INDONESIAN GOVERNMENT POLICY AND SMEs BUSINESS STRATEGY DURING THE COVID-19 PANDEMIC

Abstract

Economic disruption by The COVID-19 pandemic has hit Indonesian economic heavily. The purpose of this study is to provide an overview of government policies and business strategies in Indonesia amid the COVID-19 pandemic. This study employed a qualitative approach with data sources of literature reviews. The results of the study indicate that the Indonesian Government has responded to the pandemic by issuing some policies regarding SMEs. There are several policies issued regarding the Micro and SMEs business. The policy is breakdown into five schemes namely (1) Social support; (2) SMES tax incentives; (3) Credit restructuring and relaxation (4) Working capital support stimulus; and (5) Collaboration with State-owned enterprise as the off-taker for SMES products. On the other hand, there are some SMES business strategies in adjusting amidst the Covid-19 pandemic in Indonesia. Those strategies are (1) Products innovation; (2) Customer and stakeholder relationship management;(3) Digital marketing and distribution; and (4) Strategic Agility.

The impact of the spread of covid-19 on marine tourism-based small businesses and suggested recovery plans

“…The policy is expected to continue in 2021. The central bank will tend to lower or maintain interest rates due to the ongoing economic recovery period [12].…”

“…On the other hand, there are some SMES business strategies in adjusting amidst the Covid-19 pandemic in Indonesia. Those strategies are (1) Products innovation; (2) Customer and stakeholder relationship management (3) Digital marketing and distribution; and (4) Strategic Agile [12].…”

“…The second scheme is a scheme regarding tax incentives that applies to SMES actors with a turnover revenue of below Rp. 4.8 billion per year (12). The Government has lowered the final income tax rate (the final Income Tax (tax income) or PPh rate for SMEs from 0.…”

“…Therefore, for SMEs that are bankable, the financial support distribution will go through the expansion of the KUR program and at the same time encourage financial inclusion. On the other hand, for those who are not bankable, the distribution can be done through UMi, Mekaar, or other program schemes [12]. For SMEs that are bankable, the financial support distribution will go through the expansion of the People's Business Credit (KUR) program and at the same time encourage financial inclusion.…”

“…For SMEs that are bankable, the financial support distribution will go through the expansion of the People's Business Credit (KUR) program and at the same time encourage financial inclusion. On the other hand, for those who are not bankable, the distribution can be done through Ultra Micro Financing (UMi), Fostering the Economy of Underprivileged Families (Mekaar), or other program schemes [12].…”