Small enterprises

Small enterprises

The House of Representatives has finally approved a bill that will empower and protect small and medium-size enterprises. The bill was introduced in the House last July, and took only a few months to be approved.

As pointed out by Minister of Cooperatives and Small Enterprises Subiakto Tjakrawerdaya, once enacted into law by President Soeharto, it will provide a more conducive business climate for small firms to grow and develop. The development is most welcome in a country where more than 30 million enterprises make up the backbone of the economy.

When our founding fathers assembled in 1945 to write our Constitution, they did not envision a capitalistic society. Their vision was embodied in Article 33, which states that "the economy shall be organized as a common endeavor based upon asas kekeluargaan (the principle of the family system)".

The Constitution explained that the economy was to be "based upon economic democracy" with "prosperity for everybody." The vision resembles the Gas and Water Socialism of the Fabian Society, a European concept which may have influenced our founding fathers. Many were being educated there when the idea of social democracy was gaining ground.

Implementing that vision, however, has not been made any easier by 50 years of frustrated debate and poorly-designed policies. Another constraint is how to properly define an economic democracy vis-a-vis a family system, where the State has the controlling power. There has always been a tendency to avoid juxtaposing the two concepts, when we should be investigating where they contradict each other to find a solution.

The country's small and medium-size enterprises have suffered from this long debate. We have had to wait for 50 years before our representatives could even formulate the definition of a small enterprise. Even though their performances are not distinctly and sufficiently reflected in official statistics, they too are members of the family system mentioned in the Constitution. When one talks about economic democracy, they are some of the most important constituents.

One member of the House rightly pointed out that this new law could end up being more political rhetoric. Implementing the law will take strong political will, since many measures before did little to develop small businesses.

It is time that Article 33 be given a more realistic formulation of what we mean by the family system, economic democracy, and prosperity for everybody. It is about time as well to constitutionally define when and where monopolies, oligopolies and monopsonies are beneficial to the people, and when and where they are absolutely not so.

Small enterprises have survived and have supported this country for the last 50 years. They are not begging for help or special favors. What they need is a conducive business climate so they can contribute more to the country.