Funding planned for small and medium businesses

JAKARTA (JP): The Office of the State Minister of Research and Technology plans to launch next year a three-year funding scheme to help empower selected small and medium-scale industries across the country, an official said here on Monday.

Speaking at a media conference, Freddy P. Zen, the assistant to the deputy minister of science and technology necessity analysis, said the scheme, called the Incentive System to Develop Technology and Management, would be coordinated by the local administrations, research institutions, universities, non- governmental organizations (NGOs) and several other organizations.

According to Freddy, the program will not only provide money but also information and assistance on raw material supplies, production systems, distribution management and strategies and waste management.

In the first year of the scheme, the office of the state minister will provide some Rp 1.12 billion (US$132,350) to industries in West, Central and East Java, West Sumatra and West Nusa Tenggara.

"(The scheme will begin in these locations) because the industries have already developed, meaning they don't need much financial help," Freddy said.

The funds for the next two years will be slightly reduced, based on the assumption the industries will have already begun seeing some profit after receiving the first-year assistance.

Freddy said the money would not be distributed via the local administration offices, but through local universities.

"We won't distribute it through local administrations because, honestly, we're afraid the fund will be corrupted," he said.

A special team, Freddy added, will be formed to continuously monitor and evaluate the scheme.

The type of small and medium-scale industries to be included in the scheme varies, ranging from garment manufacturers to fisheries.

"They are businesses with a lot of potential. Their only problems are a lack of science and technology knowledge, and also a lack of assistance from local institutions and universities," Freddy said.

The woven cloth industry run by locals in Wanarejan village in Pemalang, Central Java, for example, is quite developed with some 1,000 people employed in the industry.

"Their products have even been exported to countries in the Middle East, Africa and Southeast Asia," Freddy said.

The problem is that the machines are quite expensive, so the residents still have to use their 70-year-old machines thus cutting production.

"But a small industry is not necessarily a low-tech industry. The metal industry in West Java, for example, is very high tech," Freddy said.

The subsidies for small and medium-scale industries, he added, hopefully can help the economy recover.

"Right now we're applying for presidential aid in order to cover more regions, including the eastern part of Indonesia," he said. (09)