Businessmen lament low growth of small business

Businessmen lament low growth of small business

JAKARTA (JP): Several indigenous businessmen said yesterday
that few Indonesians in small business had expanded their
businesses because it was so difficult.

"I think we need to give them a special instrument to
accelerate their development so that more of them become
qualified and reliable businesspeople," Fadel Muhammad, the
president of PT Bukaka Teknik Utama, told a discussion on the
small business outlook for 1997, organized by the Indonesian New
Entrepreneurs Forum.

He said that, despite the government's regulations on the
development of small-scale industries, those in small business --
mostly indigenous Indonesians -- still needed special assistance.

"What I am saying is it's like me and my small children
walking to a gate in an airport. If I go there by an escalator,
while my small children just walk along an adjacent path, I will
arrive at the gate much faster than my children. But if my
children use the escalator, while I don't, we will arrive at
about the same time," he said.

Fadel said that this analogy happened in business: "That's my
view and it's up to the government to formulate it into a
regulation that will create a conducive condition for the small
ones to grow," he said.

He said that small business, particularly new small
businesses, did not have enough strength to develop. But big
business, dominated by Chinese, was already strong and did not
need any special instruments.

He said the development of small business, which engaged 33.4
million people or 17.6 percent of the country's population, would
help the country compete internationally.

Iman Taufik, a chairman of the Indonesian Chamber of Commerce
and Industry, said that a regulation could be made to require
certain big business to adopt subcontracting schemes.

He said that, under a subcontracting scheme, big automotive
companies, for instance, would subcontract small businesses to
manufacture components.

He said the government should arrange training programs for
small businesses to help them expand.

Iman said that a subcontracting scheme would also encourage
banks to lend more to small business because their loans would be
guaranteed.

He said most small businesses had trouble getting credit from
banks. "But I think through subcontracting the banks would see
that it was safe to give them credit," he said.

Tjahjono Soerjodibroto, a director of the state-owned Indosat,
suggested the government provide market information on all
products in all provinces. "Every province here produces and
needs certain goods. If we provide the information to small
business we will help them expand," he said.

"Market information is a very important factor in developing
small businesses. But, in fact, most of them have no access to
such information," he said.

He said that small business was important in improving the
country's competitiveness.

During the discussion, several of the forum's members warned
that if the government did not pay serious attention to the
development of small business then big business' domination would
be maintained in future by the tycoons' children. (bnt)