Govt vows to strengthen small firms

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)