High costs hurt small enterprises: U.S. senator

JAKARTA (JP): United States Senator Christopher Bond suggested yesterday the Indonesian government eliminate the country's high business costs to stimulate the growth of small enterprises.

Abolishing various "contributions" and illegal fees would be the first step to creating a conducive atmosphere for small entrepreneurs, Republican Senator Bond said in his address to a luncheon held by the United States Committee of the Indonesian Chamber of Commerce and Industry.

"The first thing the government should stop doing is creating unnecessary burdens," he said.

Bond, the chairman of Congress' committee on small business, attended yesterday's luncheon with Senator Bill Frist. The two were on a three-day visit to Jakarta to meet government officials and businesspeople.

They met President Soeharto earlier yesterday.

Bond suggested the government get small entrepreneurs together to find out the problems they faced in business. The more input the entrepreneurs provide, the better the government can help them, he said.

"The businesses shouldn't be asking the government how to produce things... The government only taxes and regulates," he said.

"The ones who best know the business are the entrepreneurs themselves," he said, adding that entrepreneurs would develop best if the government sets up clear regulations and policies.

Minister of Cooperatives and Small and Enterprises Subiakto Tjakrawerdaya, who attended the luncheon, said the government was trying to cut back high economic costs.

"Our deregulation measures and campaigns against illegal fees are part of our effort in that direction," Subiakto said after the luncheon.

While acknowledging most of Bond's suggestions, he disagreed with Bond's proposal to limit the government's role in developing small businesses.

He said the government should be "actively involved" in promoting small enterprises and not just content with the mere role of taxing and regulating.

"The government has a duty to assist small businesses," he said.

Small businesses employ more than 84 percent of the total work force and contribute almost 38 percent to gross domestic product, Subiakto said.

The country's 34 million or more small enterprises mostly engage in agriculture (63.1 percent), trade (17.4 percent) and processing industries (7.5 percent).

Almost 91 percent of small-scale entrepreneurs have no more than an elementary education, and 9 percent have finished junior high school.

Kirsten Edmondson, an International Republican Institute program officer, said yesterday the Washington-based institute was planning to launch a program to help small businesses in Indonesia.

She told The Jakarta Post the program would involve partnerships between the institute, the Indonesian government and small-scale entrepreneurs.

The program would bring together American business experts, business-association members, the Indonesian government and small-scale entrepreneurs.

The program would focus on sharing experiences, discussing the challenges faced by small-scale entrepreneurs and finding ways to address them.

"The small businesses will be expected to tell what they expect from the government... Their input will be particularly valuable for the upcoming deregulations that the government will be issuing next year," she said.

Edmondson said the program, to be funded by donations from private U.S. businesses and a congressional endowment, would be launched in January and last from three to five years. (pwn)