Uniform criteria needed for small enterprises

Uniform criteria needed for small enterprises

JAKARTA (JP): The slow pace of small enterprises is attributed
to lack of coordination among related governmental institutions
and the different criteria given to them, an official said
yesterday.

Soeharto Prawirokusumo, an expert assistant to the
Coordinating Minister for Economy and Finance, said at a one-day
seminar on small enterprises, there are, for example, no uniform
definitions and criteria of small businesses in Indonesia.

The definition given by Bank Indonesia (the Central Bank)
states small enterprises are those with a working capital of no
more than Rp 600 million (US$275,000), excluding land and
buildings.

"For other government institutions, companies with such a
criterion are regarded as medium entities," Soeharto said. "So,
by definition, it suggests that many bank credits allocated for
small enterprises have actually gone to larger entities."

Governor of Bank Indonesia, J. Soedradjad Djiwandono, said
credits extended by banks to small businesses as of last June
reached Rp 31 trillion ($14.3 billion) or 26 percent of their
total credits, exceeding the government-set target of 20 percent.

Soeharto suggested the government introduce uniform criteria
for small enterprises to prevent "free riders" from using
facilities given especially to small businesses.

Coordinator

He also proposed the government form a special policy
coordinator to promote the development of small business
enterprises, in which many related institutions are represented.

"The establishment of such a policy coordinator is timely
because our current, discreet treatments for small enterprises
have proven to be ineffective," said Soeharto, addressing the
seminar organized by his office, in cooperation with Konrad
Adenauer Foundation of Germany.

Kai M. Schellhorn of Konrad Adenauer said Indonesia could
learn from other countries which put small businesses at the
forefront of their economy building.

"The economy of modern industrialized countries relies on
small and medium enterprises. In this way, there is no way for
conglomerates to be formed anymore," Schellhorn told The Jakarta
Post.

He said early next year his foundation will cooperate with the
Hasanuddin University in Ujungpandang, South Sulawesi, to conduct
an advisory project for small and medium enterprises.

Latanro, chairman of the Center for Small-Scale Enterprise
Development at the Hasanuddin University, said the cooperation is
expected to boost the growth of small and medium businesses in
eastern provinces.

"We hope that small and medium enterprises will be the prime
mover of economy in the eastern part of the country," Latanro
said. (rid)