G-20 News

The G20 Presidency, an opportunity for MSMEs to go global

Many parties expect Indonesia’s G20 Presidency to serve as a catalyst for the country’s economic recovery.

In addition to showcasing employment and investment opportunities, the international event is also expected to open more doors for local MSMEs (micro, small and medium enterprises) to export their products.

MSMEs have become a priority due to their important role and contribution to the national economy in the context of the COVID-19 pandemic. Thus, the momentum from the G20 presidency should help MSME players work on opportunities to go global, analysts say.

For this reason, various efforts, especially collaborations, are needed to encourage MSMEs to get the most out of it economically, they added.

Director of Financial Services Authority (OJK) Integrated Financial Services Sector Policy Group (GKKT) and Deputy Shariah and MSME Task Force Greatman Rajab said that one of the important roles of MSMEs in the Indonesian economy is in non-oil activities and gas exports, which reached 15.65% of total exports nationwide.

Therefore, the OJK continues to support the development of the MSME ecosystem, which includes the fashion, kitchen, horticulture, creative economy, furniture and animal husbandry sectors, in order to that they can become export priorities, he added.

Furthermore, Rajab stressed that MSMEs must take advantage of the G20 Presidency to boost business opportunities in the green sector.

The COVID-19 pandemic has served as a wake-up call for the transition to a green economy as a new source of sustainable and environmentally friendly economic growth, he said. The green economy can be part of the National Economic Recovery Program (PEN), he added.

Data from the World Economic Forum 2020 showed that green transition can generate business opportunities worth $10.1 trillion and create 395 million jobs by 2030, he said. Thus, it should encourage the creation of new business opportunities (green jobs) for MSMEs, including millennials, he added.

Similarly, Yessy Aktaina, Deputy Head of Small and Medium Enterprises (SME) Division of PT Bank Negara Indonesia (Persero) Tbk (BNI), said that MSMEs are increasingly playing a vital role in the national economy. .

For this reason, it deemed it necessary to continue to encourage them to internationalize or export their products. She pointed out that BNI’s current focus is to help Indonesian MSMEs to upgrade.

Aktaina stressed the need for collaboration between institutions for the development of MSMEs so that they can progress. According to her, Indonesian MSMEs have great potential. However, they currently face issues related to access that need to be addressed by regulations or programs of the institutions, she added.

Related News: G20 Presidency can help build capacity for MSMEs: Observer
Related News: G20 opens up new opportunities for MSMEs, tourism sector: ministry

Halal products

Meanwhile, the General Chairman of INTANI (Indonesian Farmers and Fishermen Association) and Special Assistant to the Vice President, Guntur Subagja, noted that the participation of MSMEs in the halal industry is not yet high.

As the country with the largest Muslim population in the world, Indonesia has the potential to become a producer in the halal industry, which is currently dominated by Brazil, the United States, India, Russia and China. China, he said.

In order to catch up, the Indonesian government is collaborating with trade players who are part of the Indonesian Export Digital Platform Association (PD Export) by creating an export ecosystem for halal products from MSMEs, “Global Halal Hub Indonesia”, said he added.

Currently, 99% of MSMEs make a significant contribution to Indonesia’s economic structure, he said. About 23.9% of MSMEs use digital platforms and 14% of MSMEs have entered the export market, he pointed out.

With consumer spending reaching $184 billion in 2020, Indonesia has been ranked as the world’s largest halal consumer market, he noted.

According to the 2020/2021 State of the World Islamic Economy (SGIE) report, Indonesia’s halal product exports reached US$8 billion, while imports reached US$10 billion during the of the period.

In addition, an investment of US$5 billion has been invested in the Indonesian halal sector. This highlighted that Indonesia is a very big market, Subagja said.

The general manager of the export center, Amalia Prabowo, underlined the importance of expert human resources in e-commerce in Indonesia.

According to her, Indonesia needs more e-commerce experts to push the participation of MSMEs in the export market.

She cited the example of Singapore, which earns income by buying goods from Indonesian MSMEs and reselling them on global e-commerce platforms.

Prabowo pointed out that the common goal of MSME activists is to push B2B exports.

Data from Alibaba and Amazon showed that B2B e-commerce grew sixfold compared to B2C, she added.

Related News: Government organizes online training on Halal product management for MSMEs
Related News: BPJPH to Synergize and Accelerate Halal Insurance System for MSMEs: VP

Positive growth

Deputy for micro-enterprises in the Ministry of Cooperatives and SMEs, Eddy Satriya, said Indonesia’s economy managed to grow positively in the second and third quarters of 2021 amid rising COVID-19 cases. 19 due to the spread of the Delta variant in July. the same year. In fact, the fourth-quarter growth led to further positive growth in Indonesia’s annual economy, he noted.

In 2021, through the National Economic Stimulus Program (PEN), the government has supported MSMEs with a budget allocation of Rs 96.21 trillion, he noted. Of the total, Rp 83.19 trillion has been made, he said.

Meanwhile, in 2022, the government has allocated a PEN fund of Rp 451.64 trillion in total, of which Rp174.87 trillion will be allocated to strengthening the economic recovery, he added.

Deputy for the Coordination of Digital Employment Economy and MSMEs at the Coordinating Ministry of Economic Affairs, Rudy Salahuddin, said MSMEs are key for economic recovery.

According to him, MSME players are a key driver for the Indonesian economy, as their contribution to GDP (gross domestic product) reached 60.51%, with labor absorption reaching 96.92%. .

MSMEs also have a role to play in boosting investment and exports from Indonesia, he said. Total investment in the MSME sector has reached 60% of total national investment, he noted. Its contribution to national non-oil and gas exports reached 15.65 percent, he added.

The head of the Goods and Services Procurement Agency (LKPP), Abdullah Azwar Anas, expressed hope that MSMEs would play a bigger role in public tenders.

He proposed that up to 1 million MSME products be included in the public procurement electronic catalogue. Currently, 150,339 products have been registered and by March 2022, it is expected that there will be 200,000 products, he said. Then, by the end of the year, 2 million products should be registered, he added.

MSMEs should make the most of Indonesia’s G20 presidency this year to become the drivers of Indonesia’s economic recovery and go global, he said.

Related News: PEN fund investments yield Rs 218.9 trillion in support of MSMEs: Government
Related News: Minister sees cooperatives and MSMEs as drivers of economic recovery