Indonesia’s finance ministry empowers export-oriented business to boost economy

A container is lifted from a truck to be placed on a ship at the port of Kuala Tanjung in Batubara Regency, North Sumatra, on March 28. (JP/ Apriadi Gunawan). Sketched by the Pan Pacific Agency.

JAKARTA, Sep 9, 2020, ANTARA. The Finance Ministry has empowered export-oriented micro-, small-, and medium-scale enterprises (MSME) to step up their contribution in boosting the country’s economic growth impacted by disruptions arising due to the COVID-19 pandemic, ANTARA reported.

“MSME play an important role. Hence, the government is seriously endeavoring to help improve MSME,” Director General of Funding and Risk Management of the ministry Luky Alfriman stated during an online discussion here on Tuesday.

Alfriman highlighted the multiplier effect of empowering export-oriented MSMEs in the form of job creation and increasing the gross domestic product (GDP).

“Do not forget that we are also talking about equalization here, and this is among the benefits to empowering MSMEs,” he remarked.

MSMEs are among the sectors bearing the most acute brunt of the pandemic in line with the weakening global trade.

“The decline (in exports) is quite significant. Our exports in the first semester only reached US$76.41 billion,” he pointed out.

The government has launched various programs to support MSME operators to survive amid the COVID-19-induced crisis.

The national economic recovery (PEN) program has included the policy to support MSMEs, with budget totaling Rp123.46 trillion.

The PEN program for MSMEs encompasses fund deposits in state-run banks, investment funding from the Agency for Revolving Fund Management (LPDB), MSME’s income tax borne by the government, and interest rate subsidy.

The government has also tasked the Indonesian Export Financing Institution (LPEI) with boosting exports of MSME products based on Finance Minister Regulation No. 372/KMK.08/2020.

The ministerial regulation is aimed at ensuring that MSMEs get working capital and investment loan to boost its competitiveness in the national and international market.

“This is a financial funding for MSME that holds export potential though constrained by banking access,” he added.

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