Do the Government Support Salt Small and Medium Enterprises’ Competitiveness?
DOI:
https://doi.org/10.21512/bbr.v14i1.8580Keywords:
government policy, small-medium enterprises, competitiveness, salt industryAbstract
As a strategic commodity, salt in Indonesia faces the challenges of increasing imports rather than the capacity to produce locally, which SMEs almost produce. Therefore, the research explored the extent of the government’s role in the competitiveness of salt SMEs. The research applied a descriptive method with a qualitative approach. For policy analysis, literature review, observation, and in-depth interviews were conducted to analyze the effectiveness of government policies using Regulatory Impact Assessment (RIA) and Cost-Benefit Analysis (CBA). The results find that at least six issues on the existing policies need concern. It consists of local people who are allowed to produce salt, the President Decree 69/1994 role and position, the salt consumption, which is mandatory to have SNI, the changeable salt classification, the other SNI than voluntary iodized consumption salt, and SNI for food-grade salt and caustic soda (chlor-alkali products). The situation shows the government’s significant role in influencing the competitiveness of sustainable salt SMEs. Subsequently, the research proposes recommendations for the sustainable competitiveness of Small and Medium Enterprises (SMEs) on salt industry development, such as arranging new regulations or revising the existing regulation by integrating and harmonizing the interest cross-ministries, establishing the task force under the Coordinating Ministry for Economic Affairs or directly under the president to prepare the national salt industries development. The national salt classification needs to be considered as the applicable classification internationally. Salt is salt, so there is no need to differentiate it into local and imported salt. Therefore, the imported salt can be classified into food-grade and Chlor-Alkali products (CAP) salt, which should meet international standards and be mandatory.
Plum Analytics
References
Al Shukaili, A. M., Al Kindi, K., Kassim, N. M., Ahmed, Z., & Al Hosni, K. (2022). Can government financial support enhance job creations: Insights from Oman. Journal of Science and Technology Policy Management, Ahead-of-Print. https://doi.org/10.1108/JSTPM-07-2021-0100
Alfon, I., & Andrews, P. (1999). Cost‐benefit analysis in financial regulation: How to do it and how it adds value. Journal of Financial Regulation and Compliance, 7(4), 339–352. https://doi.org/10.1108/eb025021
Appiah, K., Osei, C., Selassie, H., & Osabutey, E. (2019). The role of government and the international competitiveness of SMEs: Evidence from Ghanaian non-traditional exports. Critical Perspectives on International Business, 15(4), 296–322. https://doi.org/10.1108/cpoib-06-2018-0049
Aquila, G., De Oliveira Pamplona, E., Ferreira Filho, J. A., da Silva, A. S., de Azevedo Mataveli, J. V., Correa, J. E., ... & Garcia, G. C. (2019). Quantitative regulatory impact analysis: Experience of regulatory agencies in Brazil. Utilities Policy, 59(August), 1–9. https://doi.org/10.1016/j.jup.2019.100931
Badan Pusat Statistik. (2014). Perdagangan antarwilayah komoditi garam-survei pola distribusi 2014. Retrieved from https://www.bps.go.id/publication/2014/10/29/3f126f043f4433991ddac1ef/perdagangan-antarwilayah-komoditi-garam-survei-pola-distribusi-2014.html
Badan Pusat Statistik. (2021). Statistik Indonesia 2021. Retrieved from https://www.bps.go.id/publication/2021/02/26/938316574c78772f27e9b477/statistik-indonesia-2021.html
Bui, A. T., Pham, T. P., Pham, L. C., & Ta, T. K. V. (2021). Legal and financial constraints and firm growth: Small and Medium Enterprises (SMEs) versus large enterprises. Heliyon, 7(12), 1–12. https://doi.org/10.1016/j.heliyon.2021.e08576
Busetto, L., Wick, W., & Gumbinger, C. (2020). How to use and assess qualitative research methods. Neurological Research and Practice, 2, 1–10. https://doi.org/10.1186/s42466-020-00059-z
Carroll, P. (2010). Does regulatory impact assessment lead to better policy? Policy and Society, 29(2), 113–122. https://doi.org/10.1016/j.polsoc.2010.03.009
Carvalho, B., Rondon, R., & Marques, R. C. (2020). Better utility regulation through RIA? Merits and implications based on the Brazilian case. Utilities Policy, 64(June), 1–9. https://doi.org/10.1016/j.jup.2020.101023
Cheong, C. W. H., Lee, M. H., & Weissmann, M. A. (2020). Credit access, tax structure and the performance of Malaysian manufacturing SMEs. International Journal of Managerial Finance, 16(4), 433–454. https://doi.org/10.1108/IJMF-08-2019-0308
Das, M., & Rangarajan, K. (2020). Impact of policy initiatives and collaborative synergy on sustainability and business growth of Indian SMEs. Indian Growth and Development Review, 13(3), 607–627. https://doi.org/10.1108/IGDR-09-2019-0095
Díez, F. J., Duval, R., & Maggi, C. (2022). Supporting SMEs during COVID-19: The case for targeted equity injections. Economics Letters, 219(October), 1–5. https://doi.org/10.1016/j.econlet.2022.110717
Falentina, A. T., & Resosudarmo, B. P. (2019). The impact of blackouts on the performance of micro and small enterprises: Evidence from Indonesia. World Development, 124(December), 1–12. https://doi.org/10.1016/j.worlddev.2019.104635
Hamilton, A. B., & Finley, E. P. (2020). Reprint of: Qualitative methods in implementation research: An introduction. Psychiatry Research, 283(January), 1–8. https://doi.org/10.1016/j.psychres.2019.112629
Hennink, M., & Kaiser, B. N. (2022). Sample sizes for saturation in qualitative research: A systematic review of empirical tests. Social Science & Medicine, 292(January), 1–10. https://doi.org/10.1016/j.socscimed.2021.114523
Hervás-Oliver, J. L., Parrilli, M. D., Rodríguez-Pose, A., & Sempere-Ripoll, F. (2021). The drivers of SME innovation in the regions of the EU. Research Policy, 50(9), 1–13. https://doi.org/10.1016/j.respol.2021.104316
Hussain, C. M., & Shah, S. Z. A. (2021). Firm level assessment of Pakistan and Malaysia Free Trade Agreement. Asia Pacific Management Review, In Press. https://doi.org/10.1016/j.apmrv.2021.10.001
International Trade Centre. (2020). List of exporters for the selected product. Retrieved from https://www.trademap.org/Country_SelProduct_TS.aspx?nvpm=1%7c%7c%7c%7c%7c2501%7c%7c%7c4%7c1%7c1%7c2%7c2%7c1%7c2%7c2%7c1%7c1
Jagdambe, S., & Kannan, E. (2020). Effects of ASEAN-India free trade agreement on agricultural trade: The gravity model approach. World Development Perspectives, 19(September), 1–8. https://doi.org/10.1016/j.wdp.2020.100212
Joo, H. Y., & Min, H. (2022). Assessing the impacts of government environmental policies on the small and medium-sized firm’s performances in Korea and China. Benchmarking: An International Journal, Ahead-of-Print. https://doi.org/10.1108/BIJ-12-2021-0754
Journeault, M., Perron, A., & Vallières, L. (2021). The collaborative roles of stakeholders in supporting the adoption of sustainability in SMEs. Journal of Environmental Management, 287(June), 1–12. https://doi.org/10.1016/j.jenvman.2021.112349
Kementerian Perdagangan. (2020). Press conference 24 July 2020. Retrieved January 12th 2022 from https://www.kemendag.go.id/storage/article_uploads/WAJ00jXaQZSytGE1C1w79XLqXLwlQQmU9ek6q7Er.pdf
Kementerian Kelautan dan Perikanan. (2016). Laporan kinerja Kementerian Kelautan dan Perikanan tahun 2015. Retrieved from https://kkp.go.id/wp-content/uploads/2016/07/Lkj-KKP-2015.pdf
Kim, S., & Park, K. C. (2021). Government funded R&D collaboration and it’s impact on SME's business performance. Journal of Informetrics, 15(3). https://doi.org/10.1016/j.joi.2021.101197
Kirkpatrick, C., & Parker, D. (2004). Regulatory impact assessment and regulatory governance in developing countries. Public Administration and Development, 24(4), 333–344. https://doi.org/10.1002/pad.310
Koker, L. D. (2022). Editorial: Regulatory impact assessment: Towards a better approach for the FATF. Journal of Money Laundering Control, 25(2), 265–267. https://doi.org/10.1108/JMLC-05-2022-149
Komisi Pengawas Persaingan Usaha. (2021). Siaran pers KPPU No. 034/KPPU-PR/IV/2021. Retrieved February 3rd 2022 from https://kppu.go.id/wp-content/uploads/2021/04/Siaran-Pers-No.-34_KPPU-PR_IV_2021.pdf
Melnyk, S. A., Schoenherr, T., Verter, V., Evans, C., & Shanley, C. (2021). The pandemic and SME supply chains: Learning from early experiences of SME suppliers in the U.S. defense industry. Journal of Purchasing and Supply Management, 27(4), 1–12. https://doi.org/10.1016/j.pursup.2021.100714
Mubarik, M. S., Devadason, E. S., & Govindaraju, C. (2020). Human capital and export performance of small and medium enterprises in Pakistan. International Journal of Social Economics, 47(5), 643–662. https://doi.org/10.1108/IJSE-03-2019-0198
Mustapa, A. N., & Mohamad, A. (2021). Malaysian government business support and assistance for small and medium enterprises: A case of COVID-19 pandemic crisis. In B. S. Sergi and A. R. Jaaffar (Eds.), Modeling economic growth in contemporary Malaysia (pp. 291–305). Emerald Publishing Limited. https://doi.org/10.1108/978-1-80043-806-420211022
Nasikh, Kamaludin, M., Narmaditya, B. S., Wibowo, A., & Febrianto, I. (2021). Agricultural land resource allocation to develop food crop commodities: Lesson from Indonesia. Heliyon, 7(7), 1–12. https://doi.org/10.1016/j.heliyon.2021.e07520
Nassaji, H. (2015). Qualitative and descriptive research: Data type versus data analysis. Language Teaching Research, 19(2), 129–132. https://doi.org/10.1177/1362168815572747
Nie, F., Li, J., Bi, X., & Li, G. (2022). Agricultural trade liberalization and domestic fertilizer use: Evidence from China-ASEAN free trade agreement. Ecological Economics, 195(May). https://doi.org/10.1016/j.ecolecon.2022.107341
Njinyah, S. Z. (2018). The effectiveness of government policies for export promotion on the export performance of SMEs cocoa exporters in Cameroon. International Marketing Review, 35(1), 164–185. https://doi.org/10.1108/IMR-05-2016-0103
O’Brien, T. F., Bommaraju, T. V., & Hine, F. (2005). Handbook of chlor alkali technology. Springer.
OECD. (2022). Recommendation of the council on improving the quality of government regulation. Retrieved from https://legalinstruments.oecd.org/public/doc/128/128.en.pdf
Panjaitan, J. M. P, Timur, R. P., & Sumiyana. (2021). How does the government of Indonesia empower SMEs? An analysis of the social cognition found in newspapers. Journal of Entrepreneurship in Emerging Economies, 13(5), 765–790. https://doi.org/10.1108/JEEE-04-2020-0087
Pulka, B. M., Ramli, A., & Mohamad, A. (2021). Entrepreneurial competencies, entrepreneurial orientation, entrepreneurial network, government business support and SMEs performance. The moderating role of the external environment. Journal of Small Business and Enterprise Development, 28(4), 586–618. https://doi.org/10.1108/JSBED-12-2018-0390
Sarmah, A., Saikia, B., & Tripathi, D. (2021). Can unemployment be answered by Micro Small and Medium Enterprises? Evidences from Assam. Indian Growth and Development Review, 14(2), 199–222. https://doi.org/10.1108/IGDR-09-2020-0140
Sedivy, V. M. (2008). Economy of salt in chloralkali manufacture. In National Salt Conference (pp. 1–9).
Shah, K. U. (2018). Regulatory impact assessment for implementing energy efficient lighting standards in the small island developing state of Antigua & Barbuda. Energy Strategy Reviews, 22(November), 216–229. https://doi.org/10.1016/j.esr.2018.09.001
Steccolini, I. (2022). What counts as “good” qualitative accounting research? Researchers’ perspectives on assessing and proving research quality. Accounting, Auditing & Accountability Journal, Ahead-of-Print. https://doi.org/10.1108/AAAJ-05-2022-5808
Sunoko, R., Saefuddin, A., Nanere, M., & Ratten, V. (2022). Micro Small Medium Enterprises (MSMEs) and Indonesian national economies during and post COVID-19. In V. Ratten (Ed.), Entrepreneurial innovation strategy and competition aspects (pp. 141–150). Springer.
Ugwu-Oju, O. M., Onodugo, A. V., & Mbah, C. P. (2020). Appraisal of government funding schemes on the development of small and medium enterprises in Nigeria: A study of Enugu state. World Journal of Entrepreneurship, Management and Sustainable Development, 16(3), 165–179. https://doi.org/10.1108/WJEMSD-08-2019-0067
Whang, U. (2019). Exports and job creation in South Korea: Industry-level analysis. Journal of Korea Trade, 23(1), 2–18. https://doi.org/10.1108/JKT-05-2018-0042
World Health Organization. (2014). Guideline: Fortification of food-grade salt with iodine for the prevention and control of iodine deficiency disorders. Retrieved from https://apps.who.int/iris/bitstream/handle/10665/136908/9789241507929_eng.pdf?sequence=1&isAllowed=y
Xiang, D., & Worthington, A. C. (2017). The impact of government financial assistance on the performance and financing of Australian SMEs. Accounting Research Journal, 30(4), 447–464. https://doi.org/10.1108/ARJ-04-2014-0034
Xiang, D., Zhao, T., & Zhang, N. (2022). How can government environmental policy affect the performance of SMEs: Chinese evidence. Journal of Cleaner Production, 336(February). https://doi.org/10.1016/j.jclepro.2021.130308
Yanase, A., & Tsubuku, M. (2022). Trade costs and free trade agreements: Implications for tariff complementarity and welfare. International Review of Economics & Finance, 78(March), 23–37. https://doi.org/10.1016/j.iref.2021.10.012
Yazdanfar, D., & Öhman, P. (2019). Growth and job creation at the firm level: Swedish SME data. Management Research Review, 41(3), 345–358. https://doi.org/10.1108/MRR-03-2017-0093
Yogi, A. P., Samudro, B. R., Soesilo, A. M., & Pratama, Y. P. (2022). Land Use and Cover Change (LUCC) and migration in Sukoharjo, Indonesia. International Journal of Ethics and Systems, 38(3), 465–483. https://doi.org/10.1108/IJOES-01-2021-0005
Yu, J., Peng, F., Shi, X., & Yang, L. (2022). Impact of credit guarantee on firm performance: Evidence from China’s SMEs. Economic Analysis and Policy, 75(September), 624–636. https://doi.org/10.1016/j.eap.2022.06.017
Zamani, S. H., Rahman, R. A., Fauzi, M. A., & Mohamed Yusof, L. (2022). Government pandemic response strategies for AEC enterprises: Lessons from COVID-19. Journal of Engineering, Design and Technology, Ahead-of-Print. https://doi.org/10.1108/JEDT-10-2021-0540
Zheng, Y., Li, C., & Liu, Y. (2021). Impact of environmental regulations on the innovation of SMEs: Evidence from China. Environmental Technology & Innovation, 22(May), 1–15. https://doi.org/10.1016/j.eti.2021.101515
Zide, O., & Jokonya, O. (2022). Factors affecting the adoption of Data Management as a Service (DMaaS) in Small and Medium Enterprises (SMEs). Procedia Computer Science, 196, 340–347. https://doi.org/10.1016/j.procs.2021.12.022
Downloads
Published
Issue
Section
License
Copyright (c) 2022 Rahmadi Sunoko, Asep Saefuddin, Rizal Syarief, Nimmi Zulbainarni
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Authors who publish with this journal agree to the following terms:
a. Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License - Share Alike that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
b. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this journal.
c. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work.
USER RIGHTS
All articles published Open Access will be immediately and permanently free for everyone to read and download. We are continuously working with our author communities to select the best choice of license options, currently being defined for this journal as follows: Creative Commons Attribution-Share Alike (CC BY-SA)
