Government Regulation No. 7 of 2021 mandates that central, provincial, and district governments allocate at least 40 percent of their goods and services budget to MSME products.
At a press conference in Jakarta on Tuesday, Minister of MSMEs Maman Abdurrahman acknowledged that implementation of the policy has been suboptimal in several regions, necessitating a comprehensive evaluation.
He said the monitoring and evaluation process focuses on two key areas: the extent to which the 40-percent spending target has been met, and the types of products being procured.
Abdurrahman noted that in some areas, although the 40 percent allocation was formally achieved, the goods purchased were not local MSME products but imported items.
"I have spoken with the Ministry of Home Affairs and the National Public Procurement Agency (LKPP) to coordinate a meeting with several regional leaders," he remarked.
When asked why the policy has not been effectively implemented, Abdurrahman pointed to multiple contributing factors.
He stressed the need for continuous and systematic monitoring and evaluation to improve policy performance and ensure the regulation is effectively enforced.
Earlier, the Indonesian MSMEs Association (Akumindo) reported that MSME turnover had declined by around 20 percent, attributing the drop to weakened consumer purchasing power and the government’s budget efficiency measures this year.
Akumindo Secretary General Edy Misero noted that many MSMEs have yet to fully benefit from the regulation mandating local product procurement.
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Translator: Shofi Ayudiana, Raka Adji
Editor: Anton Santoso
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