Maintain Positive Momentum by Optimizing Local Products

KRISTI DWI UTAMI

The atmosphere of the KCF-Apeksi discussion at the Bogor Botanical Gardens, West Java, Saturday (3/9/2022).

JAKARTA, KOMPAS — The momentum of positive national economic growth in the second quarter amounting to 5.44 percent can be maintained by optimizing the use of domestic products. Apart from contributing significantly to local and national economic growth, optimizing local products also encourages job creation.

Through Presidential Regulation Number 12 of 2021, it is regulated that 40 percent of government spending is used for micro and medium-sized enterprises (MSME) and cooperative products. Various efforts were made to accelerate this policy. One of them is the ease of registration in e-catalogs managed by the Government Goods/Services Procurement Policy Agency (LKPP).

Now, the registration of SME and cooperative products in the central government e-catalog and local e-catalog can be done in only two stages, from the previous eight to nine stages. Products are simply registered in the e-catalog and immediately displayed, without going through verification and other administrative bureaucracy.

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In the discussion of the Kompas Collaboration Forum (KCF) City Leaders Community #APEK SInergi titled "Optimizing the Utilization of Local Products for Economic Recovery and Anticipation of Recession" on Saturday (Sep. 3), in Bogor City, West Java, Tourism and Creative Economy Minister Sandiaga S Uno said the government continues to accelerate the use of local products. The MSME development ecosystem as the producer of local products is improved and ensured that their products enter the e-catalog to be curated and accelerated.

According to Sandiaga, the government will assist local governments, including city governments, in e-catalog technical guidance.

"The government will provide stimulus," Sandiaga said in a discussion held by Kompas daily with the Indonesian City Administration Association (Apeksi). According to Sandiaga, the government will assist local governments, including city governments, in e-catalog technical guidance.

The municipal governments are asked not to hesitate in using e-catalogs in the utilization of local products. The legal umbrella already exists, namely Presidential Instruction No. 2/2022 on the Acceleration of Increasing the Use of Domestic Products and Products of Micro, Small Business and Cooperatives in the Framework for the Success of the Proud National Movement for the Made in Indonesia Products in the Implementation of Government Procurement of Goods/Services.

Sandiaga emphasized that the policy of using local products is carried out by many other countries in the world, such as China and the United States, to encourage the domestic economy.

KOMPAS/RONY ARIYANTO NUGROHO

Mayors who are members of the Association of Indonesian City Governments (APEKSI) prepare for a leisurely walk at the Bogor Botanical Gardens, Bogor City, West Java, on Saturday (3/9/2022).

LKPP chairman Abdullah Azwar Anas, who was present in the discussion, said that city governments do not need to be confused about registering products in the government e-catalog or local e-catalog. The stages are simplified and there is no price negotiation. “Prices follow the market average. If the price is higher than the market price, the product will be frozen," he said.

LKPP has now frozen around 13,000 imported products in the e-catalog.

To facilitate payments, the government in October this year will also launch a government credit card.

So far, the obstacle in purchasing goods/services of the MSME and cooperatives is the requirement to pay cash as quickly as possible. In fact, the regional budget arrangement does not allow this to be done. The provision of the government credit card, according to Anas, is a payment solution for local governments to use local products.

Currently, the government targets the transaction value of local products to reach Rp 600 trillion ($40.2 billion). This will create millions of jobs.

The use of local products supports economic growth. If transactions for local products reach Rp 400 trillion (US$26.9 billion), Anas added, it will contribute 1.71 percent to economic growth. Currently, the government targets the transaction value of local products to reach Rp 600 trillion ($40.2 billion). This will create millions of jobs.

He said there are more than Rp 1,200 trillion in government spending, which becomes market opportunities for local MSMEs and cooperatives.

Need for a road map

The Head of Apeksi who is also the Mayor of Bogor, Bima Arya, said that the acceleration of the central government policy is supported by the city governments that are members of Apeksi. He gave an example: Bogor requires state civil servants (ASN) to wear Sundanese clothes every Thursday and batik every Friday. There was a proposal, on Tuesday, to wear casual clothes of local products. If 8,000 ASNs in Bogor City use local products, he estimated that there will be transactions of at least Rp 3.5 billion ($235,000).

However, to make it happen, there must be a clear road map jointly escorted from upstream to downstream in strengthening domestic products. "Our homework is the TKDN (domestic component level) roadmap, starting from planning, budgeting to evaluating regional head regulations," he said.

A number of mayors said that dissemination of information about domestic products is needed. Product specifications that do not comply with the provisions are feared to violate the rules. "LKPP can facilitate it by fortifying it, such as through the MoU of LKPP-National Police Chief or the prosecutor's office, because we are afraid of violating the rules," said Helldy Agustian, the mayor of Cilegon.

There are no other products yet. There are about 1,000 local Tarakan products in the e-catalog.

Tarakan Mayor Khairul said that the dissemination of information on domestic products and the requirement of 40 percent of the budget for local product spending must be amplified. Not all regions understand it. In Tarakan, most of the products in the e-catalog are still food products. There are no other products yet. There are about 1,000 local Tarakan products in the e-catalog.

KOMPAS/RONY ARIYANTO NUGROHO

Singkawang Mayor Tjhai Cui Mie.

Singkawang Mayor Tjhai Cui Mie added that the digitization of local products is continuously carried out. They create a digital platform that contains product information, prices and where to buy. The use of local products for employee uniforms is also applied, namely Tidayu batik on Thursday and national batik every Friday.

Batu Mayor Dewanti Rumpoko said that in developing local products, her party provides assistance other than licensing so that business actors have legality.

Overcoming the obstacles

Contacted separately, the Executive Director of the Monitoring Committee for the Implementation of Regional Autonomy (KPPOD), Herman Suparman, assessed that there are several obstacles that lead to the use of local products not being optimal. First, the mindset that sees the quality of local products as inferior to imported products. The legality of products produced by local entrepreneurs is also often incomplete.

The central government is deemed necessary to provide incentives for local governments that absorb regional budgets (APBD) for 40-60 percent of local products so that local governments compete to implement the policy.

On the other hand, he reminded the local governments to also increase the capacity of local business actors. Assistance is provided from production to marketing.

(This article was translated by Hyginus Hardoyo).