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Jakarta Post

Govt to spend $49.7b on procuring SMEs products, services

  • Dzulfiqar Fathur Rahman

    The Jakarta Post

Jakarta   /   Thu, June 18, 2020   /   05:47 pm
Govt to spend $49.7b on procuring SMEs products, services A visitor examines batik on show at the Beauty of Peranakan Style exhibition at the Tugu Hotel in Malang, East Java, on Wednesday. Micro, small and medium enterprises from Surakarta, Lasem, Pekalongan and Semarang in Central Java as well as Bali and Jakarta took part in the exhibition. (The Jakarta Post/Aman rochman )

The government plans to buy products and services from small and medium enterprises (SMEs) for official state procurement, potentially spending over Rp 700 trillion (US$49.7 billion) as part of its efforts to help the sector, a minister says.

Cooperatives and SMEs Minister Teten Masduki said on Wednesday that four ministries would start buying small businesses’ products next week as part of the trial. He did not name the ministries.

“I am trying to push the government to prioritize SMEs’ products for its spending this year and beyond,” Teten said in an online talk on Wednesday.

The plan emerged about a month after the ministry reported in late April that small businesses booked a 57 percent decline in sales since the COVID-19 pandemic hit Indonesia and dragged a large part of the economy to a halt.

The minister said support for small businesses was necessary because their contribution to the country’s gross domestic product (GDP) amounted to 60 percent and an overwhelming majority of the national workforce was employed by SMEs.

According to Presidential Regulation No. 16/2018, ministries and government agencies have to buy local products if available and prioritize small businesses’ products.

“We will prepare the platform for procurement and facilitate the interaction with the provider,” Roni Dwi Susanto, the head of the National Public Procurement Agency (LKPP), was quoted in a statement as saying on Wednesday.

The Indonesian Employers Association (Apindo) joined the government in offering support for small businesses through a newly introduced weekly consultation program held on Wednesdays, dubbed Apindo SMEs Academy.

Bigger businesses will offer insights on business development to participating SMEs through webinars, online learning and continued guidance.

“I often hear that SMEs face issues related to financing accessibility, marketing and business knowledge,” Ronald Walla, the head of SMEs division at Apindo, said in an online talk on Wednesday. “Thus, we are taking this initiative to provide a strategic platform to listen to SMEs’ needs and what the association can do to help.”

Teten wants his office and the association to collaborate on curating SMEs’ products that are ready to meet the government’s needs.