The meeting, held at the Ministry of Home Affairs office in Jakarta, also addressed Kadin’s involvement in key government initiatives, including the Free Nutritious Meals (Makan Bergizi Gratis/MBG) program.
During the meeting, Minister Tito underscored the strategic role of MSMEs in maintaining economic stability and driving national economic growth.
He noted that during the COVID-19 pandemic, the MSME sector played a crucial role in sustaining local economies, helping them remain in positive growth territory.
“COVID taught us many lessons—one of the most important being that MSMEs are the backbone of the economy,” Tito stated.
He cited the example of the Special Region of Yogyakarta (DIY), which managed to record positive economic growth during the pandemic thanks to the resilience of its MSME sector. In contrast, many other regions saw their economies contract, with some even falling into negative growth.
Tito highlighted the importance of empowering MSMEs to increase locally generated revenue (PAD). Strengthening regional fiscal capacity, he said, should not rely solely on transfers from the central government.
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He pointed out that many regional governments still depend heavily on central government transfers for fiscal resources. To reduce this dependence, local governments must find creative ways to increase PAD—one of which is by supporting MSME development.
In addition to MSMEs, local governments are encouraged to leverage the role of region-owned enterprises (BUMDs) to stimulate local economic activity. The Ministry of Home Affairs is currently working to optimize the performance of BUMDs so they can deliver tangible benefits to regional economies.
According to Tito, this empowerment requires multi-stakeholder support, including from Kadin, which has a vast network across the country.
The minister also stressed the importance of regional leaders possessing an entrepreneurial mindset, enabling them to identify and harness local economic opportunities and potential revenue sources.
Tito added that simplifying business licensing procedures is also essential to foster a conducive business ecosystem. He expressed confidence that such measures could accelerate regional economic growth.
“Thriving regions are those where the private sector is alive and well,” he said.
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Translator: Rassat, Azis Kurmala
Editor: Rahmad Nasution
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