© 2011 by Indonesian Investment Coordinating Board. All rights reserved invest in Invest in remarkable indonesiaInvest in remarkable indonesiaindonesia Invest in remarkable indonesia indonesia Invest in Invest in remarkable indonesia indonesia Invest in able indonesiaInvest POLICY EMPOWERMENT OF BUSINESS MICRO, SMALL, MEDIUM ENTERPRISES (MSMs) IN ORDER INVESTMENT Presented at event: Workshop on Doing Businees in the APEC Region Bali, September 5, 2013 Director of Business Empowerment BKPM

2 INVESTMENT POLICY DIRECTIONS Constitution of the Republic of Indonesia No. 25 of 2007 On Investment 2 Investment policy directions for Encourage the creation of national business climate conducive for investment to strengthen the competitiveness of the national economy. Accelerating increase in investment. Based on Law no. 25/2007 Article 13: Obligations set business field is reserved for Micro, Small, Medium Enterprises (MSMs), Cooperatives and business fields open to large businesses, subject to working with SMEs and Cooperatives

RUPM Investment is a document that is long-term planning until 2025, which serves to synergize and operationalize all interests related sectors, in order to avoid overlap in the prioritization of sectors to be promoted. Based on the vision and mission of the Indonesian Investment until 2025, formulated investment policy which includes seven (7) major elements, namely: Investment Climate Improvement Distribution of Investment Food Focus Development, Infrastructure and Energy The Environmental Investment (Green Investment) Empowerment of Micro, Small, Medium Enterprises (MSMs) and Cooperatives Provision of facilities, Ease, and / or the Investment Incentives, Investment– Promotion Public Investment Plan (RUPM) Presidential Regulation No.16 of 2012 Date February 7,

Empowerment Policy Direction of Micro, Small, Medium Enterprises (MSMs) and Cooperatives Implemented by 2 (two) major strategies, namely: Strategy to the next grade, which is a strategy to encourage businesses that are at a certain scale to be a business with greater scale, micro business developed into a small business, then a mid-size businesses, and eventually became a large-scale effort. Strategic alliances, strategic partnership is a relationship (cooperation) between the two parties or more businesses, based on equality, openness and mutual benefit (benefit), so as to strengthen the linkages between businesses in different scale. Alliance built to entrepreneurs who have a smaller scale is able to penetrate the market and production networks on a larger scale. The alliance is built based on business considerations and mutually beneficial cooperation.

RESERVATION OF BUSINESS & PARTNERSHIP 5 Determinations fields effort to SMEs Determinations of open fields effort who with partnership requirements Presidential Regulation No.36 of 2010

Presidential Regulation No.36 of 2010 (1) 6 Determination of business sectors reserved for MSME (39 businesses) among others ; Staple crops (corn, soybeans, peanuts, green beans, rice, cassava, sweet potato), with an area of less than or equal to 25 Ha, Primary rattan processing industry, Concession Swallow's Nest in nature, Enterprises Fishery Products Processing which is done integrated to conducted fishing in Public Water Power Generation (<1 MW) Industry salting / drying fish and other aquatic biota and industry boiled fish

(2) Presidential Regulation No.36 of 2010 (2) 7 Determination of the business with partnership requirements (36 businesses) among others ; Cultivation of Rattan Cultivation of pine sap, Enlargement of Fish Marine Pemanisan-salting industry fruits and vegetables, Cultivation of beekeeping, Small Scale Power Generation (1-10 MW), Industrial processing of milk powder and condensed milk.

8 DOMESTIC 1,647 (BUSINESS LICENSE / EXTENSION / CHANGES) FOREIGN (BUSINESS LICENSE / EXTENSION / CHANGES) DOMESTIC / FOREIGN COMPANIES THE REQUISITE TO PARTNERING FOR THE PERIOD DECEMBER 2012

9 PROGRAM ACTIVITY DIRECTORATE OF BUSINESS EMPOWERMENT 9 Forum Communications National Enterprises Empowerment (FK-PUN) Entrepreneurship Training enhancement ability SMEs Matchmaking Domestic and Foreign Directory / Study of SMEs of partnerships with investment company

PARTNERSHIP 10 Aspects of the Investment Partnership is intended to: Embodies a partnership between SMEs Embodies a partnership between SMEs and Large Enterprises Encourage mutually beneficial relationship within the implementation of the business transactions between SMEs Encourage mutually beneficial relationship in the execution of business transactions between SMEs and Large Enterprises Develop partnerships to improve the bargaining position of SMEs Encourage the formation of market structures that ensure healthy growth of that competition and protect consumers Prevent market domination and concentration of effort by an individual or a certain group damnific SMEs Law. 20 th Article 11

BENEFIT OF PARTNERSHIP 11 Benefits that can be obtained of the Small and Medium Enterprises and Large businesses which are doing partnerships include: Increased productivity, efficiency, Assurance of quality, quantity, and continuity, Lowers the risk of loss, Provide social benefits are high enough, and Increasing the resilience of the national economy.

MATCHMAKING PARTNERSHIP 12 Unites big companies that under the provisions of should be partnered or volunteered willing to partner with SMEs Facilitate / encourage big companies to do CSR (Corporate Social Responsibility) Facilitating SMEs doing business development / marketing overseas

Forum Communications National Enterprises Empowerment (FK-PUN) Facilitate meetings between SME entrepreneurs to discuss / discuss together in finding solutions to problems faced by SMEs, with invited speakers from financial institutions / banks, economists and SMEs that have been successful. Implementation Activities: North Sumatra, Southeast Sulawesi, Papua, Maluku, East Java.

Entrepreneurship Training enhancement ability SMEs Providing training of managerial and motivate SME entrepreneurs with resources persons of the Management Board University of Indonesia and SMEs Centers of University of Indonesia Implementation Activities: Central Kalimantan, Sulawesi, NTB, South Sumatra, North Sulawesi.

Unite the large investment firms that under the provisions should partner or voluntarily willing to partner with SMEs. Implementation Activities: South Kalimantan, West Sumatra, Gorontalo, NTT, West Java. MATCHMAKING DOMESTIK

MATCHMAKING FOREIGN AFFAIRS Facilitate SMEs to do business development / marketing overseas. In program year 2013, the Directorate PU has implemented activities in 2 countries namely the Netherlands and Ukraine and to further activities will be implemented in 5 countries namely China, Thailand, Malaysia, France and Australia.

POTENTIAL BUSINESS PARTNERS DIRECTORY In 2013, implemented making Directory of Potential Business Partners by providing data and information as possible about potential local partner at 9 Indonesian province, who are interested in a joint venture with foreign investors or with companies that already exist in Indonesia, which have or will itself implement partnership programs. 9 provinces namely ; Aceh, Bangka Belitung, Lampung, Riau, Banten, South Kalimantan, North Sulawesi, Southeast Sulawesi and Maluku

18 STUDY FOREIGN INVESTMENT AND DOMESTIC INVESTMENT THAT HAD IMPLEMENT PARTNERSHIP The objective of this directory is to know the company's foreign / domestic in 7 provinces in Indonesia which have implemented a partnership program with local SMEs in order to empower SMEs. 7 provinces, namely: D.I. Yogyakarta, Riau, East Kalimantan, Maluku, Papua, Bali, South Sulawesi.

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