Sustainability of MSMEs in Indonesia

Abstract

This chapter is aimed to discuss the condition of the MSMEs in Indonesia at the beginning of COVID-19 as well as the strategies that the government has undertaken to minimize the impact of COVID-19. The data for analysis is data from online survey results that carried out between 24 April-2 May 2020 with a total of 204 MSMEs participating. The results of the survey show that more than half (53%) of the MSMEs suffered from a decrease in income/production; even 43% stopped production at the beginning of the pandemic. Most of the MSMEs in various sectors admitted that they were only able to survive for less than three months, with the worst sectors being trade, corporate services, and construction. The government has implemented wage subsidy policies, loan interest subsidies, and tax abolition to save the MSMEs from the impact of COVID-19. For this matter, efforts to save MSMEs must continue, especially through expanding wage subsidies, increasing the realization of the low subsidy budget, and transforming to digital-based businesses.