Small, medium scale firms survive crisis

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)