Government urges developers to provide spaces for SMEs

To accelerate the development of small and medium enterprises (SMEs), the government is urging the developers of industrial estates to provide spaces for small businesses in their properties.

State Minister of Cooperatives and Small and Medium Enterprises Suryadharma Ali said SMEs made a vital contributions to manufacturing and should be given spaces at industrial estates.

"SMEs play a vital role in supporting large manufacturing businesses. It would be great if they were allowed to operate at the industrial estates close to companies they support," Suryadharma said. He proposed developers allocate some 20 percent of their land to SMEs.

Indonesia has more than 42 million SMEs, contributing more than 50 percent of the country's GDP.

Earlier, Minister of Industry Andung Nitimihardja also suggested that developers of industrial estates give incentives to SMEs by offering them spaces at affordable prices.

A report from property consultant company Procon Indah shows that rental prices for warehouse buildings at industrial estates in Greater Jakarta and Banten stood from between Rp 15,000 and Rp 25,000 per square meter a month and for standard factory buildings at Rp 25,000 to Rp 50,000 per square meter a month.

General manager for business development of Jababeka Industrial Estate Rudy Sentosa said that his company had signed an agreement with the Ministry of Cooperatives and SMEs to allocate spaces for SMEs in its area.

"Under the agreement, signed on April 6, Jababeka agrees to allocate 15 hectares for 300 medium enterprises and 150 small enterprises. It is expected that these SMEs will connect to large enterprises operating in our estate," he said.

Jababeka has more than 3,000 hectares with over 1,100 large manufacturing companies operating there.

Indonesian Industrial Estate Association executive director Fahmi Shahab said the main issue was not how much land should be allocated for SMEs but what the government would offer the developers to support SMEs.

"If the government asks the developers to set special prices for SMEs, will it subsidize the construction and maintenance costs?" he told The Jakarta Post.

"I think the best way would be for the government to develop specific estates for SMEs, either within existing industrial estates or nearby. The government can't put the burden on the developers." The association would organize a forum to discuss the issue in September, he said. (006)