What is MSME (Micro, Small and Medium Enterprises)?
In the Indonesian economy, Micro, Small, and Medium Enterprises or MSMEs are the business groups that have the largest number. In addition, this group has proven to be resistant to various kinds of shocks from the economic crisis, meaning that MSMEs have an important role.
MSMEs According to the World Bank
Unlike the case with BPS, the World Bank defines MSMEs according to three classifications, namely based on employee conditions, income, and asset value. Here’s the explanation:
a. Microenterprise. Has criteria for the number of employees of less than 30 people, and annual income does not exceed USD 3 million.
b. Small Enterprise. The criteria for the number of employees are less than 100 people, annual income does not exceed USD100 thousand, and total assets do not exceed USD100 thousand.
c. Medium Enterprise. Has criteria for the maximum number of employees of 300 people, annual income of up to USD15 million, and total assets of USD15 million.
MSMEs According to the Law
In its development, the business world is no longer classified based on the number of employees. Based on Law Number 20 of 2008 concerning Micro, Small, and Medium Enterprises (MSMEs), the government groups business types based on asset and turnover criteria.
Micro Enterprises are productive businesses owned by individuals and/or individual business entities that meet the criteria for a maximum net worth of IDR 50 million excluding land and buildings for business premises. In addition, it has a maximum annual turnover of IDR 300 million. Small Business is a productive economic business that stands alone and is carried out by individuals or business entities.
The business is not a subsidiary or not a branch of a company that is owned, controlled, or becomes a direct and indirect part of a medium or large business. The criteria for small businesses are net assets ranging from more than IDR 50 million to IDR 500 million, excluding land and business buildings. In addition, it has annual sales of more than Rp. 300 million up to a maximum of Rp. 2.5 billion. Medium Enterprises are productive economic businesses that stand alone and are not included in the subsidiaries or branches of certain companies.
Meanwhile, the criteria for the amount of net worth must be more than IDR 500 million to a maximum of IDR 10 billion. In addition, annual sales are more than IDR 2.5 billion to a maximum of IDR 50 billion. Based on the regulation of the UMKM Law, the government assumes that the average annual sales of a business field are five times the net worth of the business.
This definition refers more to operational performance because even a business with a large number of employees can become a small business if annual sales and wealth are low. On the other hand, a company can be classified as a large business if its annual sales and wealth are large, even though the number of employees is only a few. This is reflected in the new companies that have succeeded in developing their businesses in a short time because of their technological innovations, such as Google, Facebook, and Yahoo.
They can be designated as big businesses and not SMEs because they can achieve bombastic income, even though the number of employees is only small.
MSME Representative from Solo
Rising from the pandemic, hundreds of types of Indonesian MSME products have penetrated the Paris, France market. The MSME products sold in the oldest shopping center in Paris are the result of a collaboration between the Solo City government, the Indonesian Embassy in France, and an Indonesian e-commerce company.
The collaboration between the Indonesian Embassy in Paris, France, the Solo City government, and an Indonesian e-commerce company, has brought hundreds of types of Indonesian MSME products to the European market.
Le BHV Marais, the oldest shopping center in Paris will promote and sell hundreds of types of MSME products that have passed this curation for more than a month.
The event, entitled “Java in Paris – the Fruit of the Nation’s Children in Paris”, will last until July 17, featuring MSME products from Solo.
The Mayor of Solo, Gibran Rakabuming Raka, opened the event which was held on Jalan Rue de Rivoli. Gibran said this is a very good momentum for local MSMEs to penetrate the global market. The Indonesian Ambassador to France, Monaco, Andorra, and UNESCO, Mohamad Oemar said this was the result of key players being able to bring Indonesian products to Paris.
Moreover, Paris has been known as the center of the fashion industry which has a fairly high standard. Executive Director of Shopee Indonesia, Handhika Jahja, said that this event was an achievement for Indonesian MSMEs as well as marking the first year that the MSME Shopee Solo Export campus had brought 10,000 Solo MSMEs exports in one year.
This activity brought local MSMEs to penetrate the global market, marked by the presence of 9 MSME campuses spread across various islands in Indonesia. Not only featuring some cultural attractions, but the event on Jalan Rue de Rivoli also featured an Indonesian singer living in France, Anggun Cipta Sasmi.
The Important of Cultural Diplomacy In International Relations
Cultural diplomacy is classified as Soft Power as a political force that is influenced by culture, values, and ideas on the other side hard power use military force.
There are three criteria for why cultural diplomacy is an important value in international relations theory. First, to reduce the intensity of military power after the cold war, culture is seen as a new form of power in international relations. Second, every nation-state must also establish the basis and boundaries of non-security networks in terms of maintaining national identity. The culture which consists of various aspects becomes the identity of a country in the eyes of the international community. Third, cultural diplomacy can also be a strong reason in terms of forming a new international system, both in the form of regional and global organizations.
