Suharto orders plan for business partnerships

Match giants with smaller firms, ministers told.

IN YET another move to address Indonesia’s wealth gap, President Suharto has ordered ministers to devise a scheme to forge partnerships between business giants and small and medium-sized enterprises (SMEs) and co-operatives.

Mr Hartarto, Co-ordinating Minister for Production and Distribution, speaking after a Cabinet meeting on alleviating poverty on Wednesday, said that various ministries were now tasked with working out a plan to identify and match large firms with SMEs.

“The concerned ministries will soon work out partnership rules,” news reports yesterday quoted him as saying after the Cabinet meeting.

He said the President had asked ministers dealing with Mines and Energy, Agriculture, and Industry and Communications, to work together with Co-operatives and Small Enterprises Minister Subiakto Tjakrawerdaya to expedite the process.

Stressing that Mr Suharto placed a lot of emphasis on the scheme, Mr Hartarto said: “The President is of the opinion that business partnership between these two groups is a compulsory one.

“We will have a government ruling that will compel large business corporations to form partnerships with smaller ones.”

He also announced a presidential initiative to restrict the operation of large retailers and franchises outside major urban centres in a move aimed at helping small vendors modernise.

The government said in April that large businesses operating outside provincial capitals would have to link up with SMEs and co-operatives and offer them business opportunities.

Mr Suharto said in May that large business groups had a responsibility to act as “foster parents” to their smaller counterparts and help eradicate poverty which afflicted some 11 per cent of Indonesia’s 200 million people.

Big businesses had a constitutional duty to help the poorer segments of society, he said, pointing to Article 33 of the Constitution which states that the economy must be organised as a co-operative effort founded upon the basis of family spirit.

He said that economic development had produced tycoons but the country was now entering the next phase which was directed at promoting small-scale entrepreneurs and co-operatives.

Information Minister Raden Hartono said after the Cabinet meeting that funding support for SMEs and co-operatives had increased.

The Indonesia Times yesterday quoted him as saying that the Bank of Indonesia and the Finance Ministry would also speed up lending schemes, among other things, to support them.

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