A craftsman works on a decorative light in Tangerang on January 5, 2021. (SP Photo/Ruht Semiono)

Indonesia Calls for Collaboration on MSMEs, Climate Change in Asia-Pacific

NOVEMBER 15, 2021

Jakarta. Indonesia is calling on the Asia-Pacific region to strengthen partnerships in empowering micro, small and medium enterprises —or MSMEs— as well as combating the climate crisis in a sustainable manner.

President Joko “Jokowi” Widodo announced the need for such collaboration at the Asia-Pacific Economic Cooperation (APEC) Business Advisory Council (ABAC) summit last Thursday.

“In a forum on inclusivity and sustainability, the president called for Asia-Pacific countries to strengthen partnership on two important matters,” Communications and Informatics Minister Johnny G. Plate said in a written statement on Sunday.

“First is to spur an economic recovery via an inclusive MSME empowerment. Second is to manage the impact of climate change in a sustainable manner," he said.

Johnny added, MSMEs’ bounce-back has proven to be a boon for Indonesia’s economy and community empowerment. A multi-party collaboration is also necessary when addressing climate change to ensure its handling goes alongside socio-economic development.

Inclusive MSME Empowerment

Empowering MSMEs is crucial for an inclusive economic recovery.

The MSME sector not only serves as a safety net for the low-income communities, but also greatly absorbs the workforce.

In 2019, MSMEs made up about 52 percent of the GDP in the Asia-Pacific, and absorbed about 50 percent of the workforce.

MSMEs also play a pivotal role in providing inclusive job opportunities and bolstering women empowerment in Indonesia. The government reported that women represented 64 percent of the country’s MSME sector.

“We are also aware how MSMEs serve as the backbone to Indonesia’s economy. This is why the government truly gives its support, be it in the form of programs, policies, funding, or assistance to help MSMEs bounce back from the pandemic,” Johnny said. 

At the forum, President Jokowi said financial inclusion is also a priority.

Indonesia has provided soft loans and assistance of more than $4 billion to 17.8 million pandemic-affected MSMEs and small individual businesses in 2021.

The government is intensifying its efforts to digitally transform the MSMEs amid the pandemic. About 8.4 million MSMES in Indonesia are now in the digital ecosystem. Of which, 54 percent are women-owned businesses.

MSME digitalization in the Asia-Pacific region will certainly pick up pace — if coupled with digital infrastructure development, the broadening of an inclusive digital connectivity, and a boost in the sector's digital literacy. 

Sustainable Climate Change Management

Johnny said, “the president highlighted how climate change handling must go in line with the community socio-economic development, in hopes to achieve the sustainable development goals.”

Forest and marine conservation, as well as renewable energy transformation must improve the welfare of the lower-class communities. The transition towards a low carbon economy must also take place in a fair and collaborative manner, according to Johnny.

Financing and environmentally-friendly technology transfer are also essential in supporting climate actions in developing countries.

Sustainable and green industries investment is among Indonesia's top priorities. Indonesia's prioritized projects include the development of a green industrial park, battery and electric vehicle supply chain, as well as carbon trading.

According to Johnny, the president has encouraged investors and businesses to bolster ties and tap into Indonesia's great potential.

“Indonesia has an abundance of potential in both natural resources and workforce. With strategic and wise use, it will bring an optimal benefit for our nation and the global population by prioritizing the environment and sustainability,” he said.

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