Solutions to Reducing the Impacts of the COVID-19 Pandemic on Small and Medium Enterprises (SMEs) in Indonesia
Picture: Devi Puspita Amartha Yahya
The Coronavirus has now become a global pandemic. Although this pandemic first became a phenomenon at the end of January 2020, the first case appeared long before that. It was only at the end of December 2019 that Chinese officials realized that they had a new kind of virus disease. The Chinese health authority reported the first case of COVID-19 to the World Health Organization (WHO) on December 31, 2019. The “zero patient” or first carrier of the new virus was identified as a 55-year-old man from Hubei Province, China. Since then, the COVID-19 pandemic has affected not only global population health, but also the global economy. As many countries tried to curb the spread of the virus through lockdowns, many small enterprises across the globe were threatened by the economic recession resulted from the slowing transactions and daily gains. The optimism that the world economy could grow to 3.3% in 2020 turned out to be unachievable, with some large companies reducing business activities significantly. Supply to several large industries in other countries has also been hampered. Consequently, many small and medium enterprises (SMEs) with short-term business contracts were under pressure.
Prior to the pandemic, China had become a global concern because of its position as the second-largest economy in the world. The size of the country’s economy had reached USD 13.6 trillion. With that size, China contributed 17% of the world’s gross domestic product (GDP). Moreover, China had become the world’s largest exporter of intermediate goods. Some experts estimated that the COVID-19 pandemic would have a greater economic impact than the SARS outbreak. With China’s economic slowing down, it could give a chain reaction to both large and small countries. Amid the economic crisis, not only large enterprises that would be affected by the slowdown, but also small and medium enterprises across the globe. Meanwhile in Indonesia, the economy is still dominated by micro and small enterprises (MSEs). Based on the results of the Indonesian Statistics Agency (2020), the number of businesses in Indonesia reached more than 26 million. The SMEs sector is also able to absorb more than 59 million workers.
In preventing the collapse of SMEs sector in Indonesia because of the COVID-19 pandemic, the Indonesian Institute of Advanced of International Studies (INADIS) offers solutions to reduce the impact of COVID-19 pandemic on small and medium enterprises in Indonesia. The program consists of two points, namely Education and Product Marketing:
A. Education:
In this section, representative communities from various provinces in Indonesia are given a briefing or education on sustainable development or sustainable production that can help SMEs in dealing with the economic and COVID-19 crisis. The first stage can use online media such as google meets or zoom, which can save learning costs and avoid the spread of COVID-19 in accordance with government regulations.
Moreover, in this section, the community is given training on important production aspects, especially in conducting production in the time of crisis like these days from experts, both from the economic and medical experts.
B. Product Marketing:
In this section, the community is assisted by the Ministry of Trade through a “Link and Match” procedure from various countries’ trading chambers, especially Indonesia's non-traditional markets including Indonesia’s domestic market, in order to determine which countries that fit for certain products.