Jakarta (VNA) – Indonesia's economic stagnation at 5 percent over the last severalyears is caused not only by external factors but also domestic ones, accordingto the National Industrial Economic Committee (KEIN).

Antara newsagency quoted KEIN deputy chairman Arif Budimanta as saying that structuralproblem is the cause, particularly because the structure of economic players isimbalance.

The economicstagnation is also caused by expanding the current account deficit, paymentbalance deficit, income gap, and limited job opportunities, Budimanta said.

He emphasisedthe need to optimise micro-, small-, and medium-sized enterprises (MSMEs) toboost the economy.

According to a studyconducted by the Megawati Institute, MSMEs contribute 99.99 percent ofentrepreneurs, 97 percent of employment, and 60 percent of GDP, as againstmajor companies that contribute only 0.01 of business players, three percent ofemployment, and 40 percent of GDP distribution.

However, MSMEsonly receive 20 percent of banking finance distribution, compared to 80 percentfor major companies, the survey shows.

Indonesian MSMEsare also not maximal in the production value chain at the national as well asglobal levels, compared to those in neighbouring Malaysia and Thailand.

Only 6.3 percentof Indonesian MSMEs are capable of being involved in trade chain in SoutheastAsia, and its contribution to the national export is only 15.8 percent,compared to 29.5 percent in Malaysia and Thailand.

This shows thatso far MSMEs are considered only as an externality and not as a strategic playerin the national economy.

Based on asimulation carried by the Megawati Institute, if 10 percent of the country'sMSMEs are upgraded, such as micro business being upgraded to small and mediumones, it could boost Indonesia’s national economic growth by 7 percent, even upto 9.3 percent.

Economic expertsof Indonesia are of the view that the government should make this sector becomea backbone of the national economy by making appropriate breakthroughs.-VNA