Sunday, December 3, 2023

MSMEs Only Account for 15 Pct of Indonesian Exports

Jayanty Nada Shofa
August 14, 2023 | 11:59 pm
Fishery MSME owner Ida packs her products in West Sumatera on Aug. 13, 2023. (Antara Photo/Iggoy el Fitra)
Fishery MSME owner Ida packs her products in West Sumatera on Aug. 13, 2023. (Antara Photo/Iggoy el Fitra)

Jakarta. Micro, small, and medium enterprises (MSMEs) only account for 15 percent of Indonesian exports despite the country having the most businesses of such scale in the ASEAN region, according to Foreign Minister Retno Marsudi.

Indonesia is home to at least 64 million MSMEs. This is equivalent to around 90 percent of the MSMEs across the ASEAN region. Despite the huge MSME population size, not many of them are shipping out their goods abroad. Indonesia is also falling behind other ASEAN members like Malaysia and Thailand when it comes to MSME exports.

“President Joko Widodo is keeping a close eye on MSMEs as they are the backbone of our economy. We have the most MSMEs compared to other ASEAN nations. However, Indonesian MSMEs only contribute 15 percent of the total exports. MSME exports are far higher in Singapore, Malaysia, and Thailand,” Retno said in Jakarta on Monday.

The surprisingly small number of MSME exporters prompted the government to find ways to help small businesses get exposed to the global market. The Foreign Affairs Ministry has just inked a memorandum of understanding (MoU) with its finance counterpart on economic diplomacy. The MoU puts emphasis on helping Indonesian MSMEs go global.


“The foreign affairs and finance ministries can map out a strategy to help Indonesian businesses, particularly MSMEs, penetrate the global market. I hope our diplomatic missions can conduct assessments and market intelligence in a comprehensive manner, including on opportunities for our MSME products,” Retno said.

“The Finance Ministry can supply us with data on potential MSMEs that we can curate together …  to make sure their products are ready for export. We will then synergize the data and push for the implementation,” she added.

The government revealed last year that MSMEs’ share of the total export value amounted to 15.65 percent. Indonesia is seeking to boost these figures to 17 percent by 2024.

According to a 2020 Asian Development Bank (ADB) report, Thailand has the biggest percentage of MSME contribution to its total exports in 2018, with a share of 28.7 percent, followed by Malaysia (17.3 percent) and Indonesia (14.4 percent).

The report, however, did not include the export data on Singaporean MSMEs. Malaysia had 907,065 MSMEs as of 2015, while Thailand had around 3.08 million MSMEs per end-2018. Singapore had 271,800 SMEs as of 2019.

Read More: Indonesia Aims Stronger Ties with Thailand to Bolster Rubber Prices

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