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Keeping up with global market bodes well for SMEs
“Given the prospective of Indonesian SMEs in the global market which will add up to the country’s export activities, Bank Indonesia has consistently supported Indonesia SMEs to go global, as in the end it will help us in reducing Indonesia’s current account deficit.
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(Courtesy of Bank Indonesia (BI))
“Given the prospective of Indonesian SMEs in the global market which will add up to the country’s export activities, Bank Indonesia has consistently supported Indonesia SMEs to go global, as in the end it will help us in reducing Indonesia’s current account deficit” Said Doni P. Joewono, Bank Indonesia Deputy Governor, in his keynote speech at Business Forum held in hybrid format, part of Indonesia’s participation in Dubai Expo 2020 on March 17.
Indonesia saw UAE as its strategic partner, which had been served as one of the global trade hubs, especially Dubai as the center of import and re-export of Indonesian products to other countries. “In this regard, we believe Dubai plays a role as our entry point to expand the market for Indonesian products to the Middle East, Africa and Europe,” he said.
“We understand that SMEs’ contribution to exports is quite limited (15.6 percent) as well as their linkage to the global value chain (4.1 percent). However, we recognize that Indonesian SMEs have a large potential to export their products to all parts of the world. This is based on our experience participating in various exhibitions overseas,” he said.
BI’s policy of accelerating SME exports covers both the Push and Pull strategies. “In the Push strategy, we prepare our SMEs to enter the international market, for example, by providing training to obtain the necessary licenses or certifications, while in the Pull strategy, we support our SMEs to participate in the worldwide exhibitions that provide broader access to the global market, such as this Dubai Expo, along with the effort through the global digital platform,” he explained.
Doni listed the varied SME products that had been accepted in the global market as fashion, handicrafts, processed food and commodities such as coffee beans.
Doni pointed out that Bank Indonesia, along with other Indonesian government institutions, were hand in hand in supporting our SMEs to enter the global market.
Providing Indonesia’s small-and-medium enterprises (SMEs) with more opportunities to keep up with the global market will pave the way to successful international market penetration, according to United Arab Emirates (UAE) business players.
Housen Tarrab, owner of Tarrab Trading Co LLC; and Malik Fahad, Group General Manager of Epic Star Group of Companies Dubai, shared their experiences in doing business with Indonesian business counterparts, especially SMEs.
The two speakers were of the view that Indonesian SMEs were talented and quick to learn when it came to meeting international customers’ demands, despite some tough challenges they have to address.
For over 20 years, Tarrab, who is also a supplier of custom-made furniture, home décor and hotel projects, has constantly imported home décor products from Indonesia, with SMEs as his business partners.
“If I may suggest, give them [SMEs] more chances to be in touch with the global market, which will allow them to learn many things. They are really valuable and this will have a good impact on the Indonesian economy,” he told more than 500 enthusiastic zoom participants.
Meanwhile, Malik Fahad said that of all SMEs products in the UAE, including imported ones, 40 percent is sold in Dubai and 35 percent in Abu Dabi.
Epic Star Group of Companies, which is engaged in the export and import of mainly fruits and vegetables from all over the world, also runs a retail business and launched Hypermarket in UAE in 2018, providing spaces for products from different countries, including Indonesia.
EPIC Star was founded by Shahbaz Munir, CEO and cofounder, from Pakistan; and Susana Etik Mukadi from Indonesia as a cofounder. EPIC itself stands for Efforts of Pakistan, Indonesia and China, according to Fahad.
“Alhamdulillah (thank God), between 10 and 15 percent of the space in our Epic Star Hypermarkets is filled with Indonesian products. This means the products are excellent in terms of quality and competitiveness,” said Fahad.
Epic Star imports processed food products from Indonesia.
He advised Indonesian suppliers of SMEs products to be proactive in reaching the Dubai market by having better marketing and sales planning.
He assured that in his hypermarket, there was space for Indonesian SMEs. “Insya Allah (God willing), Indonesian SMEs will grow,” he said.
Moderated by Ni Made Ayu Marthini, Pavilion Indonesia Director, the Business Forum themed “Promoting Indonesian SMEs to Global Value Chain” also featured Wanoja Coffee, Indonesian Coffee Farmer Dindin Mauludin, BI SMEs Development and Consumer Protection Department Head Yunita Resmi Sari and the Trade Ministry’s Indonesia Export Training Center Head Heryono Hadi Prasetyo.
Training programs
In response to the challenges faced by SMEs, which cause the remaining low export value, the government through the Trade Ministry, in collaboration with Bank Indonesia, the banking sector and non-banking sector, provide training programs for SMEs.
The training programs, which aim to enhance SMEs’ export capacity, includes providing SMEs with assistance in designing, packaging and certification, promotional facilitation, database, etc., according to Heryono Hadi Prasetyo.
Yunita Resmi Sari, meanwhile, said that despite the small participation in the global supply chain, the Indonesian SMEs sector had experienced an increase in its export value over the years.
According to her, most products of BI-fostered SMEs, such as coffee and handicrafts, are exported to Asia, Europe and the US. “How we achieve this is by joining international trade promotions facilitated by BI,” she said.
In 2021 only, BI facilitated around 37 events for trade promotion, involving 300 SMEs, engaged mostly in fashion, food and beverages, coffee, home decor and jewelry.
Most of the trade promotions were followed up with the signing of an MoU between SMEs and aggregators, or business matching, and even direct sales from the top upscale stores. “Communication between buyers and SMEs continued after the event, with some placing orders and others visiting SMEs’ workshops,” she said.
The March 17 Business Forum at Dubai Expo 2020 also witnessed visitors flocking to the Indonesian pavilion to taste authentic Indonesian coffee in a coffee cupping session titled “Experience Indonesia Through Coffee”. The coffee was freshly brewed by Mikael Jasin, 4th ranked barista at the world barista championship 2019, and the founder of SO SO Good Coffee Company.
Hosted by Bank Indonesia, the invitees had an unprecedented opportunity to taste premium selected coffee from seven regions in Indonesia, namely North Sumatra’s Drip Coffee, Aceh’s Ulunuwih, South Sumatra’s Bestkabean, West Java’s Wanoja, Bali’s Arabica Kintamani, West Nusa Tenggara’s Ude Berkah Alam and South Sulawesi’s Kata Toraja Kopi.
