President Jokowi Pushes for MSME Product Downstreaming

By Office of Assistant to Deputy Cabinet Secretary for State Documents & Translation     Date 31 Agustus 2023
Category: News
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esident Jokowi at the inauguration of the 18th National Work Meeting of HIPMI at Nusantara Hall ICE BSD City, Tangerang regency, Banten province, Thursday (08/31). (Source: Screenshot)

The Government promotes downstreaming in micro, small, and medium enterprise (MSME) sector in addition to downstreaming in the mining sector, President Joko “Jokowi” Widodo has said.

“Once again, let me inform you that downstreaming is not only carried out in big sectors. It is not merely for nickel, not merely for copper mining or other big sectors. No. we must also industrialize SMEs. We must carry out downstream process for all raw products,” he said at the inauguration of the 18th National Work Meeting of the Indonesian Young Entrepreneur Association (HIPMI) at Nusantara Hall of Indonesia Convention Exhibition (ICE) BSD City, Tangerang regency, Thursday (08/31).

The President also expressed appreciation for businesspeople who carry out downstream process.

“All provinces must do it and the initiator must be HIPMI. HIPMI must be the initiator because young entrepreneurs must have creativity and innovation. They must, I assure you,” he said, adding that there are other products that have a huge potential to be downstreamed, such as coffee, palm sugar, oil palm, and seaweed.

The President also expressed hope that processed products can fill markets at home and be exported.

“We are the second largest seaweed producer in the world, but it is exported raw. I checked where the raw seaweed is imported, to the Philippines, to Thailand. Why don’t we make our own industry here so that we can make flour, semi [-refined] carrageenan? The added value will skyrocket,” he said.

The President pointed out that based on the calculation of the National Development Planning Agency, downstreaming program will boost Indonesia’s per capita income to US$10,900 in the next 10 years, USD15,800 in the next 15 years, and US$25,000 when Indonesia achieves the 2045 Golden Indonesia.

Thus, President Jokowi expressed hope that the next leaders of Indonesia can continue the downstreaming program.

“Do not let goods be exported raw. Industrialize and downstream it at home so that jobs are created, we get the added value, and the country gets it too. If there is an added value, the country will get it and the state revenue will automatically increase,” he said.

On that occasion, President Jokowi also promoted the credit scoring system, especially people’s business credit (KUR) for MSMEs.

“I continue to push the ministers, the Financial Services Authority (OJK), and Bank Indonesia (BI) to allow KUR to be given without collateral. It must use the credit scoring system. It is supposed to work like that because 145 countries have used the credit scoring system for MSMEs,” he said.

According to the President, the credit scoring system implementation will greatly help MSME actors to start and develop their business.

“Young entrepreneurs who only begin to enter the business world usually have not had any asset, have not had any collateral. Thus, if the credit scoring system is used, it will facilitate them,” he remarked. (DND/UN) (DH/MMB)

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