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)