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