In a bid to alleviate poverty and develop a community-based economy amid the global financial downturn, the Pasuruan administration has established a small and medium-scale enterprises (SMEs) center, which will act as an integrated business development center for SMEs.

Its presence has been long awaited by the 17,496 SMEs in Pasuruan, which once employed 91,648 members of the local workforce, as only 54 SMEs have managed to so far weather the global economic crisis and impacts from the Lapindo mudflow disaster in Porong, Sidoarjo, East Java.

Pasuruan Vice Regent Eddy Paripurna said most of the idle SMEs face obstacles, such as a lack of capital and technological know-how, mismanagement and market constraints.

"We have made concerted efforts, but the government cannot stand alone in developing the area's potential without help from various parties, especially the private sector," Eddy told The Jakarta Post.

Pasuruan has a number of potentials for development, such as the furniture industry in Winongan district, the embroidery industry in Bangil and the handicraft and fishery sectors.

Eddy said the local SMEs, besides absorbing the local workforce, had contributed significantly to Regional Generated Income (PAD) from licensing and taxes.

"Besides efforts to revive the affected businesses this year, the Pasuruan regency administration is confronted with the daunting task of facing the possibility of massive layoffs at a number of industries in Indonesia, including the repatriation of thousands of Indonesian migrant workers," he said.

The East Java provincial administration, led by Governor Soekarwo, is faced with two major regional economic issues - 6.5 million poor people and 1.3 million unemployed people. According to 2008 data from the Regional Economic Development Institute (REDI), East Java had the largest number of poor people of any other province in Indonesia. Of the 34.9 million poor people in Indonesia, 19 percent of them are found in East Java.

Based on data from the Central Statistics Agency (BPS), the five provinces with the highest number of poor people in Java is East Java, followed by Central Java (6.18 million), West Java (5.32 million), Banten (816,000) and Yogyakarta (616 million). North Sumatra and Lampung are other provinces with a very high poverty rate, with more than 1.5 million poor people each.

Herry Tisno, head of the Pasuruan Cooperatives Agency, said his office would not solely depend on the central government to resolve the mudflow issue, adding that the local administration would not give in to the current situation either.

"Apart from training and micro credit loans provided by companies from their corporate social responsibility program, such as PT HM Sampoerna, the administration will also publish a catalog on SMEs in Pasuruan which is expected to inform prospective investors and buyers of Pasuruan's primary products and potentials," he said.

Corporate Affairs Director of PT HM Sampoerna Yos Adiguna Ginting said his company would set up supermarkets, such as Alfamart and Giant, and provide assistance in the form of micro credits to SMEs.

A tempeh producer in Ngadimulyo village, Sukorejo district in Pasuruan, Muari and his wife Wasita are one of the SMEs that have successfully developed their business thanks to the assistance of the cigarette company.

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