 1 million entrepreneurs as stated, and what indicators are used for MSMEs to get priority programmes from the ministry?” Novita asked.

Senator of Aceh Sudirman said that MSMEs are currently not directed in the zoning of business fields and the community is left to move alone without knowing the direction of their business and its potential.

“We must do business zoning, designing, so that MSMEs can move according to the zoning and culture of each region. Socialization and training for MSMEs must be intensively carried out by the Ministry of KopUKM,” he said.

Vice Chairwoman of Committee IV of DPD RI Elviana also highlighted the placement of officials at the SME Cooperative Office, most of whom were less competent.

In fact, the person in the position of Head of SME Cooperative Office must be competent and understand the governance of SME cooperatives so that the empowerment of SMEs can be realized optimally.

“We see that the potential of MSMEs in the regions is extraordinary, but it lacks the help from related stakeholders, such as coordination between the Ministry of Kop UKM with PT.PNM, BRI, and other related institutions,” she explained.

“Then, in the extreme poverty alleviation programme, there are 100 priority districts / cities that become the target. It should be mapped out what types of businesses they can do and their needs so that hopefully in the future MSMEs can be taken care better of and receive maximum attention,” added Elviana.

Also present was Committee IV member from DKI constituency Prof. Jimmly Assidiq, who highlighted the implementation of the current cooperative economy.

“Our cooperative economy has not been practiced seriously, cooperatives must become the spirit and paradigm of the future economy, cooperative institutions must also be considered,” he said.

Teten Masduki responded that 99.9% of Indonesian economic players are MSMEs and MSMEs in Indonesia are survival in nature, only to support the family. While in other countries, MSMEs are part of the industry.

“Our MSMEs are disconnected from the industry so they are not connected to the supply chain and this is what we will fix,” he said.

At the end of the meeting, it was agreed that Committee IV of DPD RI and the Ministry of Kop UKM agreed to work together in socializing and implementing programmes related to the empowerment of UMKM in the regions.

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