President endorses law on small-scale companies

President endorses law on small-scale companies

JAKARTA (JP): The long-awaited bill on small enterprises was passed into law by President Soeharto yesterday.

"With the law we now have the legal base to empower small- scale enterprises to become more independent and more powerful to meet global competition," Minister of Cooperatives and Small Enterprises Subiakto Tjakrawerdaya said here yesterday.

He reported that the current number of small businesses in the country is 33.4 million, including 44,379 cooperatives.

The new law defines small enterprises as those with assets of no more than Rp 200 million (about US$87,000), excluding buildings and land, and with annual sales revenues of up to Rp 1 billion. It also specifies small enterprises as those owned by Indonesian citizens and not affiliated to bigger companies.

The law also mandates the cooperation of large companies in helping small enterprises to become medium-scale businesses, Subiakto said.

He said that the government will soon issue related regulations to complement the law, which was endorsed by the President on Tuesday to take effect immediately.

The date of the endorsement coincided with President Soeharto's 48th wedding anniversary.

Subiakto acknowledged that the crucial problems faced by small businesses are mostly related to access to market and capital sources.

He said that next year he will promote the development of entrepreneurship among cooperatives and small businesses, which are expected to become pillars of the country's economy.

He added that the ministry hopes to promote the growth of at least 50,000 small businesses next year.(kod)