More entrepreneurs will propel growth: VP
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Vice President Boediono is highlighting the need for Indonesia to have more entrepreneurs, arguing that they can have a strategic role in driving the country’s economy.
Compared to other countries in Southeast Asia, Indonesia is still lagging in its number of entrepreneurs, in spite of their important role in job creation and welfare improvement, Boediono said at an address at Bank Indonesia’s (BI) Global Entrepreneurship Week on Monday.
“Among other ASEAN countries, Indonesia has a relatively low number of entrepreneurs. According to the 2008 entrepreneurship survey conducted by the World Bank, entrepreneurs in Indonesia only account for 1.56 percent of its citizens. This compares with 4 percent in Malaysia, 4.1 percent in Thailand or 7.2 percent in Singapore,” he said in the central bank’s headquarters in Jakarta.
“As a government official, I know how strategic the role of entrepreneurs is: they are usually the ones spearheading change and innovation,” added Boediono.
In his address, Boediono argued that there were several constraints hampering the development of entrepreneurs in Indonesia.
Among the issues that the Vice President pointed out were a lack of clear regulations supporting the establishment of businesses in Indonesia, as well as a shortage of well-educated human resources.
For Indonesia to have more entrepreneurs, the country’s banking industry also has to exert more efforts to reach more people with credit and other financial services, a government goal known as financial inclusion, added Boediono.
Currently, only half of the households in the country have access to credit, data from BI shows. Banks do not establish branches in remote areas due to the high risk and costs of expansion, analysts have said.
“I and other fellow policymakers have agreed that [financial inclusion] is an extremely important issue, as currently there remain many informal sector players that are yet to be tapped [by Indonesian banks],” said Boediono, who is a former BI governor.
BI Governor Darmin Nasution shared similar views with his predecessor at the central bank, saying that Indonesia’s huge domestic market offered big opportunities for entrepreneurs to develop.
He argued that local entrepreneurs would actually have a competitive edge over foreign investors due to their better comprehension of the domestic market.
“The issue of the dearth of infrastructure [in our economy] is a palpable thing and has been frequently discussed. But we believe that another noteworthy issue that is also relevant to be discussed is how we can produce more national entrepreneurs,” Darmin said, urging Indonesian banks to allocate more of their corporate social responsibility (CSR) funds to programs aiming to develop entrepreneurship in Indonesia.
Attending the event as speakers were Ciputra, founder of property developer giant Ciputra Group and recently known as an entrepreneurship guru; Chairul Tanjung, founder and owner of diversified business group CT Corp; and Dahlan Iskan, the state-owned enterprises minister and the former CEO of Indonesian newspaper publisher Jawa Pos Group. (sat)