Minister: Import Substitution Policy Aims to Strengthen Local MSMEs

In a statement released by Minister of Cooperatives and SMEs Teten Masduki on Tuesday (24/10/23) Indonesia’s import substitution policy is one of the four economic policies aimed at strengthening locally-made products, including those produced by Micro, Small, and Medium Enterprises (MSMEs), according to reporting from Antara News.

“The President has even affirmed that 40-percent of the state budget (APBN) spending will be allocated to purchase domestic products from MSMEs,” he said.

Through the import substitution policy, Indonesia will no longer need to import products if it can make them to meet domestic needs, Masduki stated, adding that products made by foreign companies in Indonesia should have a domestic component level of 40-percent. They are also obligated to partner with local business players, say Antara News.

The second policy to protect local business players is the downstreaming and industrialization of natural resources.

Masduki emphasized that the policy is not only for large-scale business players, but must also involve local MSMEs.

“This policy also prohibits the export of raw mining products; they must be processed domestically to increase added value and create jobs,” he said.

The third policy is improving MSMEs’ access to financing as the current share of banking credit for MSMEs is only 21-percent, which is far lower when compared to Thailand and Malaysia, where it is already above 40-percent, say Antara News.

The fourth policy pertains to digital transformation, which regulates four aspects: platforms for businesses, the flow of imports of consumer goods, the trading system, and the competitiveness of domestic MSME products.

Antara News report that Masduki suggested Indonesia learn from China’s strategy in implementing digital transformation policies. China has been able to strengthen its digital economy platforms and prevent foreign platforms from dominating its market.

However, the government policies to protect MSMEs and domestic products from the influx of cheaper products are often seen as anti-innovation and anti-technology, he noted.

“In many countries, technology has been regulated, one of which is related to the transparency of algorithms and data on the platforms,” he added.

 

Source: Antara News

Stock photo by Aditya Wardhana on Unsplash

Latest Article
ADB Forecasts Growth in Asia-Pacific
Tempo is reporting that the Asian Development Bank (ADB) forecasts economic growth in the Asia-Pacific...
Ministry: Limiting Electronic Imports Supports Domestic Businesses
Indonesia’s Ministry of Industry hopes that new regulations on the import trade in electronic products...
President Signs Decree on FATF
According to reporting from Antara News, President Jokowi has signed Presidential Decree Number 14 of...
Nvidia and Indosat to Build AI Center in Indonesia
Data Centre Dynamics is reporting that Nvidia and Indosat Ooredoo Hutchison (IOH) have partnered to build...
Indonesia, Germany Sign MoU for Industrial Vocational Training
Head of Indonesia’s Industrial Human Resources Development Agency (BPSDMI,) Masrokhan, said on Thursday...

Andrzej Barski

Director of Seven Stones Indonesia

Andrzej is Co-owner/ Founder and Director of Seven Stones Indonesia. He was born in the UK to Polish parents and has been living in Indonesia for more than 33-years. He is a skilled writer, trainer and marketer with a deep understanding of Indonesia and its many cultures after spending many years travelling across the archipelago from North Sumatra to Irian Jaya.

His experience covers Marketing, Branding, Advertising, Publishing, Real Estate and Training for 5-Star Hotels and Resorts in Bali and Jakarta, which has given him a passion for the customer experience. He’s a published author and a regular contributor to local and regional publications. His interests include conservation, eco-conscious initiatives, spirituality and motorcycles. Andrzej speaks English and Indonesian.

Terje H. Nilsen

Director of Seven Stones Indonesia

Terje is from Norway and has been living in Indonesia for over 20-years. He first came to Indonesia as a child and after earning his degree in Business Administration from the University of Agder in Norway, he moved to Indonesia in 1993, where he has worked in leading positions in education and the fitness/ wellness industries all over Indonesia including Jakarta, Banjarmasin, Medan and Bali.

He was Co-owner and CEO of the Paradise Property Group for 10-years and led the company to great success. He is now Co-owner/ Founder and Director of Seven Stones Indonesia offering market entry services for foreign investors, legal advice, sourcing of investments and in particular real estate investments. He has a soft spot for eco-friendly and socially sustainable projects and investments, while his personal business strengths are in property law, tourism trends, macroeconomics, Indonesian government and regulations. His personal interests are in sport, adventure, history and spiritual experiences.

Terje’s leadership, drive and knowledge are recognised across many industries and his unrivalled network of high level contacts in government and business spans the globe. He believes you do good and do well but always in that order. Terje speaks English, Indonesian and Norwegian.

Contact Our Consultants

Ridwan Jasin Zachrie

CFO of Seven Stones Indonesia, Jakarta

Ridwan is one of Indonesia’s top executives with a long and illustrious career in the financial world. He holds several professional certifications including being a Certified Business Valuer (CBV) issued by the Australian Academy of Finance and Management; Broker-Dealer Representative (WPPE); and The Directorship Certification for Directors and Commissioners, issued by the Indonesian Institute of Commissioners and Directors.

His experience includes being the Managing Director at one of the top investment banking groups in the region, the Recapital Group, the CFO at State-owned enterprises in fishery industry and the CEO at Tanri Abeng & Son Holding. He’s also been an Independent Commissioner in several Financial Service companies and on the Audit and Risk Committee at Bank BTPN Tbk, Berau Coal Energy Tbk, Aetra Air Jakarta as well as working for Citibank, Bank Mandiri and HSBC. His last position was as CFO at PT Citra Putra Mandiri – OSO Group.

Ridwan has won a number of prestigious awards including the Best CFO Awards 2019 (Institute of Certified Management Accountant Australia-Indonesia); Asia Pacific Young Business Leader awarded by Asia 21 Network New York USA (Tokyo 2008); UK Alumni Business Awards 2008 awarded by the British Council; and The Most Inspiring Human Resources Practitioners’ version of Human Capital Magazine 2010.

He’s a member of the Board of Trustees of the Alumni Association of the Faculty of Law, Trisakti University, Co-Founder of the Paramadina Public Policy Institute and actively writes books, publications and articles in the mass media. He co-authored “Korupsi Mengorupsi Indonesia” in 2009, which helps those with an interest in understanding governance in Indonesia and the critical issue of corruption. Ridwan speaks Indonesian and English.

Per Fredrik Ecker

Managing Director of Seven Stones Indonesia, Jakarta

Per is the Managing Director of the Seven Stones Indonesia (SSI) Jakarta office and has more than 25-years’ experience in Indonesia, China, and Western Europe. He previously worked in senior management positions with Q-Free ASA, Siemens AG, and other companies in the telecom sector. Over the last six years, he has been the Chairman of the Indonesia-Norway Business Council (INBC) and recently become elected to be on the board of EuroCham Indonesia.

His most recent experience is within Intelligent Transport Solutions (ITS), Telecom, and other sectors within the Indonesian market. He is today through his position in SSI and by representing Norway Connect, promoting Nordic and European companies that would like to explore business opportunities in the Indonesian market. He’s also playing an active role to help create the Nordic House concept in Jakarta that will provide an excellent platform for Nordic companies entering Indonesia, where they’ll find a community that can offer support with trusted information and affordable services to enter this market.