Indonesia Discusses SDGs and MSMEs Challenges at 2nd DWG Side Event

As part of Indonesia’s G20 Presidency in 2022, the Ministry of National Development Planning/Bappenas holds the 2nd Development Working Group (DWG) Meeting in Yogyakarta between the 24th and 25th of May. The event is preceded by the 2nd DWG Side Event on 23 May, which was held in partnership with the Islamic Development Bank (IsDB) and the United Nations Development Programme (UNDP). The meeting discussed ways on how to increase the productivity and competitiveness of Micro, Small, and Medium-Scale Enterprises (MSMEs) and the informal sectors to help them recover from the impact of the Covid-19 pandemic. Indonesia is maintaining sustainable approaches in every development growth scheme, which is also crucial for ensuring the effectiveness of the development. “The Indonesian government has prioritized principles of sustainability in each of its economic development plans by implementing co-creation and inclusivity measures to ensure no one is left behind,” said the Ministry of National Development Planning/Bappenas’ Expert Staff to the Minister for Social Welfare and Poverty Reduction Vivi Yulaswati, Monday (23/5).

Meanwhile, the Director for Multilateral Funding at the Ministry of National Development Planning/Bappenas as Co-Chair of the G20 Development Working Group Raden Siliwanti opened the G20 DWG Side Event by highlighting the importance of strengthening Indonesia’s MSMEs for economic recovery. Siliwanti emphasized the MSME industry’s importance in Indonesia, which make up almost 99 percent of all the country’s business activity. “Strengthening MSMEs is one of the DWG’s priority issues, due to the fact that MSMEs have become the main drivers of developing nations’ economies, including ours. [Through this event] we aim to illustrate a lesson learned from the Covid-19 crisis on how responsive policy intervention can actively support MSMEs going forward,” Siliwanti said.

In order for MSMEs to develop and grow, factors such as supportive policies, government intervention, systemic reorganization, to digital transformation are important to consider. For the Ministry’s Director for Small and Medium Enterprises and Cooperatives Development Ahmad Dading Gunadi, even before the Covid-19 pandemic, Indonesia’s MSME sector were beset with various fundamental challenges, despite the fact that MSMEs make up a sizable chunk of the national business landscape. These challenges included the lack of an integrated MSME database by institutions and ministries at both the national and regional level. Other challenges include maximizing partnerships between MSMEs and large-scale enterprises, increasing export contribution, expanding access to financial services or institutions, and promoting further digital adoption.

“All of these problems the government has either addressed or will address going forward. We have a goal that within five years, beginning from 2021, all of these issues will be solved. And some already have. For one, the Ministry of Small and Medium Enterprises and Cooperations have distributed credit subsidies, tax relaxations, and credit restructuration for MSMEs affected by the Covid-19 pandemic in 2021,” Dading said. Another crucial strategy in the government’s efforts is the issuing of a regulation in 2021 that makes it compulsory for government institutions to procure their supplies and services strictly from local businesses, by at least 40 percent.

The 2nd DWG Side Event is divided into two sessions. Side Event 1: “Strengthening MSMEs Productivity, Competitiveness, and Resilience in Facing Future Shocks Post COVID-19 Pandemics in Developing Countries, LDCs and SIDS”, covering Session 1: Responsive Policy Interventions Supporting MSMEs During Pandemics: Lessons Learned from COVID-19 Crisis which was attended by Chief Editor – LPEM FEB UI Dewi Meisari, Director for Small and Medium Enterprises and Cooperatives Development Ahmad Dading Gunadi, Head of Secretariat Women Entrepreneurs Finance Initiative Wendy Teleki, Manager Global Programme on Business for Gender Equality of UNDP Diana Gutiérrez, dan Head of IsDB Center of Excellence Malaysia Mohamed Abida.

Session 2: Preparing MSMEs for the Digital Economy and solutions for transitioning MSMEs to adapt to and tap into Industry 4.0 hosted Chief Editor - LPEM FEB UI Dewi Meisari, Lecturer of Economics of University of West Indies Barbados Antonio Alleyne, Principal Secretary, Industries & Commerce and Information Technology (Government of Telangana, India) Jayesh Ranjan, Chief Risk and Sustainability Officer Amartha Fintech Aria Widyanto, Chief Division of Innovation and Digitalization at UNIDO Marco Kamiya. Both sessions were moderated by Diana Octary, Advisory Project Lead, ASYX Holdings Pte. Ltd.

Side Event 2: “Scale-up Blended Finance and Private Finance to Reach the Last Mile” hosted Director PT SMI - SDG Indonesia One Faaris Pranawa, Special Adviser to the President on Finance and the Economy Nigeria Sarah Alade, Senior Counselor & Head of Financing for Sustainable Development Division of the OECD Development Co-operation Directorate Haje Schutte, SDG Finance Specialist, Finance Sector Hub UNDP Tim Strawson, Country Strategy and Market Integration Manager Islamic Development Bank Syed Husain Quadri, Chief of Product Officer Asian Venture Philanthropy Network Tristan Ace, and President United in Diversity Tantowi Yahya. The session, which concluded the day, was moderated by SDGs Indonesia’s Coordinator of Expert Team Yanuar Nugroho.


About the Development Working Group

The Development Working Group (DWG) is one of the working groups of the 2022 G20 Indonesia Presidency which aims to discuss development issues in developing countries, least developed countries (LDC) and island countries (Small Island Developing States/SIDS). The DWG was first formed at the 2010 G20 Summit in Toronto, Canada with the main task of discussing the G20 priority agendas in the field of development. The DWG identifies development challenges, and then formulates the best solutions to promote economic growth in developing and low-income countries as an effort to mitigate the global financial crisis.

During the Indonesian Presidency of the G20 in 2022, the DWG raised four priority issues, namely 1) Strengthening Recovery from the Covid-19 Pandemic and Ensuring Resilience in Developing Countries, Underdeveloped Countries, and Archipelagic Countries through the three key pillars of MSMEs, Adaptive Social Protection, and Low-Carbon Green and Blue Economies; 2) Increasing Private and Blended Financing in Funding Sustainable Development in Developing Countries, Underdeveloped Countries, and Archipelagic Countries; 3) Renewing the Global Commitment to Multilateralism for Sustainable Development; 4) Coordinating the progress of achieving the SDGs in the G20 and updating the G20 Development Commitments.

As the focal point for DWG, Ministry of National Development Planning/Bappenas organized the 1st DWG Meeting in Jakarta (24-25 February) and the 2nd DWG Meeting in Yogyakarta (23-24 May). A 3rd DWG meeting will be held in Bali between the 9th to 11th of August 2022. The G20 Indonesia Presidency will also hold the G20 Development Ministerial Meeting in Belitung on the 7th to 9th of September 2022.