Indonesia should nurture the growth of companies as well as entrepreneurs as they could contribute to "miracle" growth in the future, a noted economist said Monday.
Speaking at a ceremony inducting him as a professor of economics at Prasetiya Mulya business school, where he is also executive director, Djisman said the decreasing number of new enterprises in the years since the economic crisis had led to a steady decline in the country's economic growth.
"The lack of enterprises has been one of the weak points of Indonesia's economy," said Djisman.
He said the economy grew robustly from 1986 to 1996, when the number of small and medium enterprises (SMEs) increased by an annual average of almost 6 percent, while growth rates were low in the period between 1997 and 2005, when the number of SMEs decreased by an average of 1.1 percent per annum.
Djisman said raising the number of companies required improvements in security, social and political stability, law enforcement and freedom in doing businesses.
He said in order for the number of companies required to support sustainable growth to appear an increase in the number of entrepreneurs was also required.
"The main problem of the country's backwardness in economy also stems from its lack of entrepreneurs," he said.
Therefore, he said the country needed to nurture the development of both SMEs as well as entrepreneurs, among others, through easy access for SMEs and better education that would create entrepreneurs.
Speaking at the opening ceremony, Harry Tjan Silalahi, co-founder of the Centre for Strategic and International Studies, said Djisman had brought the idea of a socialistic economy with an open market system into the country.
"Within this globalization era, the Indonesia's economic growth has been left behind compared to other countries. The country can't be a player in the business world as we don't have good enough human resources," he said.
He said that Indonesia needed to develop its international trade to advance its economy.
"Singapore and Japan are examples of countries which don't have natural resources but which have become advanced countries because of their trading activities."
Djisman also said that the government could benefit from the participation of foreign enterprises in speeding up economic growth.
"Taking advantage of foreign enterprises is one of the responses to cover the lack of local entrepreneurs and the weakness of market networking," he said.
Djisman added that the country's proximity to countries like China, India and Vietnam could also open an opportunity to propel its economic growth.
"The comparative advantages of a country will change over a period of time. If those advanced Asian countries focus on the development of science-based industries like telecommunications and information technology, robotics, or pharmacy, then they should abandon the current industries they have been focusing on, and that's where Indonesia can now focus," said Djisman. (rff)
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