Promoting small-scale businesses

As reported by Kompas (June 29), the Indonesian Chamber of Commerce and Industry (KADIN) has inaugurated PT UKM, which will assist small- and medium-scale businesses (UKM) in expanding their markets by raising product quantity and quality, as well as by maintaining production continuity.

Though assistance may be offered to UKM by many parties, it lies with the government, as an agent of development, to promote UKM, as the Malaysian government has done in the initial phases.

It has become public knowledge that state banks are reluctant to provide loans for UKM due to the lack of collateral, but there have been some improvements lately. Besides, other state insurance institutions can also help, such as Askrindo and ASEI.

Government agencies abroad, like embassies and their trade attaches, Indonesian Trade Promotion Center, the National Agency for Export Development and UKM cooperatives, can help find marketing breakthroughs. So why should KADIN call for the assistance of entrepreneurs?

Fears exist of the recurrence of the New Order system of "foster parenting", in which the businesses being fostered were left in a worse condition, while the parent companies thrived. Are our entrepreneurs strong enough today to perform the task?

How many companies already have an established position abroad to do the promotion job? We still face a variety of domestic corporate issues as yet unresolved, so overseas assignments beyond private capacity should be avoided.

Meanwhile, the Association of Exporters and Producers of Indonesian Handicrafts (ASEPHI) annually organizes INACRAFT exhibitions to boost this trade; the number of UKM participants rose to 650 members in April 2004 from only 150 in 1999, with a lot of local and foreign orders secured.

As a member of KADIN, ASEPHI appreciates the role of KADIN, while striving for the proper functioning of this chamber according to the mission intended by national entrepreneurs.

RUDY LENGKONG ASEPHI Central Board Chairman Jakarta