OVERVIEW ABOUT MSMEs

The existence of Micro, Small and Medium Enterprises (MSMEs) in Indonesia occupies a strategic position in national economic development. MSMEs are the driving wheels of the Indonesian economy. The development of UMKM is one of the concrete forms of community empowerment through the development of a people's economy. MSMEs have also proven to be quite resilient in facing the crises that occurred in 1998 and 2008. Broadly speaking, there are three roles or contributions of MSMEs to the Indonesian economy, including: 1) As a means of equitable distribution of the people's economy, where it is possible for MSMEs to play a role in equalizing people's economic activities. because of its existence in various places, even reaching remote areas of the village; 2) As a means of alleviating people from poverty, because the absorption of labor is relatively high; and 3) As a means of earning foreign exchange for the country, because the market is not limited to the domestic market, but also reaches the export market (https://www.kompas.com/skola/read/2019/12/20/120000469/peran-umkm-dalam-perekonomian-indonesia?page=all.)

              Based on BPS data for 2018, it can be seen from the number of UMKM business units that reached 64 million units, or around 99 percent of the total business units in Indonesia. The development of MSMEs is not only a source of job opportunity creation and an engine for the economy in rural areas. However, in the era of globalization the role of MSMEs has become increasingly strategic, namely as a source of foreign exchange from non-oil and gas exports, with total exports reaching 293,840 billion rupiah, so that they can contribute to Indonesia's total exports of around 14 percent. Apart from being a source of foreign exchange earnings, MSMEs also have a role in the economy through their contribution in providing employment and in the formation of Gross Domestic Product (GDP). BPS data for 2018 also shows that GDP at current prices generated by the MSME sector reaches 8,573,895 billion rupiah, so that the contribution of MSMEs to Indonesia's GDP is around 61 percent, while its role in employment reaches 117 million people, or around 97 percent. . Seeing the big role of MSMEs in expanding employment opportunities and absorbing labor, it can be expected to reduce unemployment and poverty levels.

               Then what was the condition of MSMEs during the Covid-19 pandemic? The crisis due to the current pandemic has a different impact on MSMEs compared to the crises that occurred in 1998 and 2008. The Covid-19 outbreak in addition to having an impact on the public health aspect, but also has an impact on the economies of countries in the world, including Indonesia. The economic crisis due to the weakening of the global economy as a result of the COVID-19 pandemic is a threat to the sustainability of Indonesia's national economy. MSMEs, which are one of the drivers of the domestic economy and a very large employer of labor, have experienced shocks. The Minister of Cooperatives and Small and Medium Enterprises of the Republic of Indonesia, Teten Masduki, stated that MSMEs are one of the business sectors that have been quite severely affected by the Covid-19 pandemic. However, according to Teten Masduki, there are certain MSME sectors that actually experience an increase during the pandemic (umkm menteri koperasi dan ukm teten masduki covid 19 virus corona)

 The results of a survey by the International Labor Organization (ILO) on the impact of the Covid-19 pandemic on Micro, Small and Medium Enterprises (MSMEs) found that there were MSMEs that stopped and laid off their employees for paid or unpaid leave. In addition, there are also MSME employees who have been affected by Termination of Employment (PHK). Then, there are also MSMEs that face cash flow problems. Furthermore, some respondents stated that their income had decreased by a range of 25 percent to more than 50 percent. Furthermore, the ILO also advised the government to be able to provide financial assistance for MSMEs. (https://katadata.co.id/ekarina/berita/5ed7c7e8cbb2a/survei-ilo-70-umkm-di-indonesia-setop-produksi-akibat-covid-19)

            Regarding various problems faced by MSME players, the Government has made efforts to mitigate the impact of the Covid-19 pandemic by rolling out various stimuli for business actors by allocating a number of funds, in which MSMEs are one of the priority ones. Through this stimulus, it is hoped that MSMEs will continue to be able to become a buffer for the national economy, among others, to overcome unemployment and poverty problems.