The Development of Small Industries and Economy of Indonesia

           Small indusrties or in this case Small and Medium Enterprises (SMEs) are small firm that operating in producing goods or services. Usually this kind of business has a little capital, limited equipment or tools, a few employment, and little output or product. There’s so many kind of product that be produced by SMEs company. Usually there are so many SMEs in one country (especially in little countries or developing countries) and because of that reason, SMEs give significant development in litlle countries or developing countries.

          Indonesia is one of developing countries in economy and because of that, SMEs give so many development in this country. From the data in 2001, there are 99,97% SMEs company in this country and there are 97,85% employee work in SMEs company. The comparison between Big Industries and SMEs company in this country is too large and of course this fact gives significant impacts for this country.

From the data above, we can see that SMEs have a big role as a job provider for the vast majority of the people and reducing unemployment in this country. Recently, unemployment is one of the biggest problem for this country. Because of so many unemployments in this country, the government must take responsibility for their life, for example give some subsidy to ensure their life. Moreover, with so many unemployments in this country, human resources in this country can’t be distributed and be used properly, the circulating of money don’t balance, and that make a gap in economic cycle in this country. So, the function of SMEs as a job provider is very important for this country.

            From this function, we can see that SMEs have a vital function in combating poverty, distributing income, and economic growth of this country. As we can see, there’s so much people live in proverty. That is happen because a big gap from many people who have money and who don’t have money. The distributing of income (or in this case is money) can’t reach people with low economic condition, and back again the real reason for this case is because it’s not easy to get job. With SMEs in this country, this problem can be reduced because there are so many SMEs in this country and because of them, many people can get income easily. When this problem reduced, the economic growth of this country will be better and better. That happen because the economic gap in this country will be reduced and the circular of money is this country will be more efficient.

             Another function of SMEs in this country that important is increasing non-oil export. Indonesia is one of oil exporter country (especially crude oil), but we cannot always become an crued oil exporter because crued oil is one of limited and raw product. And based from that fact, we need some product that can be exported to other country to increasing income for this country. There are so many SMEs in this country and every firm makes some output or product that can be sold to another country. And when that happen, cash income for this country will increasing.

               Besides from that, it’s not easy for SMEs to compete in the global market and it is hard to become a big and stable company. Intense competition in the market is still the biggest problem for SMEs company to compete in the market. Many people already know another product from other brands and trusted that brand as the best product in the market. It’s not easy for SMEs to make their product and their brand become a famous product, be known by people (instill the brand image), and be trusted by others.

Another problem for SMEs is their low capital. As a small and medium company, SMEs of course still have limitation in capital section. Many SMEs company who still don’t have their land and equipment. They just used their simple tools or they need to rent it from others. They don’t have much money to hire many employment or buy some technology to support their businesses.  That problem will affect the procces of production and the output of the company. The output will fewer with the higher cost, and that will impact to the product price that will be higher than other product.

              Another weakness from SMEs company is knowledge and experience. Knowledge and experience is an important factor for the company to running their business. With knowledge and experience, a company can make a great decision for their company policy and strategy to gain market. As a small and medium company, logically SMEs still have a fewer knowledge and experience than another big company and this fact makes SMEs harder to become a big company .

From companies side, SMEs company need to be opened to market needs and market changes. To gain the market, SMEs company need to make some innovative idea when they produce their product. The innovation product will make people interest to buy their product and make their brand be known by others. After people have a brand image, the company will be more easier to compete and gain the market.

             From the society side, people must be opened their mind to try and trust SMEs product in the market. This step will help the company growing and of course as the result, the company will give a positive feedback to society by hire more employment and reduce the economic gap in the society.

From the government side, based on the functions of SMEs, the government must see SMEs company as a benefit for this country (even until now, the fact is the government still can’t give much help to SMEs company growing). Economic issues can be reduced and economic growth problem in this country can be resolved by SMEs company. The government need to find a solution for SMEs company weaknesses to make this company survive in the market. There are some action that the government can do.

·         the government can give some capital subsidy or loan to make SMEs company grow and become a stable and big company.

·                                The government can make some policy that helped SMEs and give some protection to SMEs company to grow bigger, for example make SMEs easier to make business license or make a limitation for foreign companies operate in this country.

·         the government can give a training and information about how to producing, advertising, and marketing SMEs product in the market. It can help SMEs company to compete in the market.

·         the government can help SMEs company with built some facilitate for the company create partnerships with exporters or buyers from other countries.

               So, from the data above the condition about SMEs company in Indonesia, the function of SMEs company in this country, and the weaknesses of SMEs company, we can conclude that Small and Medium Enterprises really important for this country. Because of that, the government must keep supporting SMEs company so this company can compete in the market. Moreover, from SMEs company side, the company need the innovative idea and from society side, people must open their mind to support SMEs companies grow bigger. 

Daftar Pustaka

http://en.wikipedia.org/wiki/Small_and_medium_enterprises
http://www.smecda.com/deputi7/file_infokop/riana.htm

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Name : Vicky Ferdian
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Cigarette and Economy of Indonesia

 Nowadays, cigarette has been something can not be separated from the people's lives in Indonesia. Almost each level of ages consuming the cigarette. Start from kids,  junior-senior high school students (teenagers), adults, up to the eldest. The same with the levels of the social life, each level (low, middle, high) consuming the cigarette. We can also see frequency of consuming the cigarette in  our society on various type of job, for example labors, drivers, salesmans, employees, businessmans, officials, and others, many of them are consumer. Even now, gender has become something not important anymore, each woman feel free to smoke anywhere or anywhen they want.

The number of smokers in Indonesia continue to increase from 1995 until now. As many as 34.7 million to 65 million smokers. It is based on data from the National Social- Economy Survey and Health Research Association. "Based gender in 1995 there were an estimated 33.8 million male smokers and 1.1 million female smokers. However, in 2007 this figure rose dramatically to 60.4 million male smokers and 4.8 million female smokers, "said UI Demographic Research Institute, Abdillah Hassan. Increase also occurred in consuming cigarettes among teenagers, where in 1995 only 7 percent and then 12 years later increased to 19 percent. This drastic increase proves how effective tobacco industry strategies and how weak the government in protecting teens from smoking.

This is a big problem and we should not ignore it. We can see there are many things happened caused by this, most of them are bad things. The one that we can clearly see is problems on health, cigarette ruin health so much. But besides ruin the health, some said that cigarette give a good impact in economy of Indonesia, they said that Indonesia’s economy quite dependent on cigarette industry, it is because cigarette industry contribute a large amount to the foreign exchange and Indonesia’s APBN. Government decision which made cigarette industry become one of the big parts to contribute in Indonesia’s APBN make cigarette industry become more passionate to promote and to sell their product to the society in Indonesia. Based on data from the Demographic Institute Faculty of Economics UI, production of 220 billion sticks of cigarettes (2006) has increase to 270 billion cigarettes (2010). If the price per stem Rp 500, Rp 135 trillion burned by Indonesia’s smokers a year. So then it will become harder to prevent the development of this industry in our country.

As an industry, there are many things needed to make this industry going well, one of them is the raw materials like the tobaccos. This needs automatically provide an employment for the society to tobacco farmings, which then help to increase the economy of the society. Not only help the farmers of tobacco, there are many people survive because of the benefits of cigarette, such as tobacco companies, cigarette factory workers, selling cigarettes as well as people who sell services to the cigarette manufacturer. Cigarette has a big role in the low level of society, we can see there are so many of them such as the vendors selling the cigarette on the street as their way to keep alive. Many people helped by selling cigarette. This situation made the government do not dare to stop the development of cigarette industry in Indonesia, because they think it will cause a big impact for the economy. And all of this things become their reasons why Indonesia’s economy need cigarette industry.

Even tough many people said that cigarette industry has a great contribution in our economy there are still many reasons come to againts. Cigarette actually contributes the greatest loss to our country. Losses incurred cigarettes is not only a health problem but also a problem of moral and financial. Loss will be felt in the next dozen years, there will be the ‘lost generation’. Because actually smoking really damaging the youth. We lost too much productivity, too many productive generation. The state will lost their youth which one day could be the one who build this country to be the better one. According to data of Ministry of Health in 2004, the total cost of consumption or expenditure to Rp 127.4 trillion tobacco. Cost are inclusive of the cost of health cares, treatments and deaths from tobacco. Meanwhile, state revenues from tobacco tax was Rp 16.5 trillion. "It means expenses for handling health problems caused by smoking  7.5 times more than the cigarette tax revenues itself”. It can be seen that the cigarette industry is not the industry that can significantly improve the life of the people in Indonesia. Even the growth of the tobacco industry must be paid by the people of Indonesia, consumer of cigarettes is too much suffering in almost every aspect.

From the study conducted by the Institute of Demography (LD UI) in 2007, showed that the tobacco industry contributed only 1 percent of the total national output and ranks 34th. While the contribution of the employment in the same year (2007), the tobacco industry ranks only 48th, while tobacco farming was ranked 30th among the 66 sectors. We must have the courage to admit that Indonesia is far behind in the effort to protect people against the effects of cigarette’s smoke. Compared with neighboring countries in the ASEAN region, such as Thailand, Singapore, Philippines and Malaysia. In these countries, several regulatory instruments have been created to overcome these adverse effects of tobacco products. Such as that contained in the Framework Convention on Tobacco Control (FCTC), with an increase in cigarette taxes, prohibit tobacco advertising and the 100 percent smoke-free society that aims to protect non-smokers. Moreover, in these countries are already implementing health warning which is not only just a form of writing, but also by using the graph or picture of health effects of cigarettes in each pack.

So, in terms of profits, income country by the production of cigarettes is very large but equal to the expenditures because customs are quite large. Benefits of smoking only on manufacturers that produce cigarettes. Of course, also for the workers and laborers associated with the manufacture of cigarettes. Because of cigarettes they can achieve great benefits and can survive. As with the users, especially teenagers and parents who consume the majority of cigarettes every day, until there are so many heavy smokers around us, smoking can damage our health because of the chemical elements contained in. So, if the government was intending to protect citizens from the effects of smoking, they need to take a real action, stop protect the cigarette industry in our country, stop make an excuse that said Indonesia really depend on this industry. In addition, the government also should immediately discuss the effects of Tobacco Control Bill into law, so the legal aspects of tobacco’s control is getting stronger. The impact of tobacco control regulation will not necessarily reduce the consumption of cigarettes because cigarettes are addictive. But at least this accession will protect children, young people, women, pregnant women, the prospective novice smokers and non-smokers from the dangers of secondhand smoke.

Source 

http://www.scribd.com/doc/99783107/Analisis-Keuntungan-Dan-Kerugian-Rokok-Bagi-Indonesia

http://nusantaranews.wordpress.com/2009/01/26/mitos-industri-rokok-penting-bagi-negara/ 

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Name : Siti Afifah
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