Creative Economy Minister: War Erupts, MSMEs Could Become a Pillar of Indonesia's Economy

Jakarta, CNBC Indonesia - Creative Economy Minister Teuku Riefky Harsya says that the micro, small and medium enterprise sector (UMKM) and the creative economy can become the backbone of Indonesia’s economy amid rising global geopolitical tensions, including conflicts in the Middle East. He noted that global geopolitical dynamics cannot be viewed as issues distant from people’s lives; conflicts in various regions can affect global economic conditions and living costs domestically. ‘Geopolitical situations, including conflicts in the Middle East, can certainly affect the national economy. Therefore, we must strengthen the domestic economy,’ Harsya said during remarks after the Emak-Emak Matic programme achievements report event in Jakarta, Wednesday, 4 March 2026. He said one of the strategies promoted by the government is to strengthen the creative economy and UMKM so that they can become the backbone of the national economy. He added that the sector has previously proven able to endure and support the economy during crises, including the pandemic. ‘And of course, with the backing from all parties — the central government, local governments, the national private sector, banks, academics, the mass media and associations — we will face a situation that may disrupt the national economy,’ he said. In addition to strengthening the domestic market, the government also sees export opportunities for Indonesian creative economy products to global markets, including the Middle East. Harsya noted that several sub-sectors of the Indonesian creative economy, such as culinary, fashion and crafts, have great potential to penetrate the growing Middle East market. ‘The culinary sub-sector and the Indonesian fashion creative sectors are now already penetrating the Middle East market in sizeable numbers,’ he said. Nevertheless, he emphasised that strengthening the domestic market remains the top priority. The government wants to ensure the domestic market is filled with locally produced goods from Indonesian creative entrepreneurs. ‘The most important thing is ensuring that our domestic market remains strong and filled with local products, whether fashion, culinary, or other creative products,’ Harsya said. Minister Harsya also highlighted the importance of improving digital literacy among entrepreneurs so they can utilise digital platforms to expand markets and increase sales. He believes that digital training, as part of a government-private sector collaboration programme, can help small businesses build capacity and broaden economic opportunities amid global uncertainty.