Gov’t Supports Cooperatives, MSMEs to Join Global Supply Chain
Date 6 September 2021
The Government is committed to connecting cooperatives, micro, small and medium enterprises (MSMEs), and small and medium industries to global value chain, according to Minister of Cooperatives, Small and Medium Enterprises Teten Masduki.
Teten said that one of the measures to achieve the goal is cooperation between Ministry of Cooperatives, Small and Medium Enterprises with Ministry of Industry and Ministry of State-Owned Enterprises to support the inclusion of cooperatives and micro, small and medium enterprises in State-Owned Enterprises supply chain.
“The pilot project is the partnership between cooperatives, MSMEs, and small and medium industries with six state-owned enterprises, namely PT Pertamina, PT PLN, PT Kimia Farma, PT Krakatau Steel, Perum Perhutani, and RNI,” Teten said as quoted by the Ministry’s official website on Monday (09/06).
Teten said that more than 64 million MSME businesses provide 97 percent of the total national employment and 60 percent of the total national GDP. On the other hand, MSMEs only contribute 14 percent to the total national export, while large businesses contribute up to 86 percent to the national export. The number shows that the role of MSMEs is significant in the national economy but still minimum in terms of exports.
Teten went on to say that the cooperation is expected to strengthen MSMEs and connect them to the global value chain.
In the meantime, Minister of Industry Agus Gumiwang Kartasasmita said that industrial development must be implemented based on three principles, namely developing an independent and resilient industry, spurring advanced and competitive industries, and creating a just and inclusive industry. Empowerment and increasing the role of small and medium industries will significantly support the resilience of the domestic manufacturing industry.
“Through the partnership program, we will continue to encourage more small and medium industries to work hand in hand with State-Owned Enterprises to increase the use of domestic products,” Agus said.
Minister of State-Owned Enterprises Erick Thohir said that 43 State-Owned Enterprises in 12 clusters have joined the “PaDi UMKM,” a digital platform that connects MSMEs to State-Owned Enterprises. As of last August, the platform has generated 130,000 transactions with a transaction value of Rp 10.3 trillion, involving 9,600 MSMEs.
“I hope this cooperation can continue to be improved. We at Ministry of State-Owned Enterprises will support the cooperation,” Erick said.
For the record, Government Regulation Number 7 of 2021 on Facilitation, Protection, and Empowerment of Cooperatives and Micro, Small, and Medium Enterprises provides support for the development of cooperatives and MSMEs, including by optimizing 40 percent of Government institution spending to absorb MSME products, ensuring 30 percent of public infrastructure for MSME businesses, and encouraging strategic partnerships between large businesses and micro and small businesses. (PR of Ministry of Industry /PR of Ministry of Cooperatives, Small and Medium Enterprises/PR of Ministry of State-Owned Enterprises/UN) (RI/LW)