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Government's plan to empower MSMEs through omnibus bill faces backlash
Association of Indonesian MSMEs (Akumindo) chairman Ikhsan Ingratubun said the plan would harm micro and small businesses.
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Initiators and participants of the Ayo UKM Jualan Online (SMEs, Let's Sell Online ) movement during its launch in Jakarta in April 2019. (JP/Riza Roidila Mufti)
T
he government’s plan to empower micro, small and medium enterprises (MSME) and cooperatives through the omnibus bill on job creation is facing backlash from stakeholders.
Association of Indonesian MSMEs (Akumindo) chairman Ikhsan Ingratubun said the plan would harm micro and small businesses.
“The President said during his inauguration speech in 2019 that the government would empower MSMEs. However, the bill may actually harm businesses,” Ikhsan told The Jakarta Post on Wednesday.
“The bill does not set a maximum threshold for businesses that could be considered an MSME, this could lead to big businesses claiming to be MSMEs.”
Ikhsan said the bill could lead to multiple interpretations, calling on the government and stakeholders to review it.
According to Article 94 of the draft bill, an MSME is defined by several criterial, namely its net worth indicator, annual sales results, investment value and number of workers. Further provisions will be regulated through a government regulation (PP).
It will change Article 6 on Law No. 20/2008 on MSMEs, which stipulates that for a business to be considered a microbusiness, it must have a minimum net worth of Rp 50 million (US$3,599) and earn a maximum of Rp 300 million (US$21,900) in annual sales.
