Small businesses needs empowering, researcher says

Small businesses needs empowering, researcher says

JAKARTA (JP): The government should empower small-scale
entrepreneurs to build a strong base for the nation's economy, a
scholar said yesterday.

Cornelis LAY of the Yogyakarta-based Gadjah Mada University
told a discussion titled Islam and Nationalism: The Present
Reality and Future Portraits that inadequate attention had been
paid to small businesses.

"The lack of attention, from the economic point of view, is
not because the sector has failed to give its real contribution
but rather because it is difficult to measure its real
contribution," he said.

Cornelis said that as long as the methodology to measure
economic progress or setbacks focuses on the aggregate economy,
the small scale economy, which by nature is partisan and
informal, would be disadvantaged.

The Canada-trained political scientist said the so-called
"people's economy" would play a crucial political and social role
in the future.

Cornelis cited how the expansion of the so-called "black-
market economy", which is largely controlled by small-scale
entrepreneurs in Jakarta "has contributed immensely to overall
national economic growth".

"This sector has reportedly made a substantial contribution to
the economy in Latin America," said Cornelis, who is also a
social studies researcher at the Inter-University Center at
Gadjah Mada University.

The members of the sector, according to Cornelis, fulfill five
functions; they are providers of recyclable materials, producers
of cheap goods, consumers of mass-produced articles, salespeople
and -- especially in Jakarta -- they make up a reservoir of cheap
labor.

Jakarta

In Jakarta, the sector's presence is particularly demonstrated
by more than 400,000 scavengers.

"They have taken the position as suppliers for the formal
sector production process," Cornelis said. "The 'fleet' of
scavengers has also made themselves the powerhouse for the
billion-rupiah recycling business."

"By doing this they have also made themselves environmental
workers."

Touching on the issue of how nationalism could help empower
the small-scale economy, Cornelis said: "If we agree that
discrimination undermines nationalism, then we should eradicate
it. This should be realized by introducing policies which give
the formal and informal sectors equal treatment."

"People's equal access to banking services, and other
important economic facilities, like locations to do business in
Jakarta, are important," he said.

Street vendors in Jakarta have often become victims of
government policies and street hoodlums who get the backing of
powerful people in the bureaucracy. (aan)