Govt vows to strengthen small firms

JAKARTA (JP): President Soeharto said here yesterday that the government will further develop small and medium-scale enterprises (SMEs) into a stronger economic force in the next 25 years under the country's second long-term development program.

Soeharto said that the role of SMEs is still relatively weak even though there has been an improvement in the structure of the country's economy.

Speaking in his address at the opening of the 21st International Small Business Congress (ISBC), Soeharto said that the government has taken a number of measures to develop SMEs so that they would not only provide more employment but would also become an important pillar in the country's economy.

"Improving entrepreneurial skills through intensive training programs is one of important measures in developing SMEs in the country," he told the congress, attended by over 700 participants from 38 countries.

Speakers at the three-day meeting included Singaporean Deputy Prime Minister Lee Hsien Loong, a senior official of the United Nations Conference on Trade and Development, Masataka Fujita, and a number of local and foreign economists.

A number of Indonesian ministers, including State Minister for Environment Sarwono Kusumaatmadja, Education and Culture Minister Wardiman Djojonegoro and Minister of Cooperatives and Small Enterprises Subiakto Tjakrawerdaya.

Soeharto said the government has also encouraged the transfer of technology through partnership approaches such as sub- contracting systems to help improve the technology capability of small businesses.

Fund

"Fund mobilization through venture capital and state-owned companies is also one of the government's important approaches in promoting the role of small businesses," he said.

The ISBC has been held for over the last two decades. The 20th ISBC was hosted by Japan, while Australia is likely to become the venue for the next congress in 1995.

Soeharto said the development of small businesses in Indonesia is increasingly important to help solve unemployment problems.

"Development will only be sustained if developing countries are able to solve their employment problems," he said.

Soeharto said that the structure of the Indonesian economy is shifting from traditional farming to the broad-based industrial sector.

The contribution of the industrial sector to the country's gross national product (GNP) significantly improved to over 22 percent last year from only around 9.2 percent in 1969, Soeharto said.

He said that the structure of job opportunities is also shifting to the industrial sector and services from the agriculture-based activities.

The President said that the labor force working in the agricultural sector declined to around 50 percent in the 1990s from around 64 percent in the 1970s.

He said that Indonesia has recorded a remarkable achievement in its export activities during the past five years and that it will further promote its export drive through a more intensive campaign both at home and overseas.

Soeharto said that the free trade arrangements under the Uruguay Round accord will not only create bigger export opportunities but also fiercer competition.

"Indonesia, therefore, has to promote the quality of its products to enable it to compete in the overseas market," he said. (hen)