Trade Globalization's Impact to Smes

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Trade Liberalization : Impacts to Indonesian Small Medium Enterprises Development 1. Introduction Undoubtedly, one of sectors that become a key engine of growth for Indonesia economy is SMEs (Small Medium Enterprises), because this sector has been a source of all the aspect related to human life including consumption, food and housing. In Indonesia, as in many others developing countries, SMEs have been an important role in Economic development because of their contribution not only to job opportunities, but also to the improvement to equal development, poverty reduction, and development of entrepreneurship. SMEs have historically been the main players in the Indonesian economy, where majority of all Indonesian company across all sectors are in the SME category and providing employment for over 90 per cent of the country workforce which is mostly women and youth (Tambunan 2008). When Indonesia experienced financial crisis in 1997-1998, SMEs has been positioned as backbone of Indonesian economy for export of manufactured goods. Some of Indonesian SMEs on that era can stand in the middle of multi dimension crisis. However, the pressure of globalization and trade liberalization nowadays has been rose little doubts that SMEs in developing countries, include Indonesia, could not survive or sustain their existence. The fact that most Indonesian SMEs lack of crucial resources, especially in technology, making question: are they ready enough to compete in the global market. This paper, hence, tries to discuss what impacts on the growth of SMEs in Indonesia caused by trade liberalization policy. 2. Why Trade Liberalization? Trade Liberalization is a process to reduce trade barriers so product can be transported around the world more freely (investopedia.com). It includes removing tariff (duties and surcharge), license rule, quota and other requirement. In the

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