Kadin begins campaign to help indigenous businesses

JAKARTA (JP): The Indonesian Chamber of Commerce and Industry (Kadin) has begun a campaign to lobby for support from the central bank, large conglomerates and the government to boost small businesses owned by indigenous entrepreneurs.

"We cannot deny that, in spite of the government's efforts, the gap between small businesses and conglomerates has increased," Aburizal Bakrie, Kadin chairman and owner of the Bakrie Group, told 800 participants of a seminar sponsored by the Chamber of Commerce here yesterday.

Indonesia's largest corporations are predominantly controlled by ethnic Chinese tycoons, who often have strong political and financial support. The ethnic Chinese comprise about 3.7 percent of Indonesia's 186 million population.

Kadin's seminar was held one day after Presidential Decree No. 16/1994 on the implementation of state budgets, which aims at promoting small businesses and indigenous entrepreneurs, was announced.

Aburizal, often fondly referred to as "Ical," aired his support for the decree. "This is the right move for the government," he said.

Definition

According to the decree, indigenous small- and medium-scale enterprises are defined as those run by "indigenous Indonesians and other ethnic groups which have integrated with indigenous Indonesians."

The decree allows anyone who falls into that category to participate in government projects worth no more than Rp 200 million (US$95,000). Prior to this ruling, those projects were inaccessible to them.

Aburizal insisted that small- and medium-sized enterprises need greater access to credit, markets and information.

"These must be made more accessible soon," he said.

The tycoon also said that lending procedures for indigenous entrepreneurs must be relaxed, discounted rates must be offered and Bank Indonesia -- the central bank -- must award credit points to commercial banks that provide loans for them.

Aburizal also said that Kadin wants to set up a clearing house that will channel loans, mainly those derived from the one-to- five percent portion of state companies' net profits, to small- and mid-sized enterprises.

He also stated that large conglomerates should finance this clearing house on a voluntary basis. "We will not force them," he said.

He also plans to deliver these ideas to the government, including the central bank.

Aburizal said he is confident that the government will support Kadin's campaign. (04)