Small is beautiful

Small is beautiful

Credits appear to have become available at almost bargain
rates for small and medium-scale businesses lately. Last Friday,
for example, the government launched 14 new credit schemes for
these two particular business sectors.

The government obviously has its reasons for "spoiling" small
and medium-scale businesses. This policy, however, should be
taken to mean that the government is disallowing big business
conglomerations. The small-scale business sector, which during
the New Order era was regarded as a burden for the economy, is
now seen instead as a savior since it is capable of absorbing
close to 90 percent of the Indonesian workforce. Small and
medium-scale businesses are taking the place of big business as
the engine that drives economic growth.

The preferential treatment that is at present being given to
small and medium-scale business cooperatives cannot be separated
from the personality of Adi Sasono, who is known as a champion to
these two groups. Irrespective of who leads the ministry in
charge of these two business sectors, however, we should give our
support to any effort that is made to promote them.

One major reason already mentioned is that they are capable of
absorbing great numbers of workers. Another is that they are more
resilient in the face of economic crises. Actually, more could be
done to help them, for instance by reviewing the tax regulations.

It was decided lately that small businesses in the services
sector would be required to pay 10 percent in value-added taxes
as soon as their turnover reaches a minimum of Rp 120 million a
year. The limit is Rp 240 million for businesses in the
production and supply sectors. Raising those limits would
certainly further help our small businesses.

-- Bisnis Indonesia, Jakarta