Small, medium scale firms survive crisis

YOGYAKARTA (JP): Small and medium scale businesses have survived well during the prolonged monetary and banking crisis, despite the absence of financial aid from multilateral creditors, the head of Yogyakarta's Association of Economic Scholars (ISEI) said here on Sunday.

Arief Ramelan Karseno told a press conference at the Yogyakarta Garuda Natour Hotel that the national economic meltdown, had even encouraged the small and medium scale businesses -- run by the private sector -- to find ways to grow.

"Small and medium scale enterprises have almost nothing to do with the monetary and banking crisis," he said.

The uncertainty of the International Monetary Fund's (IMF) loan disbursement to the government has indirectly encouraged the small and medium enterprises to boost their exports, Karseno, lecturer at Gadjah Mada University's school of economics, said.

Also present at the press conference were senior economist Dibyo Prabowo and Mubyarto from Gadjah Mada University.

Karseno also said that the government's efforts to liberalize the economy had encouraged self-sufficiency and confidence among the small and medium scale enterprises.

"It's true that the rupiah has sunk to a low level against foreign currencies especially the U.S. dollar, but in fact the inflation rate in 2000 was only 9.3 percent because the national stock of basic goods was sufficient. This means that the real drop in the rupiah's value domestically was only 9.3 percent," he said.

He criticized other fellow economists, who often expressed pessimism and underestimated the national economy, ignoring the real people's economy.

Karseno said that the lingering monetary crisis in the country had been engineered by the central bank officials, who wanted to undermine the government.

"History tells us that Bank Indonesia has always been used (by politicians) as a tool against their rivals," he said.

Large scale businesses, which had enjoyed protection under the previous regime had been the most-affected sector in the ongoing crisis.

Meanwhile Mubyarto said that the small and medium scale enterprises had demonstrated their vigor during the crisis, therefore the government must make real efforts to promote them and review its plan to seek more loans.

"If we trust the strength of the people's economy, I think economic recovery will be well on its way. New foreign loans may be unnecessary," he said. (44)