Products of Cooperation

Indian Ocean summit highlights SMEs, women’s empowerment and tourism

By Karmila Bain
Sunday, April 9, 2017

Deepening business cooperation in the region was the aim of the Indian Ocean Rim Association (IORA) Business Summit, held in Jakarta on March 6.

The event was part of the first ever IORA Leaders’ Summit, with the theme Strengthening Maritime Cooperation for a Peaceful, Stable, and Prosperous Indian Ocean, hosted by Indonesia as the current chair of the organization at the Jakarta Convention Center on March 5-7.

The business summit was attended by representatives of IORA’s 21 member states: Australia, Bangladesh, Comoros, India, Indonesia, Iran, Kenya, Madagascar, Malaysia, Mauritius, Mozambique, Oman, the Seychelles, Singapore, Somalia, South Africa, Sri Lanka, Tanzania, Thailand, the United Arab Emirates, and Yemen.

Indonesian President Joko Widodo was a keynote speaker and took the opportunity to share his experiences as a 30-year furniture manufacturer. He emphasized that increasing the business of small and medium sized enterprises (SMEs) means more opportunity for higher profit and employment by boosting infrastructure, expanding connectivity between buyers and sellers and providing financial access. 

President Jacob Zuma of South Africa, giving the featured speech, stated that he strongly believed that small business is big business, and is the key to economic growth and job creation.

The summit also looked into issues such as women’s empowerment in business and enhancing tourism and connectivity through improvements in infrastructure.

SMEs: boosting trade and investment

Rosan Roeslani, the chairman of the Indonesian Chamber of Commerce and Industry (KADIN), emphasized the huge SME contribution to economies in the Indian Ocean region, and said the Indonesian government will grasp the opportunity to establish trade cooperation for the SME sector with IORA member states.

Nadiem Makarim, CEO of Go-Jek Indonesia, told the Go-Jek story as part of a panel discussion to explain how technology can boost SMEs.

“The entire market is now focusing on SMEs through mobile digital technology connecting buyers and sellers with more effective time and cost,” he said. “In the case of Go-Food [Go-Jek’s food delivery system] for example, the biggest sales and the vast majority of contributions come from kiosks or stalls on the streets, that are actually not a megabrand, and gain more profit than they can imagine.”

“The online community allows SMEs to self-organize because they can develop an online reputation,” said Thomas Lembong, chairman of the Indonesia Investment Coordinating Board (BKPM).

He added that to support SMEs through digital technology, digital economies need to increase collaboration with government on infrastructure.

Nadiem also said “each connection between regulations and the private sector could be one team. The government needs to work together with them.”

“Government should stay away from business unless it is to make broad regulations and an enabling environment,” said Lawrence Mavundla, President of South Africa’s National African Federated Chamber of Commerce and Industry.

Speaking at the session, KV Bhagirath, IORA Secretary General, said: “It would be good to put together capacity building projects to counter huge gaps in economic development between countries.”

Shailesh Pathak, CEO of CityInfra Capital, India, had a more high tech way to help SMEs. “Integrating SMEs into smart cities is important. SMEs should connect on mobile apps across 21 IORA countries.”

Empowering women in business

Another topic on the agenda was the importance of women’s empowerment on the economy and on families. A major issue is how women are treated in the workplace – experiencing harassment, limited career opportunities and problems with work life balance.

The Indonesian government says that it realizes the important of women’s empowerment by supporting SMEs run by women, for example. As President Widodo said in his opening remarks: “Behind every great man, there is a great woman.”

Economic growth worldwide has been significantly influenced by digital innovation. In Indonesia, women can work from home by using their cellphones and building online stores. This is seen as a key tool globally, and especially in Indonesia and the IORA region.

The CEO of Austrade, Stephanie Fahey, noted that mobile phones help women in Australia to transfer money without having a bank account. Digital innovation creates opportunities for women to improve their welfare.

The CEO of CIMB Group Tengku Dato’ Sri Zafrul Aziz said that less than 50 percent of women in the Southeast Asia region have bank accounts and only a few have access to bank loans.

The President of the Black Business Council of South Africa, Danisa Baloyi, urged women to educate themselves and agreed that mobile development could change the fate of many citizens in Africa.

“If you look at Africa, telephone sophistication has changed the lives of many people, which allows people to communicate and transact in many rural areas,” she said.

Enhancing tourism and connectivity

Another key subject was improving the tourism industry. Indonesia plans to increase direct flights with IORA countries, collaborate on yachting tourism and the cruise ship Industry, and focus on Mandalika in Lombok as an “IORA Blue Economy Implementation Project.” The Blue Economy is the integration of ocean economy development with the principles of social inclusion, environmental sustainability and innovative, dynamic business models.

Indonesia is also prioritizing tourism destinations known as the “10 New Balis” – Lake Toba in North Sumatra, Tanjung Lesung in Banten, Tanjung Kelayang in Bangka Belitung, Thousand Islands in Jakarta Special Region, Borobudur in Central Java, Bromo Tengger Semeru in East Java, Mandalika in West Nusa Tenggara, Labuan Bajo in East Nusa Tenggara, Wakatobi in Southeast Sulawesi and Morotai in Maluku.

Tourism Minister’s Arief Yahya said in a written statement: “To develop the tourism sector and connection, Indonesia needs sustainable and prevalent infrastructure development including the 10 priority tourism destinations.”

Indonesia is targeting 20 million foreign tourists a year by 2019, and has opened the opportunity for anyone to invest in Indonesian tourism, with the total investment needed at Rp200 trillion. One of several regulations to support the 2019 target concerns visa-free stays for short visitors from 169 countries (Presidential Regulation no 21/2016).

Indonesia and other IORA member states also agreed tourism infrastructure can benefit from novel approaches. 

“The first experience of a tourist is the airport and the last impression is also the airport,” said P Sripathy, CEO of GMR International Airport. “So, we’re creating the first tourism airport in Goa.”

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